UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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(incorporated and registered in England and Wales with registered no. 09422989)
Registered Office:
Nielsen House
John Smith Drive
Oxford
Oxfordshire
OX4 2WB
United Kingdom
April 9, 2018
Dear Fellow Shareholder:Shareholders:
On behalf of the Board of Directors (the “Board”), I cordially invite you to attend the Annual General Meeting of Shareholders (the “Annual Meeting”) of Nielsen N.V., a Dutch company (“Nielsen-Netherlands”Holdings plc (the “Company” or “Nielsen”), to be held on June 26, 2015, at 9:00 a.m. (Eastern Time), at the offices of Clifford Chance, LLP at Droogbak 1A in Amsterdam, the Netherlands, or by visiting www.virtualshareholdermeeting.com/NLSN, for the purpose of approving, among other things, the cross-border merger between Nielsen-Netherlands and Nielsen Holdings Limited, a newly formed, wholly-owned subsidiary of Nielsen-Netherlands, organized under English law, which will be re-registered as a public limited company with the name Nielsen Holdings plc (“Nielsen-UK”) prior to the merger, with Nielsen-Netherlands being the disappearing entity and Nielsen-UK being the surviving entity on Tuesday, May 22, 2018 (the “Merger”“Annual Meeting”), pursuant to the common draft terms of the cross-border legal merger (the “Merger Proposal”), a copy of which is attached to this proxy statement/prospectus as Annex A.
If approved by. This year, our shareholders the Merger would result in Nielsen-UK becoming the publicly-traded parent of the Nielsen group of companies and also result in you holding Ordinary Shares in Nielsen-UK (“Ordinary Shares”) rather than shares in Nielsen-Netherlands.
Immediately after the Merger, the number of Ordinary Shares you will own in Nielsen-UK will be the same as the number of shares you held in Nielsen-Netherlands immediately prior to the Merger and your relative economic interest in the Nielsen group will remain unchanged. After the Merger, Nielsen-UK will continue to conduct the same businesses through the Nielsen group of companies as Nielsen-Netherlands conducted prior to the Merger.
We expect the Ordinary Shares to be listed and traded in U.S. dollars on the New York Stock Exchange (“NYSE”) under the symbol “NLSN,” the same symbol under which your shares in Nielsen-Netherlands are currently listed and traded. Currently, there is no established public trading market for the shares of Nielsen-UK.
Upon completion of the Merger, we will remain subject to U.S. Securities and Exchange Commission reporting requirements, the mandates of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act and the applicable corporate governance rules of the NYSE, and we will continue to report our consolidated financial results in U.S. dollars and under U.S. generally accepted accounting principles. After the Merger, we must also comply with any additional applicable rules and reporting requirements under English law.
Under Dutch tax law, certain holders of shares in Nielsen-Netherlands that are subject to tax in the Netherlands and realize a capital gain in connection with the Merger will generally recognize a taxable gain or loss on the exchange of such shares for Ordinary Shares in the Merger. However, such shareholders may possibly apply roll-over relief as a result of which such gain will not be recognized for Dutch tax purposes. Please see “Material Tax Considerations Relating to the Merger – Dutch Tax Considerations” for further information. Under U.S. federal income tax law, holders of shares of Nielsen-Netherlands generally will not recognize gain or loss on the exchange of such shares for shares of Nielsen-UK in the Merger.WE URGE YOU TO CONSULT YOUR OWN TAX ADVISOR REGARDING YOUR PARTICULAR TAX CONSEQUENCES.
The Merger cannot be completed without satisfying certain conditions, the most important of which is the approval of the Merger by the affirmative vote of a majority of the shares of Nielsen-Netherlands represented in person or by proxy at the Annual Meeting.
We currently anticipate that the Merger will be completed during the third quarter of 2015, although we may abandon the Merger at any time prior toeither attend the Annual Meeting and,online or in some circumstances, after obtaining shareholder approval.person.
We intendcontinue to continueembrace the latest technology to provide expanded shareholder access and improved communication for our policy of making regular quarterly dividends on our outstanding common stock.shareholders by facilitating attendance online. We believe that facilitating attendance online will enable shareholders who might not otherwise desire or be able to travel to a physical meeting to attend online and participate from any location around the world. All shareholders who attend the meeting either online or in person will be able to ask questions and vote during the meeting.
This proxy statement/prospectus provides you with detailedTo attend online, please visit:nielsen.onlineshareholdermeeting.com and, to attend in person, please come to 50 Danbury Road, Wilton, CT 06897. For additional information regarding the Merger and other proposals to be submitted to shareholder approval atabout attending the Annual Meeting please see the “General Information and Frequently Asked Questions About the Annual Meeting” section onpages 81 to be held on June 26, 2015. We encourage you to read this entire proxy statement/prospectus carefully.IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS WE DESCRIBE STARTING ON PAGE 23.
Our Board85 of Directors has unanimously approved the Merger Proposal and recommends that you vote “FOR” the Merger. Our Board of Directors also recommends that you vote “FOR” each director nominee listed in this proxy statement/prospectus and “FOR” each other proposal described in this proxy statement/prospectus.statement.
Our Board of Directors has fixed the close of business on May 29, 2015March 23, 2018 as the record date for the determination of shareholders entitled to notice of and to vote at theour Annual Meeting and any adjournments or postponements thereof.
Whether or not you plan to attend the Annual Meeting, it is important that your shares be represented and voted at the meeting. You may vote your shares by proxy on the Internet, by telephone or by completing, signing and promptly returning the enclosed proxy card (if you received one) prior to the meeting or by attending the Annual Meeting online. You may also submit yourand voting online or in person.
We are pleased to once again utilize the U.S. Securities and Exchange Commission (“SEC”) rule allowing companies to furnish proxy cardmaterials to their shareholders over the Internet rather than in personpaper form. We believe that thise-proxy process will expedite our shareholders’ receipt of proxy materials, lower the costs and reduce the environmental impact of our Annual Meeting. Accordingly, unless you have previously requested to receive proxy materials in Amsterdam,paper form, you will receive a Notice of Internet Availability of Proxy Materials (the “Notice”). If you received a Notice by mail and did not receive, but would like to receive, a printed copy of our proxy materials, you should follow the Netherlandsinstructions for requesting such materials included onpage 79 of this proxy statement or in the dayNotice.
In accordance with the UK Companies Act 2006, the formal notice of the Annual Meeting.Meeting is set out on the pages following the “Summary of Proxy Statement Information.”
Attached to this letter are the Notice of Annual Meeting, the Proxy Statement/Prospectus and the proxy card. We are also enclosing our Annual Report for the year ended December 31, 2014. TheseOur proxy materials are first being maileddistributed or made available to shareholders on or about June 4, 2015.April 9, 2018.
Thank you for your continued support.
Sincerely,
Mitch Barns
Chief Executive Officer
2018 PROXY STATEMENT LTR |
NoneLETTER FROM OUR BOARD CHAIRPERSON
TO OUR SHAREHOLDERS
Dear Shareholders,
On behalf of the U.S. SecuritiesNielsen Board, thank you for your confidence in Nielsen and Exchange Commission, any U.S. state securities commission or the UK’s Financial Conduct Authority (the “FCA”) has approved or disapprovedfor placing your trust in us to oversee your investment. As a Board, we continue to work together to serve as your voice and provide independent and active development of the securitiesCompany’s strategy and oversight of management’s execution of that strategy. In 2017, we focused on overseeing management’s efforts to innovate to drive growth and efficiency to help the Company achieve sustainable financial performance and deliver long-term value for our shareholders. We are committed to ensuring that the Company continues to uphold its values, appropriately manage risk and engage and develop the talent we need for the future. Here is a quick review of some actions and accomplishments in 2017:
Company Strategy/Path to 2020
Your Board oversees management’s implementation of Nielsen’s strategic plan by deeply engaging with senior leaders about Nielsen’s overall strategy, priorities, execution, and long-term growth opportunities. The Board is committed to the Company’s “Path to 2020”, a three-year roadmap to a faster-growing, higher-margin business. Management is driving growth initiatives across the Company, and is making significant progress on its efforts to increase operational efficiency, with a 2020 goal of reducing the Company’s annual cost base by $500 million. We have full confidence in management’s ability to execute its strategy and believe that the investments in innovation to drive growth and efficiency best position the Company to achieve our common goal: creating sustainable value in our Company and for our shareholders over the long-term. We will continue to be issuedactively involved in overseeing the Company’s long-term path to value creation.
Board Risk Oversight
As a Board, we strive to foster a risk-aware culture while encouraging appropriate and balanced risk-taking to drive towards the Company’s long-term objectives. Fulfilling the Company’s strategic plans is only achievable by developing and maintaining an appropriate risk framework, facilitating the transparent identification and reporting of key business issues, and rigorous review and testing. Through our oversight, we set standards for managing risks and monitoring how the Company manages those risks. Our full Board oversees the Company’s most significant risks, including information security, privacy, and disaster recovery and business continuity, while its three standing committees are dedicated to oversight of specific risks.
Global Responsibility & Sustainability
The Company’s Global Responsibility & Sustainability initiatives remain an integral component of our strategy as we strive to manage Nielsen’s business and operations sustainably over the long term, and to give back to the communities and markets where we live and operate. These initiatives encompass the full scope of our environmental, social, and governance (ESG) strategy, and seek to identify potential ESG and business opportunities, risks, and emerging issues that could affect Nielsen’s business success and wide range of stakeholder relationships. The Board is committed to supporting this important work, leveraging our global ESG strategy while focusing on sustainable growth and continuous improvement over the long-term.
Talent Development and Diversity
Nielsen’s people are our biggest competitive advantage, which is why we consider leadership and talent a priority. This “talent mindset” means embracing and encouraging collaboration and diversity. We work diligently to build on our success as an organization where top talent aspires to work, drawing from a variety of disciplines and a diverse set of backgrounds. The Board’s composition is indicative of our commitment to diversity and inclusion. Our directors reflect diverse perspectives, including a complementary mix of expertise across disciplines, tenure and backgrounds.
2018 PROXY STATEMENT LTR2 |
Engagement and Outreach
Remaining connected to and accountable to our shareholders is central to Nielsen’s success. Constructive dialogue and regular communication with you promotes transparency and accountability and informs our strategic initiatives and policy development. In 2017, I continued to speak with investors on behalf of the Board and, together with the management team, we engaged with investors representing nearly 65% of our shareholder base on a range of topics, including: our strategy and financial performance; corporate governance matters, including Board composition and succession planning; and our executive compensation program.
Cultivating a Strong Ethical Culture
Underpinning our core values of open, connected, useful and personal is our long-standing commitment to do business the right way, every day. Our clients’ trust in the merger or determined if this proxy statement/prospectus is truthful or complete. Any representation to the contrary is a criminal offense. For the avoidance of doubt, this proxy statement/prospectus is not intended to be and is not a prospectus for purposesintegrity of the E.U. Prospectus Directive and/ordata and services Nielsen provides is essential to our success as a business. In 2017, we increased our focus on compliance and integrity, which included refreshing our Code of Conduct to ensure our employees, officers and Board understand and meet expectations that we operate with the FCA’s Prospectus Rules.highest ethical and business standards. Your Board believes that building and maintaining a strong ethical culture at Nielsen requires the right tone at the top, and we take responsibility for ensuring that ethics and compliance always remain at the forefront in Nielsen’s strategy and actions.
The dateIn closing, I want to thank you again for your support and assure you that your Board of this proxy statement/prospectus is May 21, 2015,Directors and itmanagement team will be first mailedcontinue to shareholders on or about June 4, 2015.
Summary of Proxy Information/ProspectusJames A. Attwood, Jr.
Board Chairperson
| 2018 PROXY STATEMENT LTR2
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This summary highlights certain information contained elsewhere in this proxy statement/prospectus. This summary does not contain all of the information you should consider.statement. You should read the complete proxy statement/prospectusstatement and annexes before voting.
ANNUAL MEETING: JUNE 26, 2015 AT 9:00 A.M. E.T.2017 PERFORMANCE HIGHLIGHTS
We are dedicated to driving shareholder value by posting solid operating performance. The Company’s long-term business performance and progress against strategic initiatives form the context in which pay decisions are made. We have delivered resilient business performance with sustained growth over the last three years.
During 2017:
Further information about our 2017 performance can be found onpages 33-35.
COMPENSATION HIGHLIGHTS
2018 PROXY STATEMENT SUMM1 |
SUMMARY OF PROXY STATEMENT INFORMATION |
Further information about our compensation can be found onpages 31-70.
BOARD HIGHLIGHTS
Following the election and re-election of the Board nominees at our Annual Meeting, the Board will have the following characteristics:
BOARD EXPERTISE AND SKILLS
Our directors are keenly focused on building a board that supports Nielsen’s strategic goals and evolving business priorities. In that regard, in addition to the areas of experience set forth below, the qualities that are of paramount importance for our director nominees include: a proven record of success and business judgment, innovative and strategic thinking, a commitment to corporate responsibility, appreciation of multiple cultures and perspectives, and adequate time to devote to their responsibilities.
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ANNUAL REPORT AND PROXY MATERIALS
Available atwww.proxyvote.com (use the 16-digit control number included on your proxy card) and atwww.nielsen.com/investors.
PROPOSALS TO BE VOTED UPON
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THE MERGER
As a result of the Merger:
GOVERNANCE HIGHLIGHTS |
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Director Independence • 8 out of 9 of our director nominees are independent • All Board committees are fully independent |
SUMMARY OF PROXY INFORMATION/PROSPECTUS
Board Accountability
• Independent Chairperson | Board Refreshment • Ongoing Board succession planning • Average tenure of director nominees is 5.1 years • 5 new independent directors elected since 2013 | |||
Board Oversight • Ongoing focus on strategic matters, including through standalone strategy sessions • Robust oversight of risk management • Active engagement in talent management, leadership development and CEO succession planning • Regular executive sessions without management present | Director Engagement • All directors attended 100% of Board meetings and at least 90% of committee meetings in 2017 • Governance guidelines restrict the • In connection with the nomination process, directors’ other responsibilities/obligations considered | |||
Share Ownership • Five times their annual cash fees (with a transition period for new directors) • Directors may not hedge their common stock • No director has shares of common stock subject to a pledge • All equity currently granted as director compensation must be held for the director’s entire tenure on the Board | Director Access • Independent Chairperson actively involved in • Directors may contact any employee directly and receive access to any aspect of the • Board and its committees may engage independent advisors in their sole discretion • Shareholders may contact any of the |
2018 PROXY STATEMENT SUMM3 |
SUMMARY OF PROXY STATEMENT INFORMATION |
NOMINEES FOR BOARD OF DIRECTORS
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James A. Attwood, Jr. | Mitch Barns | Guerrino De Luca | ||||||||||||
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Holdings plc
Committees: None |
Committees: Compensation | |||||||||||||
Karen M. Hoguet | Harish Manwani | Robert C. Pozen | ||||||||||||
![]() | Age: 61 Director since: 2010 | ![]() | Age: 64 Director since: 2015 | ![]() | Age: 71 Director since: 2010 | |||||||||
Committees: Audit (Chairperson) |
Committees: Compensation (Chairperson) |
Committees: Compensation; Nomination and Corporate Governance (Chairperson) | ||||||||||||
David Rawlinson | Javier G. Teruel | Lauren Zalaznick | ||||||||||||
![]() | Age: 42 Director since: 2017 | ![]() | Age: 67 Director since: 2010 | ![]() | Age: 55 Director since: 2016 | |||||||||
Audit |
Committees: Audit |
Committees: Compensation; Nomination and Corporate Governance |
2018 PROXY STATEMENT SUMM4 |
NIELSEN HOLDINGS PLC
NOTICE OF THE 2018 ANNUAL MEETING
WHEN: May 22, 2018 at 9:00 a.m. (Eastern Time)
WHERE: Online via live webcast atnielsen.onlineshareholdermeeting.com or in person at 50 Danbury Road, Wilton, CT 06897.Check-in both online and in person will begin at 8:30 a.m. (Eastern Time), and you should allow ample time forcheck-in procedures. Whether you attend the meeting online or in person, you will be able to ask questions and vote during the meeting.
RECORD DATE: March 23, 2018
ITEMS OF BUSINESS:
At the Annual Meeting, you will be asked to consider and vote on the resolutions under Proposals 1 to 7 in the “Proposals to be Voted Upon” section below as well as such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. Explanations of the proposed resolutions together with the relevant information for each resolution are given onpages 1 to 72andAnnexes A,B andC of this proxy statement.
The Company’s UK annual report and accounts for the year ended December 31, 2017, which consist of the UK statutory accounts, the UK statutory directors’ report, the UK statutory directors’ compensation report, the UK statutory strategic report and the UK statutory auditor’s report (the “UK Annual Report and Accounts”), has been made available to shareholders together with the other proxy materials. There will be an opportunity at the Annual Meeting for shareholders to ask questions or make comments on the UK Annual Report and Accounts and the other proxy materials.
For additional information about our Annual Meeting, shareholders’ rights, proxy voting and access to proxy materials, see the “General Information and Frequently Asked Questions About the Annual Meeting” section onpages 81 to 85 of this proxy statement.
PROPOSALS TO BE VOTED UPON1
The Board considers that all the proposals to be put to the Annual Meeting are in the best interest of the Company and its shareholders as a whole.
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Proposal No. 1 | Election of | ![]() | for each nominee | ||||
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Proposal No. 3 | Reappointment of | ||||||
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Proposal No. 6 | Non-Binding, Advisory Vote on Directors’ Compensation Report | ||||||
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All resolutions above will be proposed as ordinary resolutions. |
2018 PROXY STATEMENT NOT1 |
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
Notes:
1. | In accordance with the Company’s articles of association, all resolutions will be taken on a poll. Voting on a poll means that each share represented in person or by proxy will be counted in the vote. All resolutions will be proposed as ordinary resolutions, which under applicable law means that each resolution must be passed by a simple majority of the total voting rights of shareholders who vote on such resolution, whether in person or by proxy. Explanatory notes regarding each of the proposals (and related resolutions) are set out in the relevant sections of the accompanying proxy materials relating to such proposals. |
2. | The results of the polls taken on the resolutions at the Annual Meeting and any other information required by the UK Companies Act 2006 will be made available on the Company’s website as soon as reasonably practicable following the Annual Meeting and for a period of two years thereafter. |
3. | To be entitled to attend and vote at the Annual Meeting and any adjournment or postponement thereof, shareholders must be registered in the register of members of the Company at the close of business in New York on March 23, 2018 (the “Record Date”). Changes to the Register of Members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the meeting. If you hold shares through a broker, bank or other nominee, you can attend the Annual Meeting and vote by following the instructions you receive from your bank, broker or other nominee. |
4. | Shareholders are entitled to appoint a proxy to exercise all or any of their rights to attend and to speak and vote on their behalf at the Annual Meeting. A shareholder may appoint more than one proxy in relation to the Annual Meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder. A corporate shareholder may appoint one or more corporate representatives to attend and to speak and vote on their behalf at the Annual Meeting. A proxy need not be a shareholder of the Company. |
5. | If you are a shareholder of record or hold shares through a broker, bank or other nominee and are voting by proxy through the Internet or by telephone, your vote must be received by 11:59 p.m. (Eastern Time) on May 21, 2018 to be counted. If you are a shareholder of record or hold shares through a broker, bank or other nominee and are voting by mail, your vote must be received by 9:00 a.m. (Eastern Time) on May 18, 2018 to be counted. A shareholder who has returned a proxy instruction is not prevented from attending the Annual Meeting either online or in person and voting if he/she wishes to do so, but please note that only your vote last cast will count. If you hold shares through Nielsen’s 401(k) plan, the plan trustee, Fidelity Management Trust Company, will vote according to the instructions received from you provided that your instructions are received by 11:59 p.m. (Eastern Time) on May 17, 2018. Your instructions cannot be changed or revoked after that time, and the shares you hold through the 401(k) plan cannot be voted online at the Annual Meeting. |
6. | Unless you hold shares through Nielsen’s 401(k) plan, you may revoke a previously delivered proxy at any time prior to the Annual Meeting. You may vote online if you attend the Annual Meeting online, or in person if you attend the physical meeting, thereby cancelling any previous proxy. |
7. | Shareholders meeting the threshold requirements set out in the UK Companies Act 2006 have the right to require the Company to publish on the Company’s website a statement setting out any matter relating to: (i) the audit of the Company’s accounts (including the auditor’s report and the conduct of the audit) that are to be presented before the Annual Meeting; or (ii) any circumstance connected with the auditor of the Company ceasing to hold office since the previous annual general meeting at which annual accounts and reports were presented in accordance with the UK Companies Act 2006. The Company may not require the shareholders requesting any such website publication to pay its expenses in complying with the UK Companies Act 2006. When the Company is required to place a statement on a website under the UK Companies Act 2006, it must forward the statement to the Company’s auditor not later than the time when it makes the statement available on its website. The business which may be dealt with at the Annual Meeting includes any statement that the Company has been required under the UK Companies Act 2006 to publish on a website. |
8. | Pursuant to SEC rules, the Company’s proxy statement (including this Notice of Annual General Meeting of Shareholders), the Company’s US annual report for the year ended December 31, 2017 (including the Annual Report on Form10-K for the year ended December 31, 2017), the Company’s UK Annual Report and Accounts and related information prepared in connection with the Annual Meeting are available at:www.proxyvote.com andwww.nielsen.com/investors. You will need the16-digit control number included on your Notice or proxy card in order to access the proxy materials onwww.proxyvote.com. These proxy materials will be available free of charge. |
9. | You may not use any electronic address provided in this Notice of Annual General Meeting of Shareholders or any related documentation to communicate with the Company for any purposes other than as expressly stated. |
2018 PROXY STATEMENT NOT2 |
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
PROXY VOTING METHODS
Shareholders holding shares of common stock of Nielsen-NetherlandsNielsen at the close of business in New York on May 29, 2015March 23, 2018 may vote their shares by proxy through the Internet, by telephone or by mail or by attending the Annual Meeting online. Shareholders may also submit their proxy cardsonline or in person in Amsterdam, the Netherlands on the day of the Annual Meeting.person. For shares held through a bank, broker or other nominee, shareholders may vote by submitting voting instructions to the bank, broker or other nominee. To reduce our administrative and postage costs, we ask that shareholders vote through the Internet or by telephone, both of which are available 24 hours a day, seven days a week. Shareholders may revoke their proxies at the times and in the manners described on page 11in the “Notes” section of this Proxy Statement/Prospectus.Notice of Annual General Meeting of Shareholders and the “General Information and Frequently Asked Questions About the Annual Meeting” section onpages 81-85 of this proxy statement.
If you are a shareholder of record or hold shares through a broker, bank or other nominee and are voting by proxy through the Internet by telephone or by mail,telephone, your vote must be received by 11:59 p.m. (Eastern Time) on June 25, 2015May 21, 2018 to be counted. If you are a shareholder of record or hold shares through a broker, bank or other nominee and are voting by mail, your vote must be received by 9:00 a.m. (Eastern Time) on May 18, 2018 to be counted.
If you hold shares through Nielsen’s 401(k) plan, trusteed bythe plan trustee, Fidelity Management Trust Company, will vote according to the instructions received from you provided that your vote must beinstructions are received by 11:59 p.m. Eastern Time(Eastern Time) on June 23, 2015. Those votesMay 17, 2018. Your instructions cannot be changed or revoked after that time, and thosethe shares you hold through the 401(k) plan cannot be voted in person or online at the Annual Meeting.
SUMMARY OF PROXY INFORMATION/PROSPECTUS
TO VOTE BY PROXY:
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• Go to the websitewww.proxyvote.com 24 hours a day, seven days a week (before the meeting) ornielsen.onlineshareholdermeeting
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• You will need the 16-digit |
• Mark your selections on
• Date and sign your name exactly as it appears on your proxy card.
• Mail the proxy card in the postage-paid envelope that |
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
Notice of Annual Meeting of Shareholders
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Whether or not you plan to attend the Annual Meeting, please vote electronically or by telephone or please sign and date the enclosed proxy card and return it promptly. If shares are held through a bank, broker or other nominee, you may vote by submitting voting instructions to your bank, broker or other nominee. You may revoke a previously delivered proxy at any time prior to the Annual Meeting. Shareholders may vote at the Annual Meeting, thereby canceling any previous proxy, provided that if your shares are held through a bank, broker or other nominee you will need to obtain a proxy, executed in your favor, from the shareholder of record (bank, broker or other nominee) to be able to submit your vote in person in Amsterdam, the Netherlands on the day of the Annual Meeting. Shares held through Nielsen’s 401(k) plan cannot be voted in person or online at the Annual Meeting.April 9, 2018
By Order of the Board of Directors,
Harris BlackEmily Epstein
CorporateCompany Secretary
This Notice of Annual Meeting, the Proxy Statement/ProspectusRegistered Office: AC Nielsen House, London Road, Oxford, Oxfordshire OX3 9RX, United Kingdom
Registered in England and the proxy card are being mailed
on or about June 4, 2015.Wales No. 09422989
2018 PROXY STATEMENT NOT3 |
This proxy statement/prospectus incorporates documents by reference which contain important business and financial information about us that is not included in this proxy statement/prospectus and which are described under “Incorporation by Reference.” These documents are available at no charge to any person, including any beneficial owner, upon request directed to us c/o Corporate Secretary, Nielsen N.V., 40 Danbury Road, Wilton, Connecticut 06897, telephone (203) 563-3500. In order to ensure timely delivery of these documents, any request should be made no later than five days prior to the date of the annual meeting. The exhibits to these documents will generally not be made available unless they are specifically incorporated by reference in this proxy statement/prospectus.
You should rely only on the information contained in or incorporated by reference in this proxy statement/prospectus. We have not authorized anyone else to provide you with different information. The information contained or incorporated by reference in this proxy statement/prospectus is accurate only as of the date thereof (unless the information specifically indicates that another date applies), or in the case of information incorporated by reference, only as of the date of such information, regardless of the time of delivery of this proxy statement/prospectus. Our business, financial condition, results of operations and prospects may have changed since such dates. Therefore, you should not rely upon any information that differs from or is in addition to the information contained in this proxy statement/prospectus or in the documents incorporated by reference.
Neither Nielsen-Netherlands nor Nielsen-UK is making an offer of securities in any country, state, province, or territory where the offer is not permitted. For the avoidance of doubt, this proxy statement/prospectus is not intended to be and is not a prospectus for purposes of the E.U. Prospectus Directive and/or the FCA’s Prospectus Rules.
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29 | Proposal No. 5Non-Binding, Advisory Vote on Executive Compensation |
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General Information about the Merger and the Annual Meeting
The following questions and answers are intended to address briefly some commonly asked questions regarding the proposed Merger and the Annual Meeting. These questions and answers may not address all questions that may be important to you. Please refer to the more detailed information contained elsewhere in this proxy statement/prospectus, its annexes and the documents referred to or incorporated by reference in this proxy statement/prospectus for more information. For instructions on obtaining the documents incorporated by reference, see “Incorporation by Reference.”
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GENERAL INFORMATION ABOUT THE MERGER AND THE ANNUAL MEETING
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GENERAL INFORMATION ABOUT THE MERGER AND THE ANNUAL MEETING
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GENERAL INFORMATION ABOUT THE MERGER AND THE ANNUAL MEETING
You are urged to consult your tax advisor for a full understanding of the tax consequences of the Merger to you.
GENERAL INFORMATION ABOUT THE MERGER AND THE ANNUAL MEETING
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GENERAL INFORMATION ABOUT THE MERGER AND THE ANNUAL MEETING
GENERAL INFORMATION ABOUT THE MERGER AND THE ANNUAL MEETING
GENERAL INFORMATION ABOUT THE MERGER AND THE ANNUAL MEETING
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GENERAL INFORMATION ABOUT THE MERGER AND THE ANNUAL MEETING
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GENERAL INFORMATION ABOUT THE MERGER AND THE ANNUAL MEETING
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Internet and telephone voting facilities will close at 11:59 p.m. (Eastern Time) on June 25, 2015 for the voting of shares held by shareholders of record or held in “street name” and 11:59 p.m. (Eastern Time) on June 23, 2015 for the voting of shares held through Nielsen’s 401(k) plan.
Mailed proxy cards with respect to shares held of record or in “street name” must be received no later than June 25, 2015. Mailed proxy cards with respect to shares held through Nielsen’s 401(k) plan must be received no later than June 23, 2015.
GENERAL INFORMATION ABOUT THE MERGER AND THE ANNUAL MEETING
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If you just sign and submit your proxy card without giving specific voting instructions, this will be construed as an instruction to vote the shares as recommended by management, so your shares will be voted “FOR” each director nominee listed herein (Proposal No. 5) and “FOR” Proposal Nos. 1, 2, 3, 4, 6, 7, 8 and 9, as recommended by the Board of Directors, and in accordance with the discretion of the holders of the proxy with respect to any other matters that may be voted on, in each case as indicated on the proxy card.
GENERAL INFORMATION ABOUT THE MERGER AND THE ANNUAL MEETING
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COMPANY INFORMATION AND MAILING ADDRESS
Nielsen N.V. is a Dutch public company with limited liability (naamloze vennootschap) incorporated under the laws of the Netherlands. Nielsen Holdings Limited is a private limited company, incorporated under English law (which will be re-registered as a public limited company to be named “Nielsen Holdings plc” prior to and in connection with the Merger).
Our common stock trades, and we expect it will continue to trade after the Merger, in U.S. dollars on the NYSE under the symbol “NLSN.” Our principal executive offices in the United States are located at 85 Broad Street, New York, NY 10004. Our telephone number is 1 (646) 654-5000. Our website address iswww.nielsen.com. Information on our website is not incorporated into this Proxy Statement/Prospectus.
The terms “Company,” “Nielsen,” “we,” “our” or “us,” as used herein, refer to Nielsen N.V., prior to the effective time of the Merger, and to Nielsen Holdings plc after the effective time of the Merger, or unless otherwise stated or indicated by context.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON JUNE 26, 2015:
This Proxy Statement/Prospectus and our Annual Report for the year ended December 31, 2014 are available atwww.proxyvote.com andwww.nielsen.com/investors. You will need the 16-digit control number included on your proxy card in order to access the proxy materials onwww.proxyvote.com.
GENERAL INFORMATION ABOUT THE MERGER AND THE ANNUAL MEETING
The Annual Meeting will be held at 9:00 a.m. (Eastern Time) on June 26, 2015. You may attend the meeting online by visitingwww.virtualshareholdermeeting.com/NLSN. You may also attend the meeting in person at the offices of Clifford Chance LLP at Droogbak 1A in Amsterdam, the Netherlands. Nielsen directors and members of management will attend the meeting via live webcast.
This summary highlights selected information from this proxy statement/prospectus. It does not contain all of the information that is important to you. To understand the Merger more fully, and for a more complete legal description of the Merger, you should read carefully the entire proxy statement/prospectus, including the Merger Proposal attached as Annex A to this proxy statement/prospectus and the Articles of Association of Nielsen-UK attached as Schedule 3 to Annex A to this proxy statement/prospectus, which will govern Nielsen-UK, the company whose shares you will own after the Merger. We encourage you to read those documents. Unless otherwise indicated, currency amounts in this proxy statement/prospectus are stated in U.S. dollars.
Nielsen-Netherlands.Through our direct and indirect subsidiaries, we are a leading global performance management company. We provide to clients a comprehensive understanding of what consumers watch and what they buy and how those choices intersect. We deliver critical media and marketing information, analytics and manufacturer and retailer expertise about what and where consumers buy and what consumers read, watch and listen to on a local and global basis. Our information, insights and solutions help our clients maintain and strengthen their market positions and identify opportunities for profitable growth. We have a presence in more than 100 countries and our services cover more than 90 percent of the globe’s GDP and population. We have significant investments in resources and associates all over the world, including in many emerging markets, and hold leading market positions in many of our services and geographies. Based on the strength of the Nielsen brand, our scale and the breadth and depth of our solutions, we believe we are the global leader in measuring and analyzing consumer behavior in the segments in which we operate.
Our Company was founded in 1923 by Arthur C. Nielsen, Sr., who invented an approach to measuring competitive sales results that made the concept of “market share” a practical management tool. For over 90 years, we have advanced the practice of market research and media audience measurement to provide our clients a better understanding of their consumers.
Nielsen-UK.Nielsen-UK is a company newly organized under the laws of England as a private limited company and is currently wholly-owned by Nielsen-Netherlands. Nielsen-UK has only nominal assets and has not engaged in any business or other activities other than in connection with its formation and the Merger. Prior to and in connection with the Merger, Nielsen-UK will be re-registered as a public limited company and, as a result of the Merger, will become the parent holding company of the Nielsen group.
You are being asked to approve the merger of Nielsen-Netherlands, our current Dutch holding company, into Nielsen-UK, a newly-formed company incorporated under English law. The Merger would result in Nielsen-UK serving as the publicly-traded parent of the Nielsen group of companies, effectively changing the place of incorporation of the publicly-traded parent of the Nielsen group from the Netherlands to England and Wales. The Merger will also result in (i) the issuance to you of Ordinary Shares in Nielsen-UK as merger consideration in exchange for your shares in Nielsen-Netherlands and (ii) the assets and liabilities of Nielsen-Netherlands being transferred by universal succession of title to Nielsen-UK. Upon the Merger becoming effective, the shares of Nielsen-Netherlands will be cancelled and cease to exist, and each holder of shares ofNielsen-Netherlands will cease to have any rights with respect to such shares in Nielsen-Netherlands.
MERGER PROCEDURE
The Merger Proposal and Reports on the Merger
The boards of directors of Nielsen-Netherlands and Nielsen-UK have unanimously approved the Merger Proposal, which sets out the terms and conditions of the cross-border merger between Nielsen-UK and Nielsen-Netherlands in accordance with
SUMMARY OF THE MERGER
the EU Directive 2005/56/EC of October 26, 2005 on cross-border mergers of limited liability companies, implemented for Dutch law purposes under the DCC and for English law purposes by the UK Regulations, with Nielsen-Netherlands being the disappearing entity and Nielsen-UK being the surviving entity. A copy of the Merger Proposal is attached to and is part of this proxy statement/prospectus as Annex A. The Merger Proposal (together with the relevant Annexes) will be filed for the UK Regulations purposes with the UK registrar of companies not less than two months before the date of a court-convened shareholders’ meeting and will be communicated to the public in the United Kingdom through a notice by the UK registrar of companies in the London Gazette at least one month before the date of such court-convened shareholders’ meeting. For Dutch law purposes, the Merger Proposal (together with the relevant annexes) is to be filed with the Dutch Trade Register and communicated to the public in the Netherlands through a notice in a nationally distributed newspaper and a notice in the Dutch State Gazette (Staatscourant).
Simultaneously with the approval of the Merger Proposal, the board of directors of Nielsen-UK unanimously approved its report prepared in accordance with the UK Regulations and the board of directors of Nielsen-Netherlands unanimously approved its explanatory report in accordance with the DCC. Furthermore, the independent experts appointed by the boards of directors of Nielsen-UK and Nielsen-Netherlands are in the process of preparing reports on the Merger as required under the UK Regulations and the DCC, both reports including a statement of the reasonableness of the exchange ratio to be applied in the Merger and in relation to the report prepared in accordance with the DCC, assessing the amount of shareholders equity of Nielsen-Netherlands being at least equal to the nominal paid-up amount of the aggregate number of shares in Nielsen-UK to be acquired by its shareholders under the Merger, increased by the aggregate amount of the compensation that withdrawing shareholders may claim pursuant to the DCC. A copy of the Merger Proposal, the report of the directors of Nielsen-UK, the explanatory report of the directors of Nielsen-Netherlands and the finalized reports of the independent experts will be available (i) at the offices of Nielsen-Netherlands at Diemerhof 2, 1112 XL Diemen, the Netherlands as from the moment the Merger Proposal is filed and (ii) at the registered office of Nielsen-UK at AC Nielsen House, London Road, Oxford, Oxfordshire, OX3 9RX, United Kingdom one month before the court-convened shareholders’ meeting of Nielsen-UK.
Implementation of the Merger
If the Merger is approved by the requisite vote of our shareholders and the other conditions to implement the Merger are satisfied, we will (1) request a Dutch civil law notary (notaris) to issue a certificate attesting that Nielsen-Netherlands has observed all procedural rules in respect of all the required resolutions and that all pre-merger formalities under Dutch law have been complied with, and (2) request the issuance of an order by the UK High Court certifying that Nielsen-UK has completed properly the pre-merger acts and formalities in accordance with the UK Regulations. Following this, a joint application will be submitted to the UK High Court by Nielsen-UK and Nielsen-Netherlands for the issuance of an order approving the completion of the Merger. The Merger will be effected not less than 21 days after the date of such order, which is currently expected to be in the third quarter of 2015.
MERGER CONSIDERATION
The exchange ratio to be applied in the Merger shall be 1:1. As a result thereof, upon the Merger taking effect, by virtue of such Merger and without any further action on the part of Nielsen-UK or any shareholder in Nielsen-Netherlands, a shareholder in Nielsen-Netherlands will receive one Ordinary Share for each share of common stock in the capital ofNielsen-Netherlands they hold.
DESCRIPTION AND CONSEQUENCES OF THE MERGER
Upon the Merger taking effect, (i) Nielsen-Netherlands as disappearing entity will merge into Nielsen-UK as acquiring entity, (ii) each shareholder in Nielsen-Netherlands, other than the withdrawing shareholders, will receive by operation of law one Ordinary Share for each share of common stock in Nielsen-Netherlands held by such shareholder immediately prior to the Merger taking effect, (iii) Nielsen-UK will have acquired all assets and liabilities of Nielsen-Netherlands by operation of law, and (iv) Nielsen-Netherlands will have ceased to exist.
SUMMARY OF THE MERGER
Any trades in the shares of common stock in Nielsen-Netherlands made in the three business days preceding the Merger will, as a result of the Merger taking effect and the shares of common stock in Nielsen-Netherlands ceasing to exist prior to the settlement of such trades, be settled after the Merger by the delivery of Ordinary Shares.
After the Merger, you will continue to own an interest in a parent company that will continue to conduct, through its subsidiaries, the same businesses as conducted by Nielsen-Netherlands before the Merger. The number of Ordinary Shares you will own in Nielsen-UK immediately after the Merger will be the same as the number of shares you owned inNielsen-Netherlands immediately prior to the Merger, and your relative economic interest in the Nielsen group will remain unchanged.
Many of the principal attributes of Nielsen-Netherlands’s shares and Nielsen-UK’s Ordinary Shares will be similar. However, if the Merger is consummated, your future rights as a holder of Ordinary Shares of Nielsen-UK will differ from your current rights as a holder of shares of Nielsen-Netherlands and Nielsen-UK’s proposed articles of association will differ fromNielsen-Netherlands’s articles of association mostly to the extent that English corporate law differs from Dutch corporate law. We have sought to preserve in the articles of association of Nielsen-UK similar material rights and powers of shareholders as those provided under the articles of association of Nielsen-Netherlands. As a result, other than as required by English law or Dutch law, we believe that the rights of shareholders under Nielsen-UK’s articles of association are comparable to those under Nielsen-Netherlands’s articles of association. See “Comparison of Rights of Shareholders.” A copy of Nielsen-UK’s proposed articles of association is attached as Schedule 3 to Annex A to this proxy statement/prospectus.
Upon completion of the Merger, we will remain subject to the SEC reporting requirements, the mandates of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act and the applicable corporate governance rules of the NYSE,and we will continue to report our consolidated financial results in U.S. dollars and under U.S. GAAP. Upon the completion of the Merger, we must also comply with any additional applicable rules and reporting requirements under English law.
At the effective time of the Merger and pursuant to the terms of the Merger Proposal, each outstanding option to acquire shares of Nielsen-Netherlands and each other equity-based award issued by Nielsen-Netherlands that is outstanding immediately prior to the effective time of the Merger will be converted, as applicable, into an option to acquire or an award covering the same number of Ordinary Shares of Nielsen-UK, which option or award will have the same terms and conditions as the option or award from which it was converted (including, in the case of options, the same exercise price)
In reaching its decision to approve the Merger Proposal and recommend the Merger for your approval, theNielsen-Netherlands board of directors identified several potential benefits of having our publicly-traded parent incorporated in England and Wales, including the following:
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Though we expect the Merger should provide us the benefits described above, the Merger will expose Nielsen-Netherlands and its shareholders to some risks. Our board of directors was cognizant of and considered a variety of risks or potential
SUMMARY OF THE MERGER
risks, including the possibility of uncertainty created by the Merger and the change in our legal domicile, the fact that we expect to incur costs to complete the Merger, the fact that English corporate law imposes different and additional obligations on us and other risks discussed in the discussion under “Risk Factors Relating to the Merger.” After completing its review of the expected benefits and the potential advantages of the Merger, our board of directors unanimously approved the Merger Proposal, and has recommended that shareholders vote for the Merger. Nevertheless, we cannot assure you that the anticipated benefits of the Merger will be realized.
If the Merger is approved by the Annual Meeting of Nielsen-Netherlands, the completion of the Merger will remain subject to the satisfaction or waiver to the extent permitted by applicable law of the following conditions:
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SUMMARY OF THE MERGER
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The Merger Proposal provides that we may decide to abandon the Merger at any time prior to the meeting. After the Merger is approved by shareholders, we must file with the UK High Court the joint application for the order approving the completion of the Merger in order to effect the Merger unless one of the conditions to closing fails to be satisfied. See “Risk Factors Relating to the Merger – We may choose to abandon the Merger.”
In addition, the expected timing for the completion of the Merger may be impacted by other conditions described in this proxy statement/prospectus.
If the Merger is approved by the requisite vote of our shareholders and the other conditions to implement the Merger are satisfied, we will (1) request a Dutch civil law notary (notaris) to issue a certificate attesting that Nielsen-Netherlands has observed all procedural rules in respect of all the required resolutions and that all pre-merger formalities under Dutch law have been complied with, and (2) request the issuance of an order by the UK High Court certifying that Nielsen-UK has completed properly the pre-merger acts and formalities in accordance with the UK Regulations. Following this, a joint application will be submitted to the UK High Court by Nielsen-UK and Nielsen-Netherlands for the issuance of an order approving the completion of the Merger. The Merger will be effected not less than 21 days after the date of such order, which is currently expected to be in the third quarter of 2015.
The expected timing for the completion of the Merger may be impacted by other conditions described in this proxy statement/prospectus.
CAPITAL REDUCTION (SEE PAGE 32)
Under English law, Nielsen-UK will only be able to declare and pay future dividends, make distributions or repurchase shares out of “distributable reserves” on its statutory balance sheet. Immediately after the Merger, as a newly formed public limited company, Nielsen-UK will not have any distributable reserves because the reserves previously held by Nielsen-Netherlands will not transfer to the statutory balance sheet of Nielsen-UK. In order to have sufficient distributable reserves to declare and pay future dividends following the Merger, Nielsen-UK will capitalize the merger reserve by issuing a non-voting bonus share. The non-voting bonus share will be issued with a share premium. Nielsen-UK will then undertake a court-approved procedure to cancel such share and the related share premium thereby creating distributable reserves which may be utilized by Nielsen-UK to pay dividends to shareholders following the capital reduction. We will seek to obtain the approval of the UK High Court to the capital reduction as soon as practicable following the Merger. Subject to the availability of the UK High Court, we expect to receive such approval up to ten business days after the completion of the Merger.
The capital reduction is not a requirement for Nielsen-UK to be able to satisfy any dividend obligations declared by Nielsen-Netherlands that remain unpaid at the effective time of the Merger.
We are not aware of any governmental approvals or actions that are required to complete the Merger other than compliance with U.S. federal and state securities laws, various provisions of Dutch law and English corporate law.
MATERIAL TAX CONSIDERATIONS RELATING TO THE MERGER (SEE PAGE 38)
U.S. Taxes.Under U.S. federal income tax law, holders of shares of Nielsen-Netherlands generally will not recognize gain or loss on the exchange of such shares for shares of Nielsen-UK in the Merger.
Dutch Taxes. As is discussed below under “Material Tax Considerations Relating to the Merger – Dutch Tax Considerations,” under Dutch tax law, holders of shares in Nielsen-Netherlands will not be subject to Dutch dividend withholding tax as a
SUMMARY OF THE MERGER
result of the Merger, unless a shareholder exercises its withdrawal right and receives compensation. On payments of cash compensation, dividend withholding tax at a rate of 15% will generally be withheld if and to the extent that such payments exceed the average capital recognized as paid-up on the relevant shares for Dutch dividend withholding tax purposes. Certain holders of shares in Nielsen-Netherlands that are subject to tax in the Netherlands and realize a capital gain in connection with the Merger will generally be subject to corporate income tax or income tax in the Netherlands, provided that shareholders receiving shares in Nielsen-UK in exchange for all their shares in Nielsen-Netherlands in the Merger may possibly apply roll-over relief (doorschuiving) as a result of which such gain will not be recognized for Dutch tax purposes.
The Merger constitutes a taxable transaction for Dutch corporate income tax purposes pursuant to which all assets and liabilities are deemed for Dutch tax purposes to be transferred at fair market value. However, by virtue of the application of the Dutch participation exemption (deelnemingsvrijstelling) that will apply to gains or losses realized on the deemed transfer of the shares in Valcon Acquisition B.V., it is not expected that the Merger will result in any substantial tax liability that would result in Nielsen-Netherlands paying corporate income tax.
We have received a ruling from the DTA confirming that (1) no corporate income tax will be imposed in respect of the deemed transfer of Valcon Acquisition B.V. by Nielsen-Netherlands as a result of the Merger by virtue of the application of the Dutch participation exemption (deelnemingsvrijstelling), and (2) the Merger will not result in the imposition of a dividend withholding tax for shareholders receiving shares in Nielsen-UK in exchange for all their shares in Nielsen-Netherlands in the Merger.
UK Taxes.Stamp duty and/or SDRT are imposed in the UK on certain transfers of securities (which include shares in companies incorporated in the UK) at a rate of 0.5% of the consideration paid for the transfer. Certain transfers of shares to depositaries or into clearance systems are charged a higher rate of 1.5%. Transfers of interests in shares within a depositary or clearance system, and from a depositary to a clearance system, are generally exempt from stamp duty and SDRT.
Transfers of Ordinary Shares held in book entry form through the facilities of DTC will not attract a charge to stamp duty or SDRT in the U.K provided no instrument of transfer is entered into (which should not be necessary) and that no election that applies to the Ordinary Shares is made or has been made by DTC under section 97A of the Finance Act 1986. It is our understanding that no such election has been made by DTC.
Any transfer of, or agreement to transfer, Ordinary Shares that occurs outside the DTC system, including repurchases by Nielsen-UK, will ordinarily attract stamp duty or SDRT at a rate of 0.5%. This duty must be paid (and the transfer document stamped by HMRC) before the transfer can be registered in the books of Nielsen-UK. Typically this stamp duty or SDRT would be paid by the purchaser of the Ordinary Shares.
A transfer of title in the shares from within the DTC system out of the DTC system will not attract stamp duty or SDRT if undertaken for no consideration. If those shares are redeposited into DTC, however, the redeposit will attract stamp duty or SDRT at a rate of 1.5%.
Shareholders should therefore note that the withdrawal of Ordinary Shares from the DTC system, or any transfers outside the DTC system, are likely to cause additional costs and delays in disposing of their Ordinary Shares than would be the case if they hold shares in book entry form through the DTC system.
Other Tax Considerations.For stockholders of Nielsen-Netherlands who are citizens or residents of, or otherwise subject to taxation in, a country other than the United States or the Netherlands, the tax treatment of the Merger will depend on the applicable tax laws in such country.
Please refer to “Material Tax Considerations Relating to the Merger” for a description of the material U.S. federal income tax and certain Dutch and UK tax consequences of the Merger to Nielsen-Netherlands and its shareholders. Determining the actual tax consequences of the Merger to you may be complex and will depend on your specific situation.
You are urged to consult your tax advisor for a full understanding of the tax consequences of the Merger to you.
RIGHTS OF SHAREHOLDERS (SEE PAGE 52)
Many of the principal attributes of Nielsen-Netherlands’s shares and Nielsen-UK’s Ordinary Shares will be similar. However, if the Merger is consummated, your future rights as a holder of Ordinary Shares of Nielsen-UK will differ from your current
SUMMARY OF THE MERGER
rights as a holder of shares of Nielsen-Netherlands. Nielsen-UK’s proposed articles of association will differ from Nielsen-Netherlands’s articles of association mostly to the extent that English corporate law differs from Dutch corporate law. Other than as required by English law or Dutch law, we believe that the rights of shareholders under Nielsen-UK’s articles of association are comparable to those under Nielsen-Netherlands’s articles of association. See “Comparison of Rights of Shareholders.” A copy of Nielsen-UK’s proposed articles of association is attached as Schedule 3 to Annex A to this proxy statement/prospectus.
EXCHANGE OF SHARES (SEE PAGE 35)
Your ownership of Ordinary Shares will be recorded in book entry form by your bank or broker or other nominee if you are currently a beneficial holder of shares of Nielsen-Netherlands in “street name,” with no need for any additional action on your part. If you hold share certificates or are a registered uncertificated holder, following the effective time of the Merger, Ordinary Shares will be delivered to Computershare Trust Company, N.A., the exchange agent for the Merger, for delivery to you, or in “street name” through DTC, upon return of the deed of transfer and surrender of the certificates representing shares of Nielsen-Netherlands, if applicable. See “Proposals Relating to the Merger – Exchange of Shares; Delivery of Shares to Former Record Holders” for further information, including procedures for surrendering share certificates.
STOCK EXCHANGE LISTING (SEE PAGE 36)
We expect that, immediately following the Merger, the Ordinary Shares of Nielsen-UK will be listed and traded in U.S. dollars on the NYSE under the symbol “NLSN,” the same symbol under which Nielsen-Netherlands shares are currently listed. We do not intend to seek an additional listing on the London Stock Exchange.
If the Annual Meeting approves the Merger, any shareholder of Nielsen-Netherlands that voted against such proposal has the right to elect not to become a shareholder of Nielsen-UK and file a request for compensation in accordance with the DCC within one month after the Annual Meeting. A withdrawing shareholder can only make use of the withdrawal right in respect of the shares in Nielsen-Netherlands that such shareholder (i) held at the record date of the Annual Meeting and for which such shareholder voted against the Merger and (ii) still holds at the time of submitting the withdrawal application and at the effective time of the Merger. Upon the Merger taking effect, the withdrawing shareholder will not receive Ordinary Shares. Instead, such withdrawing shareholder will receive cash compensation (net of any Dutch dividend withholding tax that is required to be withheld by law) for the common shares in Nielsen-Netherlands for which it duly exercised his withdrawal right and such shares of Nielsen-Netherlands shall cease to exist as a consequence of the Merger taking effect.
In anticipation of the Merger, the Board of Directors proposes to amend the articles of association of Nielsen-Netherlands and include a criterion referred to in the DCC under which the amount of compensation to withdrawing shareholders who elect to exercise their withdrawal right can be established objectively. The criterion is such that, if possible, the amount of compensation corresponds to the value of the shares in Nielsen-Netherlands at the time of the entry into force of the Merger, so that the shareholders of Nielsen-Netherlands are treated equally as much as possible, regardless of whether they voted in favor or against the Merger.
Depending on the number of shares in respect of which a request to be compensated is filed, the amount of compensation per share in Nielsen-Netherlands shall be determined on the basis of (i) the average closing price of a share in Nielsen-Netherlands provided on a daily basis by the New York Stock Exchange over a period of twenty trading days prior to the effective time of the Merger or (ii) the cash proceeds realized by Nielsen-Netherlands from an offering of such number of newly issued shares in Nielsen-Netherlands equal to the number of shares in respect of which a request to be compensated is filed. If the compensation is determined in the manner set out under (ii), the costs and expenses of such offering, consisting of the registration and underwriting fees and other fees, costs and expenses primarily related to such offering, shall be deducted from the proceeds and aggregate amount of compensation. On payments of cash compensation, dividend withholding tax at a rate of 15% will generally be withheld if and to the extent that such payments exceed the average capital
SUMMARY OF THE MERGER
recognized as paid-up on the relevant shares for Dutch dividend withholding tax purposes. See “Proposals Relating to the Merger – Withdrawal Rights.”
ACCOUNTING TREATMENT OF THE MERGER UNDER U.S. GAAP
The Merger will represent a transaction between entities under common ownership. Assets and liabilities transferred between entities under common ownership are accounted for at cost. Accordingly, the assets and liabilities of Nielsen-Netherlands will be reflected at their carrying amounts in the accounts of Nielsen-UK at the effective time of the Merger.
MARKET PRICE AND DIVIDEND INFORMATION
On February 25, 2015, the last trading day before the public announcement of the Merger, the closing price of the Nielsen-Netherlands shares on the NYSE was $46.48 per share. On May 20, 2015, the last practicable date before the date of this proxy statement/prospectus, the closing price of the Nielsen-Netherlands shares was $45.78 per share.
On January 31, 2013, the board of directors of Nielsen-Netherlands adopted a cash dividend policy to pay quarterly cash dividends on its outstanding common stock. Following the completion of the Merger, we intend to continue our policy of making regular quarterly dividends on our outstanding common stock. However, our ability to declare and pay future dividends will depend on our results of operations, financial condition, cash requirements, future business prospects, contractual restrictions, other factors deemed relevant by our board of directors and restrictions imposed by English law.
Notwithstanding the Merger, as long as you are a holder of Nielsen shares on the applicable record date, you will receive any dividends declared during 2015 regardless of which Nielsen entity declares or pays them.
As discussed above in “– Capital Reduction,” following completion of the Merger, Nielsen-UK will undertake a court-approved capital reduction to create distributable reserves to enable Nielsen-UK to declare and pay future dividends following the capital reduction.
SUMMARY OF THE MERGER
SELECTED HISTORICAL FINANCIAL DATA
The following tables set forth selected historical financial data for Nielsen-Netherlands. The selected financial data as of and for the periods indicated below have been derived from Nielsen-Netherlands’s audited consolidated financial statements and related notes contained in its Annual Report on Form 10-K for the year ended December 31, 2014, which is incorporated by reference into this proxy statement/prospectus. The selected historical financial data as of and for the periods indicated below have also been derived from portions of Nielsen-Netherlands’s Annual Report on Form 10-K for the year ended December 31, 2014. Historical results are not necessarily indicative of the results that may be expected for any future period.
This selected financial data should be read in conjunction with Nielsen-Netherlands’s audited consolidated financial statements, the notes related thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Nielsen-Netherlands’s Annual Report on Form 10-K for the year ended December 31, 2014. See “Incorporation by Reference.”
Year Ended December 31, | ||||||||||||||||||||
2014 (1) | 2013 (2) | 2012 (3) | 2011 (4) | 2010 (5) | ||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||||||
Statement of Operations Data | ||||||||||||||||||||
Revenues | $ | 6,288 | $ | 5,703 | $ | 5,407 | $ | 5,328 | $ | 4,935 | ||||||||||
Depreciation and amortization (6) | 573 | 510 | 493 | 502 | 530 | |||||||||||||||
Operating income | 1,089 | 861 | 880 | 726 | 673 | |||||||||||||||
Interest expense | 300 | 309 | 390 | 449 | 619 | |||||||||||||||
Income from continuing operations | 381 | 431 | 242 | 61 | 146 | |||||||||||||||
Income/(loss) from discontinued operations | — | 305 | 30 | 26 | (13 | ) | ||||||||||||||
Income from continuing operations per common share (basic) | 1.01 | 1.16 | 0.67 | 0.17 | 0.53 | |||||||||||||||
Income from continuing operations per common share (diluted) | 1.00 | 1.14 | 0.66 | 0.17 | 0.52 | |||||||||||||||
Cash dividends declared per common share | 0.95 | 0.72 | 0 | 0 | 0.03 | |||||||||||||||
Balance Sheet Data | ||||||||||||||||||||
Total assets | $ | 15,376 | $ | 15,530 | $ | 14,585 | $ | 14,504 | $ | 14,429 | ||||||||||
Long-term debt including capital leases | 6,862 | 6,640 | 6,579 | 6,762 | 8,550 |
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SUMMARY PRO FORMA FINANCIAL INFORMATION
Pro forma financial statements for Nielsen-UK are not presented in this proxy statement/prospectus because no significant pro forma adjustments are required to be made to the historical audited consolidated financial statements of Nielsen-Netherlands for the year ended December 31, 2014.
Risk Factors Relating to the Merger
Before you decide how to vote on the Merger, you should carefully consider the following risk factors, in addition to the other information contained in this proxy statement/prospectus and the documents incorporated by reference, including the information set forth in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2014.
The anticipated benefits of the Merger may not be realized.
We may not realize the benefits we anticipate from the Merger. Our failure to realize those benefits could have an adverse effect on our business, results of operations or financial condition.
Your rights as a shareholder will change as a result of the Merger.
The consummation of the Merger will change the governing law that applies to our shareholders from Dutch law (which applies to the shares of Nielsen-Netherlands) to English law (which applies to Nielsen-UK’s Ordinary Shares). Many of the principal attributes of Nielsen-Netherlands’s shares and Nielsen-UK’s Ordinary Shares will be similar. However, if the Merger is consummated, your future rights as a shareholder under English corporate law will differ from your current rights as a shareholder under Dutch corporate law. In addition, Nielsen-UK’s proposed articles of association will differ fromNielsen-Netherlands’s articles of association. See “Comparison of Rights of Shareholders.”
We will be subject to various UK taxes as a result of the Merger.
Nielsen-UK will be within the scope of UK corporation tax following the Merger. However, based on current UK tax law and practice, Nielsen-UK does not expect it will be subject to material levels of UK tax. In particular, Nielsen-UK expects that the application of the UK’s “controlled foreign company” rules (under which, in some circumstances, low-taxed profits of foreign companies that are regarded as being controlled by a UK company may be taxed in the UK) should not result in Nielsen-UK being subject to material levels of UK tax. Nielsen-UK also expects that it should be able to repatriate cash to Nielsen-UK from the rest of the Nielsen group in a UK tax efficient manner.
We will remain subject to changes in law and other factors after the Merger that may not allow us to maintain a worldwide effective corporate tax rate that is competitive in our industry.
While we believe that the Merger should not affect our ability to maintain a worldwide effective corporate tax rate that is competitive in our industry, we cannot give any assurance as to what our effective tax rate will be after the Merger. Also, the tax laws of the United States., the UK and other jurisdictions could change in the future, and such changes could cause a material change in our worldwide effective corporate tax rate. In particular, legislative action could be taken by the United States, the European Union or the UK which could override tax treaties upon which we expect to rely and adversely affect our effective tax rate. As a result, our actual effective tax rate may be materially different from our expectation.
We may choose to abandon the Merger.
We may decide to abandon the Merger at any time prior to the annual meeting. After the Merger is approved by shareholders, we will not effect the Merger if one of the conditions to closing fails to be satisfied and is not otherwise waived.
English law will require that we meet certain additional financial requirements before we declare dividends and repurchase shares following the Merger.
Under English law, Nielsen-UK will only be able to declare dividends, make distributions or repurchase shares out of distributable reserves on our statutory balance sheet. Distributable reserves are a company’s accumulated, realized profits, so far as not previously utilized by distribution or capitalization, less its accumulated, realized losses, so far as not previously written off in a reduction or reorganization of capital duly made. Immediately after the Merger, as a newly formed public
RISK FACTORS RELATING TO THE MERGER
limited company, Nielsen-UK will not have any distributable reserves because, under English law, the reserves previously held by Nielsen-Netherlands will not transfer to the statutory balance sheet of Nielsen-UK as a distributable reserve. The Merger will however result in a “merger reserve” on the statutory balance sheet of Nielsen-UK in an amount approximately equal to the amount by which the net book value of the assets and liabilities transferred to Nielsen-UK from Nielsen-Netherlands pursuant to the Merger exceeds the nominal value of the Ordinary Shares issued pursuant to the Merger. We intend to create distributable reserves at Nielsen-UK by capitalizing the merger reserve through issuing a non-voting bonus share. The non-voting bonus share will be issued with a share premium. Nielsen-UK will then undertake a court-approved procedure to cancel such share and the related share premium thereby creating distributable reserves which may be utilized by Nielsen-UK to pay dividends to shareholders following the capital reduction. Subject to the availability of the UK High Court, we expect to receive such approval up to ten business days after the completion of the Merger. If that approval is not received however, Nielsen-UK will not have sufficient distributable reserves to declare and pay quarterly dividends for the foreseeable future and Nielsen-UK would be required to undertake other efforts to allow it to declare dividends or repurchase shares following the Merger. These efforts may include certain intra-group reorganizations which are generally established alternatives for the creation of distributable reserves in an English public limited company, but which we believe to be less advantageous than a court-approved reduction in capital.
If Nielsen-UK’s Ordinary Shares are not eligible for deposit and clearing within the facilities of DTC, then transactions in our securities may be disrupted.
The facilities of DTC are a widely-used mechanism that allow for rapid electronic transfers of securities between the participants in the DTC system, which include many large banks and brokerage firms.
Upon the consummation of the Merger, the Ordinary Shares of Nielsen-UK will be eligible for deposit and clearing within the DTC system. We expect to enter into arrangements with DTC whereby we will agree to indemnify DTC for any stamp duty and/or SDRT that may be assessed upon it as a result of its service as a depository and clearing agency for our Ordinary Shares. We expect these actions, among others, will result in DTC agreeing to accept the Ordinary Shares for deposit and clearing within its facilities upon consummation of the Merger.
DTC is not obligated to accept the Ordinary Shares for deposit and clearing within its facilities at the closing and, even if DTC does initially accept the Ordinary Shares, it will generally have discretion to cease to act as a depository and clearing agency for the Ordinary Shares. If DTC determined prior to the consummation of the Merger that the Ordinary Shares are not eligible for clearance within the DTC system, then we would not expect to complete the transactions contemplated by this proxy statement/prospectus in their current form. However, if DTC determined at any time after the consummation of the Merger that the Ordinary Shares were not eligible for continued deposit and clearance within its facilities, then we believe the Ordinary Shares would not be eligible for continued listing on a U.S. securities exchange or inclusion in the Standard & Poor’s 500 Index and trading in the Ordinary Shares would be disrupted. While we would pursue alternative arrangements to preserve our listing and maintain trading, any such disruption could have a material adverse effect on the trading price of the Ordinary Shares.
Cautionary Information Regarding Forward-Looking Statements
This proxy statement/prospectus includes or incorporates by reference “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this proxy statement/prospectus or in the documents incorporated by reference, including those regarding any expected benefits, effects or results of the Merger, the timing of the Merger, the tax and accounting treatment of the Merger and expenses related to the Merger, our operations, costs and effective tax rates going forward, and our financial position, business strategy, plans and objectives of management for future operations and industry conditions, are forward-looking statements. When used in this proxy statement/prospectus or in the documents incorporated by reference, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “could,” “may,” “will,” “plan,” “forecast,” “project,” “should” and similar expressions are intended to be among the statements that identify forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot assure you that such expectations will prove to have been correct.
The following factors could affect our future results of operations and could cause those results to differ materially from those expressed in the forward-looking statements included in this proxy statement/prospectus or incorporated by reference:
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CAUTIONARY INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
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Such risks and uncertainties are beyond our ability to control, and in many cases, we cannot predict the risks and uncertainties that could cause our actual results to differ materially from those indicated by the forward-looking statements. You should consider these risks before deciding how to vote.
All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and we do not undertake any obligation to publicly update or revise any forward-looking statements except as required by law.
Proposals Relating to the Merger
The following includes a summary of the material provisions of the Merger Proposal, a copy of which is attached as Annex A and incorporated by reference into this proxy statement/prospectus. We encourage you to read the Merger Proposal and the Articles of Association of Nielsen-UK in their entirety. In the event of any discrepancy between the terms of the Merger Proposal and the following summary, the Merger Proposal will prevail.
Our board of directors has unanimously approved the Merger Proposal and recommends that you approve the Merger of Nielsen-Netherlands into Nielsen-UK. The Merger will result in Nielsen-UK becoming the publicly-traded parent of the Nielsen group and thereby effectively change the place of incorporation of our publicly-traded parent company from the Netherlands to England and Wales.
The Merger you are being asked to approve at the meeting would result in Nielsen-Netherlands merging with and into Nielsen-UK, with Nielsen-UK surviving the Merger and Nielsen-Netherlands being the disappearing entity. The Merger will also result in your shares of Nielsen-Netherlands being exchanged for Ordinary Shares of Nielsen-UK, and all of the assets and liabilities of Nielsen-Netherlands being transferred to Nielsen-UK.
After the Merger, you will continue to own an interest in a parent company that will continue to conduct, through its subsidiaries, the same businesses as conducted by Nielsen-Netherlands before the Merger. In addition, the Merger will not dilute your economic interest in the Nielsen group. The number of shares you will own immediately after the Merger will be the same as the number of shares you owned in Nielsen-Netherlands immediately prior to the Merger. Further, the number of outstanding Ordinary Shares of Nielsen-UK will be the same as the number of outstanding shares of Nielsen-Netherlands immediately before consummation of the Merger, except that:
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PROPOSALS RELATING TO THE MERGER
As of May 19, 2015, the last practicable date before the date of this proxy statement/prospectus, there were 368,056,222 shares of Nielsen-Netherlands outstanding. For a description of the Ordinary Shares of Nielsen-UK, see “Description of Nielsen-UK Ordinary Shares.”
If the Merger is approved by the requisite vote of our shareholders and the other conditions to closing are satisfied, we will (1) request a Dutch civil law notary (notaris) to issue a certificate attesting that Nielsen-Netherlands has observed all procedural rules in respect of all the required resolutions and that all pre-merger formalities under Dutch law have been complied with, and (2) request the issuance of an order by the UK High Court certifying that Nielsen-UK has completed properly the pre-merger acts and formalities in accordance with the UK Regulations. Following this, a joint application will be submitted to the UK High Court by Nielsen-UK and Nielsen-Netherlands for the issuance of an order approving the completion of the Merger. The Merger will be effected not less than 21 days after the date of such order, which is currently expected to be in the third quarter of 2015.
Nielsen-Netherlands. Nielsen-Netherlands, through its direct and indirect subsidiaries, is a leading global performance management company. We provide to clients a comprehensive understanding of what consumers watch and what they buy and how those choices intersect. We deliver critical media and marketing information, analytics and manufacturer and retailer expertise about what and where consumers buy and what consumers read, watch and listen to on a local and global basis. Our information, insights and solutions help our clients maintain and strengthen their market positions and identify opportunities for profitable growth. We have a presence in more than 100 countries and our services cover more than 90 percent of the globe’s GDP and population. We have significant investments in resources and associates all over the world, including in many emerging markets, and hold leading market positions in many of our services and geographies. Based on the strength of the Nielsen brand, our scale and the breadth and depth of our solutions, we believe we are the global leader in measuring and analyzing consumer behavior in the segments in which we operate.
Our Company was founded in 1923 by Arthur C. Nielsen, Sr., who invented an approach to measuring competitive sales results that made the concept of “market share” a practical management tool. For over 90 years, we have advanced the practice of market research and media audience measurement to provide our clients a better understanding of their consumers.
Nielsen-UK.Nielsen-UK is a company newly organized under the laws of England as a private limited company and is currently wholly-owned by Nielsen-Netherlands. Nielsen-UK has only nominal assets and has not engaged in any business or other activities other than in connection with its formation and the Merger. Prior to and in connection with the Merger, Nielsen-UK will be re-registered as a public limited company and, as a result of the Merger, will become the parent holding company of the Nielsen group.
Our principal executive offices in the United States are currently located at 85 Broad Street, New York, NY 10004. Our telephone number at that address is 1 (646) 654-5000.
BACKGROUND AND REASONS FOR THE MERGER
In reaching its decision to approve the Merger Proposal and recommend the Merger for your approval, the Nielsen-Netherlands board of directors identified several potential benefits of having our publicly-traded parent incorporated in England and Wales, including the following:
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PROPOSALS RELATING TO THE MERGER
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Though we expect the Merger should provide us the benefits described above, the Merger will expose Nielsen-Netherlands and its shareholders to some risks. Our board of directors was cognizant of and considered a variety of risks or potential risks, including the possibility of uncertainty created by the Merger and the change in our legal domicile, the fact that we expect to incur costs to complete the Merger, the fact that English corporate law imposes different and additional obligations on us and other risks discussed in the discussion under “Risk Factors Relating to the Merger.” After completing its review of the expected benefits and the potential advantages of the Merger, our board of directors unanimously approved the Merger Proposal, and has recommended that shareholders vote for the Merger. Nevertheless, we cannot assure you that the anticipated benefits of the Merger will be realized.
There are several principal steps to effect the Merger:
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As a result of the Merger:
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MERGER PROCEDURE
The Merger Proposal and Reports on the Merger
The boards of directors of Nielsen-Netherlands and Nielsen-UK have unanimously approved the Merger Proposal, which sets out the terms and conditions of the cross-border merger between Nielsen-UK and Nielsen-Netherlands in accordance with the EU Directive 2005/56/EC of October 26, 2005 on cross-border mergers of limited liability companies, implemented for Dutch law purposes under the DCC and for English law purposes by the UK Regulations, with Nielsen-Netherlands being the disappearing entity and Nielsen-UK being the surviving entity. A copy of the Merger Proposal is attached to and is part of this
PROPOSALS RELATING TO THE MERGER
proxy statement/prospectus as Annex A. The Merger Proposal (together with the relevant Annexes) will be filed for the UK Regulations purposes with the UK registrar of companies not less than two months before the date of a court-convened shareholders’ meeting and will be communicated to the public in the United Kingdom through a notice by the UK registrar of companies in the London Gazette at least one month before the date of such court-convened shareholders meeting. For Dutch law purposes, the Merger Proposal (together with the relevant annexes) is to be filed with the Dutch Trade Register and communicated to the public in the Netherlands through a notice in a nationally distributed newspaper and a notice in the Dutch State Gazette (Staatscourant).
Simultaneously with the approval of the Merger Proposal, the board of directors of Nielsen-UK unanimously approved its report prepared in accordance with the UK Regulations and the board of directors of Nielsen-Netherlands unanimously approved its explanatory report in accordance with the DCC. Furthermore, the independent experts appointed by the boards of directors of Nielsen-UK and Nielsen-Netherlands are in the process of preparing reports on the Merger as required under the UK Regulations and the DCC, both reports including a statement of the reasonableness of the exchange ratio to be applied in the Merger and in relation to the report prepared in accordance with the DCC, assessing the amount of shareholders equity of Nielsen-Netherlands being at least equal to the nominal paid-up amount of the aggregate number of shares in Nielsen-UK to be acquired by its shareholders under the Merger, increased by the aggregate amount of the compensation that withdrawing shareholders may claim pursuant to the DCC. A copy of the Merger Proposal, the report of the directors of Nielsen-UK, the explanatory report of the directors of Nielsen-Netherlands and the finalized reports of the independent experts will be available (i) at the offices of Nielsen-Netherlands at Diemerhof 2, 1112 XL Diemen, the Netherlands as from the moment the Merger Proposal is filed and (ii) at the registered office of Nielsen-UK at AC Nielsen House, London Road, Oxford, Oxfordshire, OX3 9RX, United Kingdom one month before the court-convened shareholders’ meeting of Nielsen-UK.
Implementation of the Merger
If the Merger is approved by the requisite vote of our shareholders and the other conditions to closing are satisfied, we will (1) request a Dutch civil law notary (notaris) to issue a certificate attesting that Nielsen-Netherlands has observed all procedural rules in respect of all the required resolutions and that all pre-merger formalities under Dutch law have been complied with, and (2) request the issuance of an order by the UK High Court certifying that Nielsen-UK has completed properly the pre-merger acts and formalities in accordance with the UK Regulations. Following this, a joint application will be submitted to the UK High Court by Nielsen-UK and Nielsen-Netherlands for the issuance of an order approving the completion of the Merger. The Merger will be effected not less than 21 days after the date of such order, which is currently expected to be in the third quarter of 2015.
MERGER CONSIDERATION
The exchange ratio to be applied in the Merger shall be 1:1. As a result thereof, upon the Merger taking effect, by virtue of such Merger and without any further action on the part of Nielsen-UK or any shareholder in Nielsen-Netherlands, a shareholder in Nielsen-Netherlands will receive one Ordinary Share for each share of common stock in the capital of Nielsen-Netherlands they hold.
DESCRIPTION AND CONSEQUENCES OF THE MERGER
Upon the Merger taking effect, (i) Nielsen-Netherlands as disappearing entity will merge into Nielsen-UK as acquiring entity, (ii) each shareholder in Nielsen-Netherlands, other than the withdrawing shareholders, will receive by operation of law one Ordinary Share for each share of common stock in Nielsen-Netherlands held by such shareholder immediately prior to the Merger taking effect, (iii) Nielsen-UK will have acquired all assets and liabilities of Nielsen-Netherlands by operation of law, and (iv) Nielsen-Netherlands will have ceased to exist.
Any trades in the shares of common stock in Nielsen-Netherlands made in the three business days preceding the Merger will, as a result of the Merger taking effect and the shares of common stock in Nielsen-Netherlands ceasing to exist prior to the settlement of such trades, be settled after the Merger by the delivery of Ordinary Shares.
PROPOSALS RELATING TO THE MERGER
Pursuant to the Merger Proposal, Nielsen-Netherlands and Nielsen-UK have agreed, among other things, that:
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If the Merger is approved by the Annual Meeting of Nielsen-Netherlands, the completion of the Merger will remain subject to the satisfaction or waiver to the extent permitted by applicable law of the following conditions:
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PROPOSALS RELATING TO THE MERGER
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If the Merger is approved by the requisite vote of our shareholders and the other conditions to closing are satisfied, we will (1) request a Dutch civil law notary (notaris) to issue a certificate attesting that Nielsen-Netherlands has observed all procedural rules in respect of all the required resolutions and that all pre-merger formalities under Dutch law have been complied with, and (2) request the issuance of an order by the UK High Court certifying that Nielsen-UK has completed properly the pre-merger acts and formalities in accordance with the UK Regulations. Following this, a joint application will be submitted to the UK High Court by Nielsen-UK and Nielsen-Netherlands for the issuance of an order approving the completion of the Merger. The Merger will be effected not less than 21 days after the date of such order, which is currently expected to be in the third quarter of 2015.
The expected timing for the completion of the Merger may be impacted by other conditions described in this proxy statement/prospectus.
We may decide to abandon the Merger at any time prior to the meeting. After the Merger is approved by shareholders, we must file with the UK High Court the joint application for the order approving the completion of the Merger in order to effect the Merger unless one of the conditions to closing fails to be satisfied. Please see “Summary – Merger Conditions.”
Under English law, Nielsen-UK will only be able to declare future dividends, make distributions or repurchase shares out of “distributable reserves” on its statutory balance sheet. Immediately after the Merger, as a newly formed public limited company, Nielsen-UK will not have any distributable reserves because, under English law, the reserves previously held by Nielsen-Netherlands will not transfer to the statutory balance sheet of Nielsen-UK as a distributable reserve. The Merger will however give rise to a merger reserve on the balance sheet of Nielsen-UK in an amount equal to the amount by which the net book value of the assets and liabilities transferred to Nielsen-UK from Nielsen-Netherlands pursuant to the Merger exceeds the nominal value of the Ordinary Shares issued pursuant to the Merger. In order to have sufficient distributable reserves to declare and pay future quarterly dividends, Nielsen-UK will capitalize the merger reserve by issuing a non-voting bonus share. The non-voting bonus share will be issued with a share premium. Nielsen-UK will then undertake a court-approved procedure to cancel such share and the related share premium thereby creating distributable reserves which may be utilized by Nielsen-UK to pay dividends to shareholders following the capital reduction.
The current shareholder of Nielsen-UK (which is Nielsen- Netherlands) will pass a resolution to approve the proposed reduction of capital of Nielsen-UK following the Merger. If the Merger is completed, we will seek to obtain the approval of the UK High Court to the capital reduction as soon as practicable following the Merger. Subject to the availability of the UK High Court, we expect to receive the approval of the UK High Court up to ten business days after the completion of the Merger.
The capital reduction is not a requirement for Nielsen-UK to be able to satisfy any dividend obligations declared by Nielsen-Netherlands that remain unpaid at the effective time of the Merger.
PROPOSALS RELATING TO THE MERGER
INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS IN THE MERGER
No change of control payments or additional compensation, including relocation costs and expenses, will be payable to our directors and executive officers in connection with the Merger.
We are not aware of any governmental approvals or actions that are required to complete the Merger other than compliance with U.S. federal and state securities laws, various provisions of Dutch law and English corporate law.
Immediately prior to the effective time of the Merger, the officers and directors of Nielsen-Netherlands will be appointed as the officers and directors of Nielsen-UK.
If the Merger is completed, the members of the Nielsen-UK board of directors will hold office until the end of the next annual meeting of shareholders whereby they will retire unless they are reappointed during the meeting.
Nielsen-UK will enter into indemnity agreements with the directors, all of which currently have indemnity agreements with Nielsen-Netherlands, upon terms substantially similar to the Nielsen-Netherlands agreements to the extent permitted by English law.
RECOMMENDATION AND REQUIRED AFFIRMATIVE VOTE
To be validly approved, the Merger requires a resolution of the general meeting of shareholders of Nielsen-Netherlands approving the proposed merger with a simple majority (>50%) of votes cast if at least 50% of the issued share capital is represented (either in person or by proxy) at the meeting. If less than 50% of the issued share capital is represented, a majority of 2/3 of votes cast is required. See “The Meeting of Shareholders – Record Date; Voting Rights; Vote Required for Approval.”
Our board of directors has unanimously approved the Merger Proposal and recommends that shareholders vote “FOR” the Merger.
MARKET PRICE AND DIVIDEND INFORMATION
On February 25, 2015, the last trading day before the public announcement of the Merger, the closing price of the Nielsen-Netherlands shares on the NYSE was $46.48 per share. On May 20, 2015, the last practicable date before the date of this proxy statement/prospectus, the closing price of the Nielsen-Netherlands shares was $45.78 per share.
On January 31, 2013, the Board of Directors of Nielsen-Netherlands adopted a cash dividend policy to pay quarterly cash dividends on its outstanding common stock. Following the completion of the Merger, we intend to continue our policy of making regular quarterly dividends on our outstanding common stock. However, our ability to declare and pay future dividends will depend on our results of operations, financial condition, cash requirements, future business prospects, contractual restrictions, other factors deemed relevant by our board of directors and restrictions imposed by English law.
Notwithstanding the Merger, as long as you are a holder of Nielsen shares on the applicable record date, you will receive any dividends declared during 2015 regardless of which Nielsen entity declares or pays them.
As discussed above in “– Capital Reduction,” following completion of the Merger, Nielsen-UK will undertake a court-approved capital reduction to create distributable reserves to enable Nielsen-UK to declare and pay future dividends following the capital reduction.
PROPOSALS RELATING TO THE MERGER
COMPARISON OF RIGHTS OF HOLDERS OF NIELSEN-NETHERLANDS SHARES WITH HOLDERS OF ORDINARY SHARES OF NIELSEN-UK
The completion of the Merger will change the governing corporate law that applies to shareholders of our parent company from Dutch law to English Law. The legal system governing corporations organized under English law differs from the legal system governing corporations organized under Dutch law. As a result, we are unable to adopt governing documents for Nielsen-UK that are identical to the governing documents for Nielsen-Netherlands. We have, however, sought to preserve in the articles of association of Nielsen-UK a similar allocation of material rights and powers between the shareholders and our board of directors that exists under Nielsen-Netherlands’s articles of association. Nevertheless, the proposed articles of association for Nielsen-UK differ from Nielsen-Netherlands’s articles of association, both in form and substance. We summarize the differences between the governing documents for Nielsen-Netherlands and Nielsen-UK, and the changes in your rights as a shareholder resulting from the Merger, under “Comparison of Rights of Shareholders.” We believe that these changes either (i) are required by English law or otherwise result from differences between the corporate laws of England and the corporate laws of the Netherlands, or (ii) relate to the change of the place of incorporation of the publicly traded parent of the Nielsen group from the Netherlands to England and Wales.
Nielsen-UK’s proposed articles of association will differ from Nielsen-Netherlands’s articles of association mostly to the extent that English corporate law differs from Dutch corporate law. Other than as required by English law or Dutch law, we believe that the rights of shareholders under Nielsen-UK’s articles of association are comparable to those under Nielsen-Netherlands’s articles of association. Under the English Companies Act of 2006 (the “English Companies Act”), the financial liability of a shareholder of Nielsen-UK is limited to the amount, if any, unpaid on the shares held by them. Once shares are credited as fully paid up, there is no further financial liability on the part of shareholders. Ordinary Shares issued upon the Merger will be credited as fully paid up on issuance.
The characteristics of and the differences between Nielsen-Netherlands shares and the Ordinary Shares of Nielsen-UK are summarized under “Description of Nielsen-UK Ordinary Shares” and “Comparison of Rights of Shareholders.”
If the Annual Meeting approves the Merger, any shareholder of Nielsen-Netherlands that voted against such proposal has the right to elect not to become a shareholder of Nielsen-UK and file a request for compensation in accordance with the DCC within one month after the Annual Meeting. A withdrawing shareholder can only make use of the withdrawal right in respect of the shares in Nielsen-Netherlands that such shareholder (i) held at the record date of the Annual Meeting and for which such shareholder voted against the Merger and (ii) still holds at the time of submitting the withdrawal application and at the effective time of the Merger. Upon the Merger taking effect, the withdrawing shareholder will not receive Ordinary Shares. Instead, such withdrawing shareholder will receive cash compensation (net of any Dutch dividend withholding tax that is required to be withheld by law) for the common shares in Nielsen-Netherlands for which it duly exercised his withdrawal right and such shares of Nielsen-Netherlands shall cease to exist as a consequence of the Merger taking effect.
In anticipation of the Merger, the Board of Directors proposes to amend the articles of association of Nielsen-Netherlands and include a criterion under which the amount of compensation to withdrawing shareholders who elect to exercise their withdrawal right can be established objectively. The criterion is such that, if possible, the amount of compensation corresponds to the value of the shares in Nielsen-Netherlands at the time of the entry into force of the Merger, so that the shareholders of Nielsen-Netherlands are treated equally as much as possible, regardless of whether they voted in favor or against the Merger.
Depending on the number of shares in respect of which a request to be compensated is filed, the amount of compensation per share in Nielsen-Netherlands shall be determined on the basis of (i) the average closing price of a share in Nielsen-Netherlands provided on a daily basis by the New York Stock Exchange over a period of twenty trading days prior to the effective time of the Merger or (ii) the cash proceeds realized by Nielsen-Netherlands from an offering of such number of newly issued shares in Nielsen-Netherlands equal to the number of shares in respect of which a request to be compensated is filed. If the compensation is determined in the manner set out under (ii), the costs and expenses of such offering, consisting of the registration and underwriting fees and other fees, costs and expenses primarily related to such offering, shall be deducted from the proceeds and aggregate amount of compensation. On payments of cash compensation, dividend
PROPOSALS RELATING TO THE MERGER
withholding tax at a rate of 15% will generally be withheld if and to the extent that such payments exceed the average capital recognized as paid-up on the relevant shares for Dutch dividend withholding tax purposes.
If you are a shareholder of record and would like to exercise your withdrawal rights, please fill out the withdrawal application attached to the Merger Proposal, included as Annex A to this proxy statement/prospectus, and deliver it to:
Nielsen N.V.
Attn: H. Black
Corporate Secretary
Nielsen
40 Danbury Road
Wilton, CT 06897
United States of America
E-mail: withdrawal.application@nielsen.com
If you hold your shares in “street name” or through Nielsen’s 401(k) plan, please contact your broker, bank, trustee or other nominee if you want to exercise your withdrawal rights.
EXCHANGE OF SHARES; DELIVERY OF SHARES TO FORMER RECORD HOLDERS
The exchange of Nielsen-Netherlands shares into Nielsen-UK Ordinary Shares will occur automatically at the effective time of the Merger. Computershare Trust Company, N.A., the exchange agent for the Merger, will, as soon as reasonably practicable after the effective time of the Merger, exchange Nielsen-Netherlands shares for Nielsen-UK’s Ordinary Shares to be received in the Merger pursuant to the terms of the Merger Proposal, following the receipt of certificates and a properly executed deed of transfer, where applicable.
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After the effective time of the Merger, each share of Nielsen-Netherlands will no longer be outstanding and will cease to exist, and each share certificate or book-entry share for registered holders that previously represented shares of Nielsen-Netherlands will represent only the right to receive new Ordinary Shares of Nielsen-UK.
Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS13 8AE, United Kingdom, will serve as the address at which the share register for our Ordinary Shares can be inspected after the effective time of the Merger. Prior to the effective time of the Merger, Computershare Trust Company, N.A., 250 Royall Street, Canton, Massachusetts, 02021 will be appointed to act as Nielsen-UK’s U.S. transfer agent as required under the rules of the NYSE.
Exchange of Shares for Registered Holders or Holders of Certificated Shares.If you currently hold share certificates representing Nielsen-Netherlands shares or if you otherwise hold Nielsen-Netherlands shares as a registered uncertificated record holder, as soon as reasonably practicable after the effective time of the Merger, the exchange agent will mail a deed of transfer to you. The deed of transfer will be accompanied by instructions for surrendering your shares in exchange for Ordinary Shares of Nielsen-UK. The deed of transfer will also specify that delivery will be effected, and risk of loss and title to the certificates representing your shares, if you possess physical stock certificates, will pass, only upon proper delivery of any such certificates to the exchange agent and in such case or in the case of registered uncertificated shares, upon adherence to the procedures set forth in the deed of transfer. Any such holder who wishes to transfer their shares from the custody of the exchange agent to another bank or broker or to receive certificated Ordinary Shares will not be charged any fees to do so by the exchange agent or Nielsen-UK.
PROPOSALS RELATING TO THE MERGER
Until holders of certificates previously representing shares of Nielsen-Netherlands have surrendered their certificates to the exchange agent for exchange and such holders and holders of registered uncertificated shares have adhered to the procedures set forth in the deed of transfer, those holders will not be able to transfer their shares or receive dividends or distributions with a record date after the effective time of the Merger. Until Nielsen-Netherlands stock certificates or registered uncertificated shares are surrendered for exchange, any dividends or other distributions of Nielsen-UK declared after the effective time of the Merger with respect to Ordinary Shares will be paid to the exchange agent for the benefit of the holder of such share certificate or, in the case of registered uncertificated shares, the registered holder. Nielsen-UK will pay to former Nielsen-Netherlands shareholders any unpaid dividends or other distributions, without interest, only after they have duly surrendered their Nielsen-Netherlands stock certificates or registered uncertificated shares. After the effective time of the Merger, if stock certificates representing Nielsen-Netherlands shares are presented for transfer, they will be cancelled and exchanged for the Ordinary Shares into which the Nielsen-Netherlands shares represented by that certificate have been converted. Holders of share certificates or registered uncertificated shares will, however, be able to vote such shares through the exchange agent acting as their proxy prior to returning a properly completed deed of transfer.
Certificated or registered uncertificated holders of shares of Nielsen-Netherlands that elect to receive a share certificate representing Ordinary Shares of Nielsen-UK should particularly note that subsequent transfers of Ordinary Shares outside of DTC may attract stamp duty and SDRT under English law. For more information, see “Material Tax Considerations Relating to the Merger – UK Tax Considerations – Stamp Duty and SDRT.”As a result, each former registered uncertificated holder or certificated holder of shares of Nielsen-Netherlands is strongly encouraged to provide the documents and information requested by the exchange agent in a timely manner, so any unrestricted shares may be held within the facilities of DTC.
No Liability for Securities.Any portion of the securities deposited with the exchange agent that remain undistributed to the former holders of Nielsen-Netherlands shareholders at the twelve month anniversary of the effective time of the Merger will be delivered to Nielsen-UK, as the surviving corporation, upon demand, or to its designee, and any former holder of Nielsen-Netherlands shares who has not theretofore properly surrendered its stock certificates shall thereafter look only to Nielsen-UK, as the surviving corporation, for payment of any consideration due to it hereunder.
None of Nielsen-Netherlands, Nielsen-UK or the exchange agent will be liable to any former shareholder of Nielsen-Netherlands for any securities properly delivered by the exchange agent or its nominee, as the case may be, to a public official pursuant to applicable abandoned property, escheat or similar law nine months after the effective time of the Merger. If any certificate representing shares of Nielsen-Netherlands has not been surrendered prior to two years after the effective time of the Merger (or immediately prior to an earlier date on which the Ordinary Shares in respect of the stock certificate would otherwise escheat to or become the property of any governmental entity) any cash, share dividends and distributions otherwise payable in respect of the certificate shall, to the extent permitted by applicable law, become the property of Nielsen-UK, as the surviving corporation, free and clear of all claims or interest of any person previously entitled thereto.
If the Merger is completed, Nielsen-UK will assume, and thereby become liable for, all of the Assumed Plans. To the extent that an award under an Assumed Plan relates to shares of common stock in Nielsen-Netherlands, then, after the effective time of the Merger, such award shall instead relate to Ordinary Shares. The Nielsen-Netherlands shareholder approval of the Merger will also be deemed to constitute any required shareholder approval of these amendments and the assumption of the Assumed Plans by Nielsen-UK and any outstanding awards thereunder.
Nielsen-Netherlands’s shares are currently listed on the NYSE. We intend to make an application so that, immediately following the effective time of the Merger, the Ordinary Shares of Nielsen-UK will be listed and traded in U.S. dollars on the NYSE under the symbol “NLSN,” the same symbol under which the Nielsen-Netherlands shares are currently listed. There is currently no established public trading market for the shares of Nielsen-UK. We do not intend to seek an additional listing on the London Stock Exchange.
PROPOSALS RELATING TO THE MERGER
ACCOUNTING TREATMENT OF THE MERGER UNDER U.S. GAAP
Under U.S. GAAP, the Merger represents a transaction between entities under common ownership. Assets and liabilities transferred between entities under common ownership are accounted for at cost. Accordingly, the assets and liabilities of Nielsen-Netherlands will be reflected at their carrying amounts in the accounts of Nielsen-UK at the effective time of the Merger.
Upon the effective time of the Merger, Nielsen-UK will assume the guarantee obligations of Nielsen-Netherlands under the senior notes issued by subsidiaries of Nielsen-Netherlands.
IMPACT OF MERGER ON OPERATING COSTS AND EFFECTIVE TAX RATES
We expect to incur in 2015 a total of approximately $6.5 million in transaction costs in connection with the Merger. The substantial majority of these costs will be incurred regardless of whether the Merger is completed and prior to your vote on the proposal.
We do not expect the Merger to have a material effect on our operating costs, including our selling, general and administrative expenses. In addition, we do not expect the Merger to materially affect our worldwide effective corporate tax rate.
We believe that the cost of doing business in the UK is generally comparable to the cost of doing business in the Netherlands.
Material Tax Considerations Relating to the Merger
The information presented under the caption “U.S. Federal Income Tax Considerations” below is a discussion of the material U.S. federal income tax consequences to U.S. holders and non-U.S. holders (as defined below) of the Merger and of ownership and disposition of the Nielsen-UK shares received in the Merger. The information presented under the caption “Dutch Tax Considerations” is a discussion of the material Dutch tax consequences (1) to shareholders of the Merger and of ownership and disposition of the Nielsen-UK shares received in the Merger and (2) to Nielsen-Netherlands of the Merger. The information presented under the caption “UK Tax Considerations” is a discussion of the material UK tax consequences (1) to shareholders resident for tax purposes in a country other than the UK of the Merger and of ownership and disposition of the Nielsen-UK shares received in the Merger and (2) to Nielsen-UK of the Merger and subsequent operations.
You should consult your own tax advisor regarding the applicable tax consequences to you of the Merger and of ownership and disposition of the Nielsen-UK shares under the laws of the United States (federal, state and local), the UK, the Netherlands, and any other applicable jurisdiction.
U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes certain U.S. federal income tax consequences of the Merger to Nielsen-Netherlands shareholders as of the date hereof. To the extent the summary relates to matters of U.S. federal income tax law, and subject to the qualifications herein (including with respect to PFIC matters as described below), it is the opinion of Simpson Thacher & Bartlett LLP, our counsel as to matters of U.S. federal income tax law. Except where noted, this summary deals only with those holders that hold their Nielsen-Netherlands common shares as capital assets.
This summary does not represent a detailed description of the U.S. federal income tax consequences applicable to you if you are subject to special treatment under the U.S. federal income tax laws, including if you are:
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As used herein, the term “U.S. holder” means a holder of Nielsen-Netherlands common shares or, after the completion of the merger, Nielsen-UK ordinary shares, that is for U.S. federal income tax purposes:
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MATERIAL TAX CONSIDERATIONS RELATING TO THE MERGER
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The discussion below is based upon the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and Treasury regulations, rulings and judicial decisions thereunder as of the date hereof, and such authorities may be replaced, revoked or modified so as to result in U.S. federal income tax consequences different from those discussed below. Neither Nielsen-Netherlands nor Nielsen-UK will request a ruling from the Internal Revenue Service (“IRS”) as to the U.S. federal income tax consequences of the Merger, post-Merger ownership and disposition of Nielsen-UK shares or any other matter. There can be no assurance that the IRS will not challenge any of the U.S. federal income tax consequences described below.
If a partnership holds our shares, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding our shares, you should consult your tax advisors. A “non-U.S. holder” is a holder (other than a partnership) that is not a U.S. holder.
This summary does not contain a detailed description of all the U.S. federal income tax consequences to you in light of your particular circumstances and does not address the Medicare tax on net investment income or the effects of any state, local or non-U.S. tax laws.All holders should consult their own tax advisors concerning the specific tax consequences of the Merger in light of their particular circumstances as well as any consequences arising under the laws of any other taxing jurisdiction.
Material Tax Consequences to U.S. Holders
The Merger
Based upon representations contained in representation letters provided by Nielsen-Netherlands and Nielsen-UK and on customary factual assumptions, all of which must continue to be true and accurate in all material respects as of the effective time of the Merger, it is the opinion of Simpson Thacher & Bartlett LLP that the receipt by Nielsen-Netherlands shareholders of Nielsen-UK shares pursuant to the Merger will constitute a tax-free reorganization under Section 368(a) of the Code. Based on the foregoing, the material consequences to U.S. holders of the Merger will be as follows.
U.S. holders will not recognize gain or loss in the Merger. The tax basis of the Nielsen-UK shares received by U.S. holders in the Merger will be equal to the tax basis of their Nielsen-Netherlands shares held prior to the Merger. The holding period of the Nielsen-UK shares received by U.S. holders will include the period those holders held their Nielsen-Netherlands shares. U.S. holders who hold their Nielsen-Netherlands shares with differing tax bases or holding periods are urged to consult their tax advisors with regard to identifying the tax bases and holding periods of the particular Nielsen-UK shares received in the Merger.
Ownership of Nielsen-UK Shares
Distributions on Nielsen-UK Shares.The gross amount of distributions on Nielsen-UK shares (including any amounts withheld to reflect UK withholding tax) will be taxable as dividends to the extent paid out of Nielsen-UK’s current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Such income (including any withheld taxes) will be includable in a U.S. holder’s gross income as ordinary income on the day they are actually or constructively received. Such dividends will not be eligible for the dividends-received deduction allowed to corporations under the Code.
With respect to non-corporate U.S. holders, certain dividends from a qualified foreign corporation may be subject to reduced rates of taxation. A qualified foreign corporation includes a foreign corporation that is eligible for the benefits of a comprehensive income tax treaty with the United States which the U.S. Treasury Department determines to be satisfactory for these purposes and which includes an exchange of information provision. The U.S. Treasury Department has determined that the current income tax treaty between the United States and the United Kingdom meets these requirements, and Nielsen-UK believes it is eligible for the benefits of that treaty. A foreign corporation is also treated as a qualified foreign corporation with respect to dividends paid by that corporation on shares that are readily tradable on an established securities market in the United States. U.S. Treasury Department guidance indicates that Nielsen-UK shares, which are expected to be listed on the NYSE immediately following the Merger, are readily tradable on an established securities market in the United States. Non-corporate holders that do not meet a minimum holding period requirement during which they are not protected from the risk
MATERIAL TAX CONSIDERATIONS RELATING TO THE MERGER
of loss or that elect to treat the dividend income as “investment income’’ pursuant to Section 163(d)(4) of the Code will not be eligible for the reduced rates of taxation regardless of our status as a qualified foreign corporation. In addition, the rate reduction will not apply to dividends if the recipient of a dividend is obligated to make related payments with respect to positions in substantially similar or related property. This disallowance applies even if the minimum holding period has been met.
To the extent that the amount of any distribution exceeds Nielsen-UK’s current and accumulated earnings and profits for a taxable year, as determined under U.S. federal income tax principles, the distribution will first be treated as a tax-free return of capital, causing a reduction in the adjusted basis of the Nielsen-UK shares, (thereby increasing the amount of gain, or decreasing the amount of loss, to be recognized by you on a subsequent disposition of the common stock), and the balance in excess of adjusted basis will be taxed as capital gain recognized on a sale or other disposition. However, we do not expect to determine earnings and profits in accordance with U.S. federal income tax principles. Therefore, you should expect that a distribution will generally be treated as a dividend (as discussed above).
Distributions of Nielsen-UK shares or rights to subscribe for Nielsen-UK shares that are received as part of a pro rata distribution to all of our stockholders generally will not be subject to U.S. federal income tax.
Passive Foreign Investment Company.We believe that Nielsen-Netherlands is not, and that neither Nielsen-Netherlands or Nielsen-UK will be in the year of the Merger, a passive foreign investment company (a “PFIC”) for U.S. federal income tax purposes, and we expect to operate in such a manner so as not to become a PFIC. If, however, we are or become a PFIC, you could be subject to additional U.S. federal income taxes on gain recognized with respect to our shares and on certain distributions, plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. As the determination of our PFIC status is based on an annual determination that cannot be made until the close of a taxable year, and involves extensive factual investigation, including ascertaining the fair market value of all of our assets on a quarterly basis and the character of each item of income we earn, Simpson Thacher & Bartlett LLP expresses no opinion with respect to our PFIC status.
Non-corporate U.S. holders will not be eligible for reduced rates of taxation on any dividends received from us, if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.
You are urged to consult your tax advisors concerning the U.S. federal income tax consequences of holding our shares if we are considered a PFIC in any taxable year.
Sale, Exchange or Other Taxable Disposition of Nielsen-UK Shares.For U.S. federal income tax purposes, a U.S. holder will recognize taxable gain or loss on any sale or other disposition of Nielsen-UK shares in an amount equal to the difference between the amount realized for the shares and the U.S. holder’s tax basis in the shares. Such gain or loss will generally be capital gain or loss. Capital gains of non-corporate U.S. holders derived with respect to capital assets held for more than one year are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations. Any gain or loss recognized will generally be treated as United States source gain or loss.
Material Tax Consequences to Non-U.S. Holders
The Merger
In general, the receipt by non-U.S. holders of Nielsen-UK shares pursuant to the Merger will not be subject to U.S. federal income or withholding tax on any realized gain with respect to the Merger.
Ownership of Nielsen-UK Shares
Non-U.S. holders of Nielsen-UK shares will generally not be subject to U.S. federal income or withholding tax on dividend income from Nielsen-UK and will not be subject to U.S. federal income or withholding tax on any gain recognized on a subsequent disposition of Nielsen-UK shares, unless:
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MATERIAL TAX CONSIDERATIONS RELATING TO THE MERGER
Information Reporting and Backup Withholding
U.S. holders that own at least five percent (by vote or value) of Nielsen-Netherlands immediately before the Merger will be required to file certain reorganization statements under Section 368 of the Code.
In general, information reporting will apply to dividends in respect of Nielsen-UK shares and the proceeds from the sale, exchange or redemption of such shares that are paid within the United States (and in certain cases, outside the United States), unless the holder is an exempt recipient such as a corporation. A backup withholding tax may apply to such payments if the holder fails to provide a taxpayer identification number or certification of other exempt status or fails to report in full dividend and interest income.
Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a holder’s U.S. federal income tax liability provided the required information is timely furnished to the IRS.
In order not to be subject to backup withholding tax on a subsequent disposition of Nielsen-UK shares, or dividends paid on those shares, a non-U.S. holder may be required to provide a taxpayer identification number, certify the holder’s foreign status or otherwise establish an exemption. Non-U.S. holders of Nielsen-UK shares should consult their tax advisors regarding the application of information reporting and backup withholding in their particular situations, the availability of exemptions, and the procedure for obtaining such an exemption, if available. Any amount withheld from a payment to a non-U.S. holder under the backup withholding rules may be allowed as a refund or credit against the holder’s U.S. federal income tax, provided that the required information is timely furnished to the IRS.
The following summary of certain Dutch taxation matters is based on the laws and practice in force as of the date of this proxy statement/prospectus and is subject to any changes in law and the interpretation and application thereof, which changes could be made with retroactive effect. The following summary does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to approve the Merger, and does not purport to deal with the tax consequences applicable to all categories of investors, some of which may be subject to special rules. This discussion, to the extent it states matters of Dutch tax law or legal conclusions and subject to the qualifications herein, represents the opinion of Clifford Chance LLP. Such opinion is based in part on facts described in this proxy statement/prospectus and on various other factual assumptions, representations and determinations, including representations contained in certificates provided to Clifford Chance LLP. Any alteration or incorrectness of such facts, assumptions, representations or determinations could adversely impact the accuracy of this summary and such opinion.
For the purpose of this summary it is assumed that a holder of Nielsen-Netherlands shares or Ordinary Shares of Nielsen-UK, being an individual or a non-resident entity, does not have nor will have a substantial interest (aanmerkelijk belang) in Nielsen-Netherlands or Nielsen-UK.
Generally speaking, an individual has a substantial interest in a company if (a) such individual, either alone or together with his partner, directly or indirectly has, or (b) certain relatives of such individual or his partner, directly or indirectly have, (i) the ownership of, a right to acquire the ownership of, or certain rights over, shares representing 5% or more of either the total issued and outstanding capital of such company or the issued and outstanding capital of any class of shares of such company, or (ii) the ownership of, or certain rights over, profit participating certificates (winstbewijzen) that relate to 5% or more of either the annual profit or the liquidation proceeds of such company. Also, an individual has a substantial interest in a company if his partner has, or if certain relatives of the individual or his partner have, a deemed substantial interest in such company. Generally, an individual, or his partner or relevant relative, has a deemed substantial interest in a company if either (a) such person or his predecessor has disposed of or is deemed to have disposed of all or part of a substantial interest or (b) such person has transferred an enterprise in exchange for shares in such company, on a non-recognition basis.
Generally speaking, a non-resident entity has a substantial interest in a company if such entity, directly or indirectly has (i) the ownership of, a right to acquire the ownership of, or certain rights over shares representing 5% or more of either the total issued and outstanding capital of such company or the issued and outstanding capital of any class of shares of such company, or (ii) the ownership of, or certain rights over, profit participating certificates (winstbewijzen) that relate to 5% or more of either the annual profit or the liquidation proceeds of such company. Generally, an entity has a deemed substantial
MATERIAL TAX CONSIDERATIONS RELATING TO THE MERGER
interest in such company if such entity has disposed of or is deemed to have disposed of all or part of a substantial interest on a non-recognition basis.
For the purpose of this summary, the term entity means a corporation as well as any other person that is taxable as a corporation for Dutch corporate income tax purposes.
Where this summary refers to a holder of shares in Nielsen-Netherlands or Nielsen-UK, an individual holding shares in Nielsen-Netherlands or Nielsen-UK or an entity holding shares in Nielsen-Netherlands or Nielsen-UK, such reference is restricted to an individual or entity holding legal title to as well as an economic interest in such shares or otherwise being regarded as owning such shares for Dutch tax purposes. It is noted that for purposes of Dutch income, corporate, gift and inheritance tax, assets legally owned by a third party such as a trustee, foundation or similar entity, may be treated as assets owned by the (deemed) settlor, grantor or similar originator or the beneficiaries in proportion to their interest in such arrangement.
Where the summary refers to “the Netherlands” or “Dutch” it refers only to the European part of the Kingdom of the Netherlands.
Investors are advised to consult their professional advisers as to the tax consequences in connection with the approval of the Merger and in connection with exercising their withdrawal rights.
TAX CONSEQUENCES OF THE MERGER
Tax consequences for Nielsen-Netherlands
The Merger constitutes a taxable transaction for Dutch corporate income tax purposes pursuant to which all assets and liabilities are deemed for Dutch tax purposes to be transferred at fair market value. However, by virtue of the application of the Dutch participation exemption (deelnemingsvrijstelling) that will apply to gains or losses realized on the deemed transfer of the shares in Valcon Acquisition B.V., it is not expected that the Merger will result in any substantial tax liability that would result in Nielsen-Netherlands paying corporate income tax.
Withholding tax
The Merger will not give rise to Dutch dividend withholding tax, except with respect to payments of compensation to shareholders of Nielsen-Netherlands that exercise their withdrawal rights. On payments of cash compensation, dividend withholding tax at a rate of 15% will generally be withheld if and to the extent that such payments exceed the average capital recognized as paid-up on the relevant shares for Dutch dividend withholding tax purposes.
Taxes on capital gains
Resident entities: An entity holding Nielsen-Netherlands shares which is, or is deemed to be, resident in the Netherlands for Dutch tax purposes and which is not tax exempt, will generally be subject to corporate income tax in the Netherlands in respect of a capital gain derived from such shares at the prevailing statutory rates, unless the holder has the benefit of the participation exemption (deelnemingsvrijstelling) with respect to such shares. Generally speaking, a holder of Nielsen-Netherlands shares will have the benefit of the participation exemption (deelnemingsvrijstelling) if the holder owns at least 5% of the nominal paid-up share capital of Nielsen-Netherlands.
Resident individuals: An individual holding Nielsen-Netherlands shares who is or is deemed to be resident in the Netherlands for Dutch income tax purposes will be subject to income tax in the Netherlands in respect of a capital gain derived from such shares at rates up to 52% if:
MATERIAL TAX CONSIDERATIONS RELATING TO THE MERGER
Non-residents: A holder of Nielsen-Netherlands shares which is not and is not deemed to be resident in the Netherlands for the relevant Dutch tax purposes will not be subject to taxation in the Netherlands on a capital gain derived from Nielsen-Netherlands shares unless:
No recognition of capital gain: If on the basis of the above a taxable capital gain would arise to a shareholder receiving shares in Nielsen-UK in exchange for all its shares in Nielsen-Netherlands in the Merger, such shareholder may possibly apply roll-over relief (doorschuiving) pursuant to the Dutch income tax Act (Wet Inkomstenbelasting 2001) as a result of which such gain will not be recognized for Dutch tax purposes by transferring the tax book value of the Nielsen-Netherlands shares to the Ordinary Shares acquired in the Merger.
Value added tax
No value added tax will be due in the Netherlands on the exchange of Nielsen-Netherlands shares for Ordinary Shares and/or on payments of compensation in respect of exercised withdrawal rights.
Other taxes
There is no registration tax, capital tax, customs duty, transfer tax, stamp duty, or any other similar tax or duty payable in the Netherlands in respect of or in connection with the approval of the Merger and/or on exercising withdrawal rights.
TAX CONSEQUENCES OF THE HOLDING AND DISPOSING OF ORDINARY SHARES
Withholding tax
All payments made by Nielsen-UK in respect of Ordinary Shares can be made free of withholding or deduction of any taxes of whatever nature imposed, levied, withheld or assessed by the Netherlands or any political subdivision or taxing authority thereof or therein.
Taxes on income and capital gains
Resident entities: An entity holding Ordinary Shares which is, or is deemed to be, resident in the Netherlands for corporate income tax purposes and which is not tax exempt, will generally be subject to corporate income tax in respect of income or a capital gain derived from Ordinary Shares at the prevailing statutory rates, unless the holder has the benefit of the participation exemption (deelnemingsvrijstelling) with respect to such Ordinary Shares. Generally speaking, an entity holding Ordinary Shares will have the benefit of the participation exemption (deelnemingsvrijstelling) with respect to such shares if the entity owns at least 5% of the nominal paid-up share capital of Nielsen-UK.
Resident individuals: An individual holding Ordinary Shares who is or is deemed to be resident in the Netherlands for Dutch income tax purposes will be subject to income tax in respect of income or a capital gain derived from Ordinary Shares at rates up to 52% if:
MATERIAL TAX CONSIDERATIONS RELATING TO THE MERGER
If neither condition (a) nor condition (b) applies, an individual holding Ordinary Shares will be subject to income tax on the basis of a deemed return, regardless of any actual income or capital gain derived from Ordinary Shares. The deemed return amounts to 4% of the value of the individual’s net assets as per the beginning of the relevant fiscal year (including the Ordinary Shares). Subject to application of personal allowances, the deemed return will be taxed at a rate of 30%.
Non-residents: A holder of Ordinary Shares which is not and is not deemed to be resident in the Netherlands for the relevant tax purposes will not be subject to taxation on income or a capital gain derived from Ordinary Shares unless:
Gift and inheritance taxes
Dutch gift or inheritance taxes will not be levied on the occasion of the transfer of Ordinary Shares by way of gift by, or on the death of, a holder, unless:
Value added tax
No value added tax will be due in the Netherlands in respect of payments on Ordinary Shares or payments made upon a transfer of Ordinary Shares.
Other taxes
There is no registration tax, capital tax, customs duty, transfer tax, stamp duty, or any other similar tax or duty payable in the Netherlands in respect of or in connection with the allotment, delivery or transfer of Ordinary Shares.
General
The following paragraphs constitute a non-exhaustive summary of certain UK tax matters relevant to the Merger and the future participation of shareholders in Nielsen-UK based on current law and published practice of HMRC, both of which are subject to change (potentially with retrospective effect).
These paragraphs are aimed at non-UK shareholders and as such do not address the position of shareholders who are resident in the UK for UK tax purposes or shareholders who hold shares in connection with a trade, profession or vocation carried on in the UK (whether through a branch or agency or, in the case of a company, through a permanent establishment or otherwise). In addition, the following paragraphs do not address the position of (a) persons who have (or are deemed to have) acquired shares by virtue of an office or employment; (b) persons who hold shares as part of a hedging transaction; or (c) persons that are insurance companies, dealers in securities or broker-dealers. The following paragraphs assume that shareholders are the absolute beneficial owners of the shares in Nielsen-UK.
The following is intended only as a general guide and is not intended to be, nor should it be considered to be, legal or tax advice to any shareholder.
Shareholders who are in any doubt about their taxation position should consult their own professional advisors.
MATERIAL TAX CONSIDERATIONS RELATING TO THE MERGER
Consequences for Nielsen-UK
Nielsen-UK will be within the scope of UK corporation tax following the Merger. We expect that Nielsen-UK will not be subject to UK corporation tax as a result of the Merger itself.
Consequences for Non-UK Shareholders
Taxation of Dividends
Under current UK tax legislation, any future dividends paid by Nielsen-UK will not be subject to withholding or deduction on account of UK tax, irrespective of the tax residence or the individual circumstances of the recipient shareholder.
Dispositions of Nielsen-UK shares
Subject to the matters discussed below, holders of shares in Nielsen-UK who are not resident in the UK for UK tax purposes should not be subject to UK corporation tax or capital gains tax on the disposal of such shares unless they carry on a trade in the UK through a permanent establishment (where the shareholder is a company) or a trade, profession or vocation in the UK through a branch or agency (where the shareholder is not a company) and have used, held or acquired such shares for the purposes of such trade, profession or vocation or such permanent establishment, branch or agency (as appropriate).
An individual shareholder who for a period of less than five years either has ceased to be resident for tax purposes in the UK or has become resident in a territory outside the UK for purposes of double taxation relief arrangements and who disposes of the Shares during that period, may be liable on his or her return to the UK to UK capital gains tax on any chargeable gain realized. Nothing in any double taxation relief arrangements prevents such an individual from being subject to UK capital gains tax in those circumstances.
Stamp duty and SDRT
The discussion below relates to holders of Ordinary Shares wherever resident, but not to holders such as market makers, brokers, dealers and intermediaries, to whom special rules may apply.
Transfers of Ordinary Shares
Transfers of Ordinary Shares held in book entry form through the facilities of DTC will not attract a charge to stamp duty or SDRT in the UK provided no instrument of transfer is entered into (which should not be necessary) and that no election that applies to the Ordinary Shares is made or has been made by DTC under section 97A of the Finance Act 1986. It is our understanding that no such election has been made by DTC.
The transfer on sale of Ordinary Shares held in certificated form (and hence not within the DTC system) will generally be subject to stamp duty on the instrument of transfer at the rate of 0.5% of the amount or value of the consideration for the shares (rounded up if necessary to the nearest multiple of £5). Stamp duty is normally paid by the purchaser of the shares.
An unconditional agreement to transfer Ordinary Shares that are not within the DTC system will normally give rise to a charge to SDRT at the rate of 0.5% of the amount or value of the consideration for the shares. However, where within six years of the date of the agreement an instrument of transfer is executed and duly stamped, the SDRT liability will be cancelled and any SDRT which has been paid may be reclaimed. SDRT is normally the liability of the purchaser of the shares.
If Ordinary Shares not held within the DTC system are transferred (a) to, or to a nominee for, a person whose business is or includes the provision of clearance services (including the DTC) or (b) to, or to a nominee or agent for, a person whose business is or includes issuing depositary receipts, stamp duty or SDRT may be payable at a rate of 1.5% of the amount or value of the consideration payable or, in certain circumstances, the value of the shares. This liability for stamp duty or SDRT will strictly be accountable by the depositary or clearance service operator or their nominee, as the case may be, but will in practice generally be reimbursed by participants in the clearance service or depositary receipt scheme.
Repurchase of Ordinary Shares
The repurchase of Ordinary Shares by Nielsen-UK (whether held within the DTC system or not) will attract a charge to stamp duty of 0.5% of the consideration paid by Nielsen-UK in respect of the repurchase.
Description of Nielsen-UK Ordinary Shares
The following information is a summary of the material terms of the Nielsen-UK Ordinary Shares, par value€0.07 per share, as specified in the form of Nielsen-UK’s articles of association, which will be adopted prior to the consummation of the Merger (the “Articles”). You are encouraged to read the Articles, which are included as Schedule 3 to Annex A to this proxy statement/prospectus. See also “Comparison of Rights of Shareholders.”
Pursuant to the Merger Proposal, each registered share of Nielsen-Netherlands (excluding shares held by Nielsen-Netherlands) will be exchanged for one Nielsen-UK Ordinary Share. All of the Nielsen-UK Ordinary Shares will be issued fully paid and will not be subject to any further calls or assessments by Nielsen-UK.
There are no conversion rights or redemption provisions relating to any Nielsen-UK Ordinary Shares that will be delivered in connection with the Merger. Under English law, persons who are neither residents nor nationals of the UK may freely hold, vote and transfer the Nielsen-UK Ordinary Shares in the same manner and under the same terms as UK residents or nationals.
As of the date of this proxy statement/prospectus, there is one subscriber share in issue. Nielsen-Netherlands currently holds the subscriber share. The subscriber share will be bought back and cancelled immediately after the effective time of the Merger.
In connection with the re-registration of Nielsen-UK as a public limited company, which will occur before the effective time of the Merger, the Nielsen-UK board of directors will be authorized to allot and issue 50,000 sterling non-voting shares of £1.00 each. Under English law, in order to be registered as a public limited company, Nielsen-UK is required to have a minimum nominal share capital of £50,000 denominated in sterling or€57,100 denominated in euros. The sterling non-voting shares are therefore intended to meet this requirement. The sterling non-voting shares will be issued as redeemable shares with no voting rights, no entitlement to any dividends or distributions and, on a return of capital of Nielsen-UK on a winding up or otherwise, will only be entitled to receive out of the assets available for distribution to shareholders the sum of £1.00 with no further participation right in the assets. The sterling non-voting shares will be automatically redeemed upon the creation of distributable reserves through the capitalization of the merger reserve created as a result of the Merger and the subsequent capital reduction as set out in (c) below.
In addition, prior to the effective time of the Merger, the Nielsen-UK board of directors will be authorized to allot and issue shares in Nielsen-UK up to an aggregate nominal amount (i.e., par value) of€91 million, comprised of any of the following:
DESCRIPTION OF NIELSEN-UK ORDINARY SHARES
Following the completion of the Merger, we intend to continue our policy of making regular quarterly dividends on our outstanding common stock. Subject to the English Companies Act, the Nielsen-UK shareholders may declare a final dividend by ordinary resolution (which must be recommended by Nielsen-UK’s board of directors), and the Nielsen-UK board of directors may declare and pay interim dividends to shareholders, in accordance with their respective rights and interests in Nielsen-UK. Dividends may only be paid out of “distributable reserves”, defined as “accumulated, realized profits, so far as not previously utilized by distribution or capitalization, less accumulated, realized losses, so far as not previously written off in a reduction or reorganization of capital”. Nielsen-UK is not permitted to pay dividends out of share capital, which includes share premiums. Realized reserves are determined in accordance with generally accepted accounting principles at the time the relevant accounts are prepared. Nielsen-UK will not be permitted to make a distribution if, at the time, the amount of its net assets is less than the aggregate of its issued and paid-up share capital and undistributable reserves or to the extent that the distribution will reduce the net assets below such amount. Nielsen-UK is seeking to ensure that sufficient distributable reserves will be available to permit dividends, distributions or share repurchases following the Merger by undertaking a reduction of capital. Please see “Proposals Relating to the Merger – Capital Reduction” for more information.
The capital reduction is not a requirement for Nielsen-UK to be able to satisfy any dividend obligations declared by Nielsen-Netherlands that remain unpaid at the effective time of the Merger.
There are no fixed dates on which entitlement to dividends arise on any of the Ordinary Shares.
The directors may, with the prior authority of an ordinary resolution of the shareholders, decide that the payment of all or any part of a dividend be satisfied by transferring non-cash assets of equivalent value, including shares or securities in any company.
The Articles also permit a scrip dividend scheme under which the directors may, with the prior authority of an ordinary resolution of Nielsen-UK, allot to those holders of a particular class of shares who have elected to receive further shares of that class or Nielsen-UK Ordinary Shares, in either case credited as fully paid instead of cash, in respect of all or part of a dividend.
If a shareholder owes any money to Nielsen-UK in respect of any shares in Nielsen-UK, the Nielsen-UK board of directors may deduct any of this money from any dividend on the relevant shares, or from other money payable by Nielsen-UK in respect of these shares. Money deducted in this way may be used to pay the amount owed to Nielsen-UK in respect of the relevant shares.
Unclaimed dividends and other amounts payable by Nielsen-UK can be invested or otherwise used by directors for the benefit of Nielsen-UK until they are claimed under English law. All dividends remaining unclaimed for a period of twelve years after they first became due for payment will be forfeited and cease to be owing to the shareholder.
The Articles provide that, unless otherwise decided by the directors, a resolution put to the vote of a general meeting will be decided on a poll taken at the meeting. Subject to any rights or restrictions as to voting attached to any class of shares and subject to disenfranchisement (i) in the event of non-payment of any call or other sum due and payable in respect of any shares not fully paid, or (ii) in the event of any non-compliance with any statutory notice requiring disclosure of an interest in shares, on a poll taken at a meeting, every qualifying shareholder present and entitled to vote on the resolution has one vote for every Nielsen-UK Ordinary Share of which he, she or it is the holder.
In the case of joint holders, the vote of the senior holder who votes (or any proxy duly appointed by him) may be counted by Nielsen-UK.
AMENDMENT TO THE ARTICLES OF ASSOCIATION
Under English law, the shareholders may amend the articles of association of a public limited company by special resolution (i.e. a resolution approved by the holders of at least 75% of the aggregate voting power of the outstanding Nielsen-UK Ordinary Shares that, being entitled to vote, vote on the resolution) at a general meeting.
DESCRIPTION OF NIELSEN-UK ORDINARY SHARES
The full text of the special resolution must be included in the notice of the meeting.
In the event of a voluntary winding up of Nielsen-UK, the liquidator may, on obtaining any sanction required by law, divide among the shareholders the whole or any part of the assets of Nielsen-UK, whether or not the assets consist of property of one kind or of different kinds and vest the whole or any part of the assets in trustees upon such trusts for the benefit of the members as he, with the like sanction, will determine.
The liquidator may not, however, distribute to a shareholder without his consent an asset to which there is attached a liability or potential liability for the owner.
Upon any such winding up, after payment or provision for payment of Nielsen-UK’s debts and liabilities, the holders of Nielsen-UK Ordinary Shares (and any other shares outstanding at the relevant time which rank equally with such shares) will share equally, on a share for share basis, in Nielsen-UK’s assets remaining for distribution to the holders of Nielsen-UK Ordinary Shares.
PREEMPTIVE RIGHTS AND NEW ISSUES OF SHARES
Under English law, the Nielsen-UK board of directors is, with certain exceptions, unable to allot and issue securities without being authorized either by the shareholders in a general meeting or by the company’s articles of association. In addition, English law requires the issuance of equity securities that are to be paid for wholly in cash (except shares held under an employees’ share scheme) must be offered first to the existing holders of equity securities in proportion to the respective nominal amounts (i.e. par values) of their holdings on the same or more favorable terms, unless a special resolution (i.e. a resolution approved by the holders of at least 75% of the aggregate voting power of the outstanding Nielsen-UK Ordinary Shares that, being entitled to vote, vote on the resolution) to the contrary has been passed in a general meeting of shareholders or the articles of association otherwise provide an exclusion from this requirement (which exclusion can be for a maximum of five years after which a further shareholder approval would be required to renew the exclusion). In this context, equity securities generally means shares other than shares which, with respect to dividends or capital, carry a right to participate only up to a specified amount in a distribution, which, in relation to Nielsen-UK, will include the Nielsen-UK Ordinary Shares and all rights to subscribe for or convert securities into such shares.
A provision in the Articles will authorize the directors, for a period of up to five years from the date of the shareholder resolution granting such authorization, to (i) allot shares in Nielsen-UK, or to grant rights to subscribe for or to convert or exchange any security into shares in Nielsen-UK up to an aggregate nominal amount (i.e., par value) of€91 million and (ii) exclude preemptive rights in respect of such issuances for the same period of time. The authorization will continue for five years and renewal of such authorization is expected to be sought at least once every five years, and possibly more frequently.
English law also prohibits an English company from issuing shares at a discount to nominal amount (i.e., par value) or for no consideration. If the shares are issued upon the lapse of restrictions or the vesting of any restricted stock award or any other share-based grant underlying any Nielsen-UK Ordinary Shares, the nominal amount (i.e., par value) of the shares must be paid up in accordance with English law.
DISCLOSURE OF INTERESTS IN SHARES
English law gives Nielsen-UK the power to serve a notice requiring any person whom it knows has, or whom it has reasonable cause to believe has, or within the previous three years has had, any ownership interest in any Nielsen-UK shares to disclose specified information regarding those shares. Failure to provide the information requested within the prescribed period (or knowingly or recklessly providing false information) after the date the notice is sent can result in criminal or civil sanctions being imposed against the person in default.
Under the Articles, if any shareholder, or any other person appearing to be interested in Nielsen-UK shares held by such shareholder, fails to give Nielsen-UK the information required by the notice, then the Nielsen-UK board of directors may
DESCRIPTION OF NIELSEN-UK ORDINARY SHARES
withdraw voting and certain other rights, place restrictions on the rights to receive dividends and transfer such shares (including any shares allotted or issued after the date of the notice in respect of those shares).
ALTERATION OF SHARE CAPITAL/REPURCHASE OF SHARES
Subject to the provisions of the English Companies Act, and without prejudice to any relevant special rights attached to any class of shares, Nielsen-UK may, from time to time:
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English law prohibits Nielsen-UK from purchasing its own shares unless such purchase has been approved by its shareholders. Shareholders may approve two different types of such share purchases: “on-market” purchases or “off-market” purchases. “On-market” purchases may only be made on a “recognised investment exchange”, which does not include the NYSE, which is the only exchange on which Nielsen-UK’s shares will be traded. In order to purchase its own shares, Nielsen-UK must therefore obtain shareholder approval for “off-market purchases”. This requires that Nielsen-UK shareholders pass an ordinary resolution approving the terms of the contract pursuant to which the purchase(s) are to be made. Such approval may be for a specific purchase or constitute a general authority lasting for up to five years from the date of the resolution, and renewal of such approval for additional five years terms may be sought more frequently. However, shares may only be repurchased out of distributable reserves or, subject to certain exceptions, the proceeds of a fresh issue of shares made for that purpose. An ordinary resolution, authorizing the repurchase of Nielsen-UK shares over the next five years, will be adopted prior to the effective time of the Merger.
TRANSFER OF SHARES
The Articles allow holders of Nielsen-UK Ordinary Shares to transfer all or any of their shares by instrument of transfer in writing in any usual form or in any other form which is permitted by the English Companies Act and is approved by the Nielsen-UK board of directors. The instrument of transfer must be executed by or on behalf of the transferor and (in the case of a transfer of a share which is not fully paid) by or on behalf of the transferee.
Nielsen-UK (at its option) may or may not charge a fee for registering the transfer of a share or for making any other entry in the register. The Nielsen-UK board of directors may, in their absolute discretion, refuse to register a transfer of shares to any person, whether or not it is fully paid, or a share on which Nielsen-UK has a lien. If the Nielsen-UK board of directors refuses to register the transfer of a share, the instrument of transfer must be returned to the transferee as soon as practicable and in any event within two months after the date on which the transfer was lodged with Nielsen-UK with the notice of refusal and reasons for refusal unless they suspect that the proposed transfer may be fraudulent.
The Nielsen-UK board of directors is authorized under the Articles to establish such clearing and settlement procedures for the shares of Nielsen-UK as they deem fit from time to time.
GENERAL MEETINGS AND NOTICES
An annual general meeting will be called by not less than 21 clear days’ notice (i.e., excluding the date of receipt or deemed receipt of the notice and the date of the meeting itself). All other general meetings will be called by not less than 14 clear days’ notice, unless a shorter notice is agreed to by a majority in number of the shareholders having the right to attend and vote at the meeting, being a majority who together hold not less than 95% in nominal value of the shares giving that right. At least seven clear days’ notice is required for any meeting adjourned for 28 days or more or for an indefinite period.
The notice of a general meeting will be given to the shareholders (other than any who, under the provisions of the Articles or the terms of allotment or issue of shares, are not entitled to receive notice), to the Nielsen-UK board of directors, to the
DESCRIPTION OF NIELSEN-UK ORDINARY SHARES
beneficial owners nominated to enjoy information rights under the English Companies Act, and to the auditors. Under English law, Nielsen-UK is required to hold an annual general meeting of shareholders within six months from the day following the end of its fiscal year and, subject to the foregoing, the meeting may be held at a time and place determined by the Nielsen-UK board of directors whether within or outside of the UK.
Under English law, Nielsen-UK must convene a general meeting once it has received requests to do so from shareholders representing at least 5% of the paid up share capital of the company as carries voting rights at general meetings (excluding any paid-up capital held as treasury shares). The directors must call the meeting requested by the shareholders within 21 days from the date on which they became subject to the requirement and the meeting must be held not more than 28 days after the date of the notice convening the meeting.
Quorum. The necessary quorum for a general shareholder meeting is two shareholders entitled to vote present in person or by proxy at the meeting, save that if Nielsen-UK only has one shareholder entitled to attend and vote at the general meeting, one shareholder present in person or by proxy at the meeting and entitled to vote is a quorum. If a meeting is adjourned for lack of quorum, the quorum of the adjourned meeting will be one shareholder present in person or by proxy.
ANNUAL ACCOUNTS AND INDEPENDENT AUDITOR
Under English law, a “quoted company”, which includes a company whose equity share capital is listed on the NYSE, must deliver to the Registrar of Companies a copy of:
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The annual accounts and reports must be presented to the shareholder at a general meeting (although no vote is required in respect of such documents). Copies of the annual accounts and reports must, unless a shareholder agrees to receive more limited information in accordance with the English Companies Act, be sent to shareholders, debenture holders and everyone entitled to receive notice of general meetings at least 21 days before the date of the meeting at which copies of the documents are to be presented. English law allows a company to distribute such documents in electronic form or by means of a website, provided that the company’s articles of association contain provisions to that effect and individual consent has been obtained from each shareholder to receive such documents in electronic form or by means of a website. The Articles provide that such documents may be distributed in electronic form or by means of a website.
Nielsen-UK must appoint an independent auditor to make a report on the annual accounts of the company. The auditor is usually appointed by ordinary resolution at the general meeting of the company at which the company’s annual accounts are laid. Directors can also appoint auditors at any time before the company’s first accounts meeting, after a period of exemption or to fill a casual vacancy.
The remuneration of an auditor is fixed by the members of the company by ordinary resolution or in a manner that the members by ordinary resolution determine.
LIABILITY OF NIELSEN-UK AND ITS DIRECTORS AND OFFICERS
Under English law, any provision that purports to exempt a director of a company (to any extent) from any liability that would otherwise attach to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company is void. See “Comparison of Rights of Shareholders” for a discussion of the limits on an English company’s ability to exempt directors and officers from certain liabilities
DESCRIPTION OF NIELSEN-UK ORDINARY SHARES
Insofar as indemnification of liabilities arising under the Securities Act may be permitted to members of the Nielsen-UK board of directors, officers or persons controlling Nielsen-UK pursuant to the foregoing provisions, Nielsen-UK has been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act, and is therefore unenforceable.
TAKEOVER PROVISIONS
An English public limited company is potentially subject to the UK City Code on Takeovers and Mergers (the “Takeover Code”) if, among other factors, its place of central management and control is within the UK, the Channel Islands or the Isle of Man. The Takeover Panel will generally look to the residency of a company’s directors to determine where it is centrally managed and controlled. The Takeover Panel has confirmed that, based upon Nielsen-UK’s current and intended plans for its directors and management, the Takeover Code (as currently drafted) will not apply to Nielsen-UK. However, it is possible that, in the future, circumstances could change that may cause the Takeover Code to apply to Nielsen-UK.
Comparison of Rights of Shareholders
Currently, your rights as a shareholder of Nielsen-Netherlands are governed by Dutch corporate law and Nielsen-Netherlands’s articles of association. If the Merger is consummated, you will become a member of Nielsen-UK (as shareholders are known in the UK), and your rights will be governed by English corporate law and Nielsen-UK’s Articles.
Many of the principal attributes of Nielsen-Netherlands’s shares and Nielsen-UK’s Ordinary Shares will be similar. However, there are differences between your rights under English corporate law and Dutch corporate law and Nielsen-UK’s proposed articles of association will differ from Nielsen-Netherlands’s articles of association mostly to the extent that English corporate law differs from Dutch corporate law. However, we believe that these differences will not materially impact your rights as a shareholder after the Merger. We have sought to preserve in the articles of association of Nielsen-UK similar material rights and powers of shareholders as those provided under the articles of association of Nielsen-Netherlands. In addition, because shareholders (other than Nielsen-Netherlands) will receive, as consideration in the Merger, one Ordinary Share for each share of Nielsen-Netherlands held immediately prior to the effective time of the Merger and because all of the assets and liabilities of Nielsen-Netherlands will be transferred to Nielsen-UK pursuant to the Merger, we believe that the equity and membership interests of Nielsen-Netherlands shareholders are adequately safeguarded.
The following discussion summarizes the differences in your rights resulting from the Merger. This summary is not complete and does not set forth all of the differences between Dutch and English corporate law or all the differences between Nielsen-Netherlands’s articles of association and Nielsen-UK’s Articles. This summary is subject to the complete text of the relevant provisions of the DCC, Nielsen-Netherlands’s articles of association, the English Companies Act and Nielsen-UK’s Articles. We encourage you to read those laws and documents. Nielsen-UK’s Articles are attached to this proxy statement/prospectus as Schedule 3 to Annex A. For information as to how you can obtain Nielsen-Netherlands’s articles of association, see “Incorporation by Reference.”
CAPITALIZATION
Nielsen-Netherlands.The issued share capital of Nielsen-Netherlands is comprised of 368,056,222 shares as of May 19, 2015 with a par value per share equal to€0.07. In addition, the articles of association of Nielsen-Netherlands provide for the ability to issue preference shares.
Nielsen-UK. Upon completion of the Merger, the issued share capital of Nielsen-UK is expected to comprise:
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Following completion of the Merger, a non-voting bonus share will also be issued. The non-voting bonus share will be issued with a share premium. Nielsen-UK will then undertake a court-approved procedure to cancel such share and the related share
COMPARISON OF RIGHTS OF SHAREHOLDERS
premium pursuant to the reduction of capital to be undertaken for the purposes of creating distributable reserves in Nielsen-UK. See “Proposals Relating to the Merger – Capital Reduction” for further information. Accordingly, the only classes of share outstanding following the reduction of capital will be the Nielsen-UK Ordinary Shares.
Unlike the articles of association of Nielsen-Netherlands, the Articles of Nielsen-UK do not provide an express right to issue preference shares.
INCREASE IN SHARE CAPITAL
Nielsen-Netherlands.
Issue of Shares. Under the DCC, a decision to increase the share capital is taken by means of resolution passed by the general meeting of shareholders, unless another corporate body has been designated by the general meeting of shareholders to do so. A designation as referred to above is only valid for a specific period of no more than five years and may from time to time be extended for a period of no more than five years. The general meeting of shareholders has irrevocably and exclusively designated the board of directors of Nielsen-Netherlands as the corporate body competent to issue shares and grant rights to subscribe for shares up to the amount of the authorized share capital of Nielsen-Netherlands and to determine the price and further terms and conditions of such share issue for a period of five years expiring May 8, 2017.
Authorized share capital increase.Under the DCC, the general meeting of shareholders may, by amending the articles of association, increase the authorized share capital.
Nielsen-UK.
Issue of Shares. The rules applicable to Nielsen-UK with respect to the increase in share capital are similar to those applicable to Nielsen-Netherlands under the DCC. Under the English Companies Act, the issued share capital of Nielsen-UK may only be increased if the board of directors of Nielsen-UK is authorized to allot and issue further shares either by an ordinary resolution (i.e. a majority of the votes cast) of the shareholders of Nielsen-UK in a general meeting or by the Articles. Any such authorization must specify the maximum amount of shares which the board of directors is authorized to issue and can last for a maximum of five years.
In line with Nielsen-Netherlands’s articles of association, the Articles of Nielsen-UK provide that the board of directors is authorized, for a period of up to five years from the date on which the resolution granting such authorization is passed, to allot equity securities, or to grant rights to subscribe for or to convert or exchange any security into shares of Nielsen-UK, up to an aggregate nominal amount of€91 million and any such issuances will not grant existing shareholders preemptive rights in respect of such issuances. See “– Preemptive Rights and Preferential Subscription Rights” below. Unlike under the DCC, Nielsen-UK may, before the expiration of such authority, make an offer or agreement, which would require Nielsen-UK shares to be allotted (or rights to be granted) after such expiration, and the board of directors may allot shares or grant rights in pursuance of such an offer or agreement as if its authority had not expired.
Authorized share capital.English law no longer has the concept of “authorized” share capital like Dutch law. Instead, all shares in Nielsen-UK must be “issued” i.e. held by the shareholders of Nielsen-UK and will accordingly form part of Nielsen-UK’s “issued share capital.” All issued shares must have been authorized for issue but there is no separate class of shares called “authorized share capital.”
PREEMPTIVE RIGHTS AND PREFERENTIAL SUBSCRIPTION RIGHTS
Nielsen-Netherlands.Under the articles of association of Nielsen-Netherlands, existing holders of common shares have pre-emptive rights in respect of future issuances of common shares in proportion to the number of common shares held by them, unless limited or excluded as described below. Holders of cumulative preference shares do not have pre-emptive rights in respect of any future issuances of share capital (Nielsen-Netherlands does not have any cumulative preference shares currently outstanding). Pre-emptive rights do not apply with respect to common shares issued for non-cash consideration or with respect to common shares issued to employees or shares issued pursuant to the exercise of share options or similar
COMPARISON OF RIGHTS OF SHAREHOLDERS
rights to subscribe for shares which were previously granted. Under the articles of association of Nielsen-Netherlands, the board of directors has the irrevocable power to limit or exclude any pre-emptive rights to which shareholders may be entitled, provided that it has been authorized by the general meeting of shareholders to do so. The authority of the board of directors to limit or exclude pre-emptive rights can only be exercised if at that time the authority of the board to issue shares is in full force and effect as described above. The authority to limit or exclude pre-emptive rights may be extended in the same manner as the authority to issue shares. If there is no designation of the board of directors to limit or exclude pre-emptive rights in force, the shareholders are able to limit or exclude such pre-emptive rights at a general meeting of shareholders.
As a matter of Dutch law, resolutions of the general meeting of shareholders (i) to limit or exclude pre-emptive rights or (ii) to designate the board of directors as the corporate body that has authority to limit or exclude pre-emptive rights, require an ordinary majority of those present or validly represented at the relevant meeting except that at least a two-thirds majority of the votes cast in a meeting of shareholders is required if less than 50% of the issued share capital is present or represented at the relevant meeting. The rules relating to issuances of shares and pre-emptive rights as described above apply equally to the granting of rights to subscribe for shares, such as options and warrants, but not the issue of shares upon exercise of such rights.
As described under “– Increase in Share Capital – Nielsen-Netherlands – Issue of Shares” above, the authority to limit or exclude pre-emptive rights in connection with the issuance of common shares or rights to subscribe for shares was irrevocably delegated to the board of directors for a period of five years expiring May 8, 2017.
Nielsen-UK. Under the English Companies Act, the issuance of “equity securities” by Nielsen-UK that are to be paid for wholly in cash (except shares held under an employees’ share scheme) must be offered first to the existing equity shareholders in proportion to the respective nominal values of their holdings on the same or more favorable terms, unless a special resolution (i.e. a resolution approved by the holders of at least 75% of the aggregate voting power of the outstanding Nielsen-UK Ordinary Shares that, being entitled to vote, vote on the resolution) to the contrary has been passed in a general meeting of shareholders.
In this context, “equity securities” generally includes the Ordinary Shares or rights to subscriber for or to convert securities into Ordinary Shares.
Similar to Dutch law, English law permits a company’s shareholders by special resolution or a provision in a company’s articles of association to exclude preemptive rights for a period of up to five years. In line with the articles of association of Nielsen-Netherlands, the Articles of Nielsen-UK will provide that the directors are authorized, for a period of up to five years from the date of the shareholder resolution granting such authorization, to (i) allot shares in Nielsen-UK, or to grant rights to subscribe for or to convert or exchange any security into shares in Nielsen-UK up to an aggregate nominal amount (i.e., par value) of€91 million and (ii) exclude preemptive rights in respect of such issuances for the same period of time. Such authorization will continue for five years and renewal of such authorization is expected to be sought at least once every five years, and possibly more frequently.
Additionally, similar to Dutch law, statutory preemptive rights under English law generally do not apply to:
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DISTRIBUTIONS AND DIVIDENDS
Nielsen-Netherlands. The general meeting of stockholders may resolve, on the proposal of the board of directors, to distribute dividends or reserves, wholly or partially, in the form of common shares. Subject to certain exceptions, dividends may only be paid out of profits as shown in our annual financial statements as adopted by the general meeting of stockholders. Distributions may not be made if the distribution would reduce stockholders’ equity below the sum of the paid-up and called up capital and any reserves required by Dutch law or the articles of association. The board may also resolve on the distribution of an interim dividend provided the amount of such interim distribution does not exceed an amount equal to the amount of equity exceeding the issued share capital plus the mandatory reserves.
Distributions that have not been collected within five years after they have become due and payable will revert to the company.
COMPARISON OF RIGHTS OF SHAREHOLDERS
The ability of Nielsen-Netherlands to pay dividends may be limited by covenants of any existing and future outstanding indebtedness that it or its subsidiaries incur. Whether or not dividends are paid depends on, among other things, its results of operations, financial condition, level of indebtedness, cash requirements, contractual restrictions and other factors that the board of directors may deem relevant. Profits will be available to be distributed as dividends only if and to the extent the board of directors decides not to allocate profits to the reserves of the company.
Nielsen-UK.Under English law, dividends may only be paid out of Nielsen-UK’s distributable profits or distributable reserves and not out of share capital, which includes share premiums (which are the excess of the consideration for the issuance of shares over the aggregate nominal amount of such shares).
A reserve arising from a court-approved reduction of capital is included in distributable profit unless the court orders otherwise. A reduction of capital may therefore be used to (i) increase existing distributable reserves and/or (ii) reduce or eliminate accumulated realized losses to enable a company to make a dividend.
In addition, the English Companies Act does not permit Nielsen-UK to make a dividend:
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Whether a dividend can be paid must be justified by reference to Nielsen-UK’s “relevant accounts” (which must be its individual accounts (i.e., separate stand-alone statutory accounts)). These will usually be the most recent annual accounts, but may, in certain circumstances, be the company’s interim accounts.
The Articles permit the shareholders, by ordinary resolution, to declare final dividends. A declaration must not be made unless the directors have first made a recommendation as to the amount of the dividend. The dividend must not exceed that amount. In addition, the directors may declare and pay interim dividends.
Nielsen-UK intends to continue paying quarterly dividends in accordance with the dividend policy adopted by Nielsen-Netherlands subject to the completion of the court-approved reduction of capital process.
PURCHASE AND REDEMPTION OF OWN SHARES
Nielsen-Netherlands. As a matter of Dutch law, a public company with limited liability (naamloze vennootschap) may acquire its own shares, subject to certain provisions of Dutch law and the articles of association, if (A) the acquisition is made for no consideration or (B)(i) the company’s stockholders’ equity less the payment required to make the acquisition does not fall below the sum of paid and called up part of its capital and any reserves required to be maintained by Dutch law or the articles of association and (ii) in the case of listed companies, after the acquisition of shares, the company and its subsidiaries would not hold, or hold as pledgees, shares having an aggregate par value that exceeds 50% of the company’s issued share capital. Nielsen-Netherlands may only acquire its own shares if the general meeting of stockholders so resolves or resolves to grant the board of directors the authority to effect such acquisition, which authority can be delegated to the board of directors for a maximum period of 18 months. Shareholders of Nielsen-Netherlands have delegated such authority to the board of directors at each of its annual meetings.
If Nielsen-Netherlands repurchases any of its shares, no votes may be cast at a general meeting of stockholders on the treasury shares held by it or its subsidiaries. Nonetheless, the holders of a right of usufruct and the holders of a right of pledge in respect of shares held by it or its subsidiaries are not excluded from the right to vote on such shares, if the right of usufruct or the right of pledge was granted prior to the time such shares were acquired by Nielsen-Netherlands or any of its subsidiaries. Neither Nielsen-Netherlands nor any of its subsidiaries may cast votes in respect of a share on which it or such subsidiary holds a right of usufruct or a right of pledge.
Nielsen-UK.The English Companies Act limits a company’s ability to hold or repurchase its own shares. Because Nielsen-UK is expected to be listed on the NYSE, Nielsen-UK is expected to be permitted to purchase its own shares by way of an “off market purchase”. This will require that Nielsen-UK shareholders pass an ordinary resolution approving the terms of the contract pursuant to which the purchase(s) are to be made. Such approval may be for a specific purchase or constitute a general authority lasting for up to five years from the date of the resolution, and renewal of such approval for additional five year terms may be sought more frequently.
COMPARISON OF RIGHTS OF SHAREHOLDERS
Nielsen-UK may only fund the purchase of its own shares out of distributable reserves or the proceeds of a new issue of shares made expressly for that purpose. If any premium above the nominal value of the purchased shares is paid, it must be paid out of distributable reserves.
Any shares purchased by Nielsen-UK out of distributable reserves may be held as treasury shares. As is the case with Nielsen-Netherlands, the Nielsen-UK board of directors will have the authority to repurchase shares within designated parameters in accordance with English law.
REDUCTION OF CAPITAL
Nielsen-Netherlands.Subject to Dutch law and the articles of association, our stockholders may resolve to reduce the outstanding share capital at a general meeting of stockholders by cancelling shares or by reducing the nominal value of the shares. In either case, this reduction would be subject to applicable statutory provisions. In order to be approved, a resolution to reduce the capital requires approval of a majority of the votes cast at a meeting of stockholders if at least half the issued capital is present or represented at the meeting or at least a two-thirds majority of the votes cast in a meeting of stockholders, if less than 50% of the issued share capital is present or represented. A resolution that would result in the reduction of capital requires prior or simultaneous approval of the meeting of each group of holders of shares of the same class whose shares are subject by the reduction. A resolution to reduce capital requires notice to the creditors of the company who have the right to object to the reduction in capital under specified circumstances.
Nielsen-UK.An English company may choose to reduce its share capital so that, to the extent of the capital reduced, it may create distributable reserves for the payment of a dividend or to return surplus capital to shareholders.
Under the English Companies Act, a public company can only effect a reduction of capital with approval from an English court. Prior to the court process, the reduction must first be approved by a special resolution of shareholders in general meeting (i.e., a resolution approved by the holders of at least 75% of the aggregate voting power of the outstanding Nielsen-UK Ordinary Shares that, being entitled to vote, vote on the resolution). If the resolution is approved, the reduction must be approved by a court.
SHAREHOLDER APPROVAL OF TAKEOVERS AND CERTAIN TRANSACTIONS
Nielsen-Netherlands.Under Dutch law, the approval of our general meeting of stockholders by ordinary majority of those present or validly represented is required for any significant change in the identity or nature of the company or business of Nielsen-Netherlands, including in the case of (i) a transfer of all or substantially all of its business to a third party, (ii) the entry into or termination by it or one of its subsidiaries of a significant long-term cooperation with another entity, or (iii) the acquisition or divestment by it or one of its subsidiaries of a participating interest in the capital of a company having a value of at least one-third of the amount of our assets, as stated in our consolidated balance sheet in our latest adopted annual accounts.
Nielsen-UK. There is no concept of a statutory merger under English law except where an English company merges with another company based in the European Economic Area. European and English legislation provide for statutory mergers between English companies and companies based in the European Economic Area (of which the U.K. forms part). There is no statutory merger regime for mergers between an English company and a company based outside of the European Economic Area but English law nevertheless allows for the transfer of all assets and liabilities in accordance with an agreement (such as the Merger Proposal). Takeovers of English companies are however generally effected by way of a takeover offer or scheme of arrangement as opposed to a merger.
Application of the Takeover Code.The principal regulations that deal with the conduct of takeovers for English companies are set out in the Takeover Code. An English public limited company is potentially subject to the Takeover Code if, among other factors, its place of central management and control is within the UK, the Channel Islands or the Isle of Man. The Takeover Panel will generally look to the residency of a company’s directors to determine where it is centrally managed and controlled. The Takeover Panel has confirmed that, based upon Nielsen-UK’s current and intended plans for its directors and management, the Takeover Code (as currently drafted) will not apply to Nielsen-UK. It is possible that, in the future, circumstances could change that may cause the Takeover Code to apply to Nielsen-UK.
COMPARISON OF RIGHTS OF SHAREHOLDERS
Application of U.S. federal tender offer rules.As would be the case for a takeover offer made for Nielsen-Netherlands, a takeover offer made for Nielsen-UK would be subject to the U.S. federal tender offer rules.
Shareholder Approval.Under English law and subject to applicable U.S. securities laws and NYSE rules and regulations, where Nielsen-UK proposes to acquire another company, approval of Nielsen-UK’s shareholders is not required although there may be other aspects of the transaction that require shareholder approval (for example a share capital increase).
As with the articles of association of Nielsen-Netherlands, the Articles of Nielsen-UK specifically provide that the following matters are subject to the approval of members in a general meeting: (i) a transfer of all or substantially all of Nielsen-UK’s business to a third party, (ii) the entry into or termination by Nielsen-UK or one of its subsidiaries of a significant long-term cooperation with another entity, or (iii) the acquisition or divestment by Nielsen-UK or one of its subsidiaries of a participating interest in the capital of a company having a value of at least one-third of the amount of Nielsen-UK’s assets, as stated in its consolidated balance sheet in its latest adopted annual accounts.
RELATED PARTY TRANSACTIONS
Nielsen-Netherlands. Under the DCC, directors cannot participate in the decision making regarding matters in which they have a direct or indirect personal interest that conflicts with the interest of the company.
Nielsen-UK.Similar to the DCC, under English law, certain transactions between a director, certain parties connected with that director and a related company of which he or she is a director are prohibited unless approved by the shareholders, such as loans, credit transactions and substantial property transactions.
APPRAISAL OR WITHDRAWAL RIGHTS AND COMPULSORY ACQUISITIONS
Nielsen-Netherlands.In addition to the appraisal or withdrawal rights available under Dutch law to shareholders in the context of a cross-border legal merger as set out in “Proposals Relating to the Merger”, a stockholder who (together with members of its group, as such term is defined under Dutch law) for its own account holds at least 95% of a company’s issued capital may institute proceedings against the company’s other stockholders jointly for the transfer of their shares to the claimant. The proceedings are held before the Dutch Enterprise Chamber and are instituted by means of a writ of summons served upon the minority stockholders in accordance with the provisions of the DCC. The Dutch Enterprise Chamber may grant the claim for the squeeze-out in relation to all minority stockholders and will determine the price to be paid for the shares, if necessary after appointment of one or three experts who will offer an opinion to the Dutch Enterprise Chamber on the value of the shares. Once the order to transfer has become final, the acquiror must give written notice of the price, and the date on which and the place where the price is payable to the minority stockholders whose addresses are known to it. Unless all addresses are known to the acquiror, it will also publish the same in a Dutch daily newspaper with nationwide distribution in the Netherlands.
Nielsen-UK. English law does not provide for “appraisal rights” similar to those rights under Dutch law (other than in connection with the Takeover Code which does not apply to Nielsen-UK), but the English Companies Act provides for dissenter’s rights which permit a shareholder to object to a court in the context of the compulsory acquisition of minority shares pursuant to the statutory squeeze-out procedure contained in the English Companies Act.
APPOINTMENT OF DIRECTORS
Nielsen-Netherlands.Members of our board of directors are appointed by our general meeting of stockholders by an absolute majority of votes cast from a list of nominees prepared by the incumbent board of directors. The general meeting of stockholders may at all times also appoint directors without such prior binding nomination of the board of directors by a resolution passed with a two-thirds majority of the votes cast representing more than one-half of the issued capital.
COMPARISON OF RIGHTS OF SHAREHOLDERS
Nielsen-UK.
Election of directors. Directors are appointed by one of the following methods: (1) by ordinary resolution of the shareholders; (2) at a general meeting called in order to appoint directors where there are fewer than two directors of Nielsen-UK; or (3) by a decision of the directors.
Directors that are proposed to be elected at a shareholder meeting (i.e., pursuant to methods (1) and (2) described above) must be elected individually pursuant to separate proposals at the meeting; more than one director cannot be elected under the same shareholder proposal.
The Articles of Nielsen-UK provide for a director appointed by the board of directors (i.e., pursuant to method (3) described above) to retire at the conclusion of the next annual general meeting after his appointment unless he is reappointed during that meeting.
REMOVAL OF DIRECTORS
Nielsen-Netherlands. The members of our board of directors may be suspended or dismissed at any time at the general meeting of stockholders. If a resolution to so suspend or dismiss a director is proposed by the board, such resolution may be adopted by an absolute majority of the votes validly cast. If no such proposal is made by the board, then a director may be suspended or dismissed by the general meeting by at least a two-thirds majority of the votes cast, provided such majority represents more than half of the issued share capital of Nielsen-Netherlands.
Nielsen-UK.Similar to Dutch law, pursuant to the English Companies Act, shareholders can remove directors by passing an ordinary resolution (i.e., passed with a majority of votes cast). Such a resolution to remove a director requires “special notice” under the English Companies Act. Broadly, “special notice” requires that Nielsen-UK be given notice by the proposing shareholder of the removal resolution at least 28 days prior to the meeting at which the removal resolution is to be proposed. Nielsen-UK must then give notice to its shareholders at the same time as it gives notice of the relevant meeting to its shareholders or, if this is not practical (i.e., because notice of the meeting has already been given) Nielsen-UK must give at least 14 days’ notice of the removal resolution to its shareholders.
The English Companies Act allows the inclusion in a company’s articles of association of an additional removal process, such as one that does not require “special notice”. The Articles permit the removal of a director by ordinary resolution without the need for a “special notice” and to appoint, by ordinary resolution, a person to replace him.
DIRECTORS’ DUTIES
Nielsen-Netherlands. Each director will owe a duty to us to properly perform the duties assigned to him or her and to act in the corporate interest of our Company. Under Dutch law, the corporate interest extends to the interest of all corporate stakeholders, such as stockholders, creditors, employees, customers and suppliers. Our directors are expected to be appointed for one year and will be re-electable each year at the annual general meeting of shareholders.
Nielsen-UK.The English Companies Act codified many of the pre-existing common law and fiduciary duties that had previously existed in relation to directors under English law and imposes the following statutory director duties on directors of UK companies:
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The above duties apply to all directors of an English company in all contexts, including in relation to takeovers, business combinations and other corporate transactions.
INDEMNIFICATION OF DIRECTORS AND OFFICERS AND INSURANCE
Nielsen-Netherlands. Unless prohibited by law in a particular circumstance, the articles of association require Nielsen-Netherlands to reimburse the officers and members of the board of directors and the former officers and members of the board of directors for damages and various costs and expenses related to claims brought against them in connection with the exercise of their duties. However, Nielsen-Netherlands is not obligated to provide indemnification (i) if a Dutch court has established in a final and conclusive decision that the act or failure to act of the person concerned may be characterized as willful (opzettelijk), intentionally reckless (bewust roekeloos) or seriously culpable (ernstig verwijtbaar) conduct, unless Dutch law provides otherwise or this would, in view of the circumstances of the case, be unacceptable according to standards of reasonableness and fairness, (ii) for any action initiated by the indemnitee, other than actions brought to establish a right to indemnification or the advancement of expenses or actions authorized by the board of directors or (iii) for any expenses incurred by an indemnitee with respect to any action instituted by the indemnitee to interpret the indemnification provisions, unless the indemnitee is successful or the court finds that indemnitee is entitled to indemnification.
Nielsen-Netherlands has entered into indemnification agreements with the members of the board of directors to provide for further details on these matters. Nielsen-Netherlands has purchased directors’ and officers’ liability insurance for the members of the board of directors and certain other officers. Insofar as indemnification of liabilities arising under the Securities Act may be permitted to members of the board of directors, officers or persons controlling Nielsen-Netherlands to the foregoing provisions, Nielsen-Netherlands has been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Nielsen-UK. The Articles enable Nielsen-UK to indemnify the directors and officers of Nielsen-UK and to advance expenses to defend claims against directors and officers to the full extent of English law. Subject to exceptions described below, English law does not permit a company to exempt a director or certain officers from, or indemnify him or her against, liability in connection with any negligence, default, breach of duty or breach of trust by him or her in relation to the company. Indemnification is permitted for liabilities incurred in proceedings in which judgment is entered in favor of the director or officer and the director or officer is acquitted, or the director or officer is held liable, but the court finds that he or she acted honestly or reasonably and the relief should be granted.
The exceptions under the English Companies Act allow a company to (and the Articles provide that Nielsen-UK may):
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SHAREHOLDERS’ SUITS
Nielsen-Netherlands.Generally, only a company can bring a civil action against a third party against whom such company alleges wrongdoing, including the directors and officers of such company. A stockholder will have an individual right of action against such a third party only if the tortious act also constitutes a tortious act directly against such stockholder. The DCC provides for the possibility to initiate such actions collectively. A foundation or an association whose objective is to protect the rights of a group of persons having similar interests may institute a collective action. The collective action cannot result in an order for payment of monetary damages but may result in a declaratory judgment. The foundation or association and the defendant are permitted to reach (often on the basis of such declaratory judgment) a settlement which provides for monetary compensation for damages. The Dutch Enterprise Chamber may declare the settlement agreement binding upon all the injured parties with an opt-out choice for individual injured parties which can be exercised, within a period of no less than three months as set by the Dutch Enterprise Chamber.
Nielsen-UK. Under the English Companies Act, shareholders are entitled to bring a derivative claim to seek relief on behalf of the company against the actions of a director of the company. The cause of action for a derivative claim must be vested in the company and claims may only be brought in respect of actual or proposed acts or omissions including negligence, default, breach of duty or breach of trust by a director of the company. The onus to provide evidence to make out a prima facie case for the derivative claim is on the shareholder seeking permission to continue the claim.
The English Companies Act also permits shareholders to apply for a court order:
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GENERAL MEETINGS OF SHAREHOLDERS
Nielsen-Netherlands. A general meeting of stockholders shall be held once a year within the periods required under Dutch law and the NYSE listing rules to convene a general meeting of stockholders. Pursuant to the articles of association of Nielsen-Netherlands, the company is required to hold an annual general meeting within six months of the close of the financial year. Extraordinary general meetings of stockholders may be held as frequently as they are called by the board of directors, or whenever one or more stockholders collectively representing at least 10% of the issued capital so request the board of directors in writing and submit the necessary court petition. Public notice of a general meeting of stockholders or an extraordinary meeting of stockholders must be given by the board of directors in accordance with Dutch law, the regulations of the NYSE, where the common shares of Nielsen-Netherlands are officially listed, and the rules and regulations of the SEC.
All stockholders are entitled to attend the general meetings of stockholders, to address the general meeting of stockholders and to vote, either in person or by appointing a proxy to act for them. The same applies to every pledge and usufructuary who holds voting rights on shares of Nielsen-Netherlands. Our board of directors may determine that, in order to exercise the right to attend the general meetings of stockholders, to address the general meeting of stockholders and/or to vote at the general meetings of stockholders, stockholders must notify the Company in writing through the Company’s transfer agent of their intention to do so, no later than on the day and at the place mentioned in the notice convening the meeting.
Our board may determine that stockholders may attend and address the general meeting, participate in the deliberations and exercise voting rights electronically, and the board may set reasonable conditions for the use of such electronic means of communication.
Nielsen-UK.An annual general meeting of members shall be held once a year within the periods required under English law and the NYSE listing rules to convene a general meeting of members. Pursuant to the English Companies Act, Nielsen-UK is required to hold an annual general meeting within six months of the day following the end of its fiscal year. The notice
COMPARISON OF RIGHTS OF SHAREHOLDERS
required for an annual general meeting is 21 clear days unless a majority in number of those entitled to attend and vote at the meeting, being a majority who together hold not less than 95% in nominal value of the shares giving that right, agree to accept shorter notice. For the purposes of giving notice, “clear days” means calendar days between (and excluding) deemed receipt of the notice and the date of the meeting itself. It is anticipated that the annual general meetings of Nielsen-UK will continue to be used for the purpose, among other things, of approving the annual financial statements and the annual business report.
Under the English Companies Act, a general meeting (other than the annual general meeting) may be convened by the board of directors of a company or by shareholder(s) representing at least 5% of the paid-up capital of a company carrying voting rights (excluding any paid-up capital held as treasury shares) or in certain circumstances, the auditor of the company. The Articles provide that shareholders be given at least 14 clear days’ notice of general meetings (other than the annual general meeting) unless a majority in number of those entitled to attend and vote at the meeting, being a majority who together hold not less than 95% in nominal value of the shares giving that right, agree to accept shorter notice.
VOTING RIGHTS
Nielsen-Netherlands.Each share of common stock confers the right to cast one vote at the general meeting of stockholders. Blank votes and invalid votes shall be regarded as not having been cast. Resolutions proposed to the general meeting of stockholders by the board of directors are adopted by a simple majority of votes cast, unless another majority of votes or quorum is required by virtue of Dutch law or our articles of association.
Nielsen-UK. At a poll taken at a meeting, every qualifying shareholder present and entitled to vote on the resolution has one vote for every Nielsen-UK Ordinary Share of which he or she is the holder.
An “ordinary resolution” requires, on a poll, the affirmative vote of a simple majority of the total voting rights of those who (being entitled to do so) vote in person or by proxy.
A “special resolution” requires, on a poll, the affirmative vote of the holders of at least 75% of the total voting rights of those who (being entitled to do so) vote in person or by proxy.
The English Companies Act requires that a number of matters are approved by way of special resolution, including (amongst other things) an amendment to the company’s articles of association, change of name, and re-registration as a public or private company.
LIQUIDATION
Nielsen-Netherlands. The Company may be dissolved only by the stockholders at a general meeting of stockholders, upon the proposal of the board of directors. The liquidation of the Company may be carried out by the board of directors, if and to the extent the stockholders have not appointed one or more liquidators at the general meeting of stockholders. The remuneration of the liquidators, if any, will be determined by the general meeting of stockholders. Any surplus arising out of liquidation, after the settlement of all claims of all creditors, will be distributed to shareholders in proportion to the paid-up par value of shares held, with due regard to the preferential rights of individual classes of shares, and subject to Dutch withholding tax requirements.
Nielsen-UK. The liquidation of an English company is a statutory process governed by the Insolvency Act 1986, where assets of the company are realized for the benefit of creditors or shareholders and the company is dissolved. Liquidation may be voluntary, where it is initiated by shareholders, or compulsory, where it is typically initiated by creditors and approved by the court. There are two types of voluntary liquidation: a members’ voluntary liquidation and a creditors’ voluntary liquidation; each is instigated by the special resolution of the shareholders and cannot be initiated by creditors directly. The essential difference is that a members’ voluntary liquidation applies to solvent companies and a creditors’ insolvent liquidation to insolvent companies. Accordingly, voluntary liquidation is not always an insolvency procedure. In all cases, a liquidator is appointed to collect in the assets of the company and distribute them in the order prescribed by the Insolvency Act 1986 to satisfy any charges, secured and unsecured creditors and the expenses of the liquidation. If there are any surplus funds available after these liabilities have been satisfied in full, they will be divided amongst shareholders in proportion to their existing shareholdings.
COMPARISON OF RIGHTS OF SHAREHOLDERS
ENFORCEMENT OF JUDGMENTS
Nielsen-Netherlands. The Netherlands and the U.S. do not have a treaty providing for reciprocal recognition and enforcement of judgments in civil and commercial matters. The recognition and enforcement of a judgment of the courts of the U.S. in the Netherlands is governed by the principles set forth in the Dutch statute of civil procedure. This statute provides in principle that a judgment rendered by a non-Dutch court may not be enforced in the Netherlands. Nevertheless, Dutch Courts may give force to such non-Dutch judgment without reviewing it on the merits if (i) litigants have submitted themselves to the jurisdiction of such court explicitly through their choice of competent court or implicitly by cooperating with the court procedures and (ii) the court procedures and the service of documents leading to the judgment were in accordance with the due process of law.
Nielsen-UK. There are no arrangements in place between the U.K. and the U.S. relating to the reciprocal enforcement of judgments. U.S. judgments must therefore be enforced at common law and by instituting fresh legal proceedings in England and Wales. In broad terms, for a foreign judgment to be recognized by courts in England and Wales:
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It may therefore be more difficult (or impossible) to bring some types of claims against an English company. Further, a judgment may be impeached by showing that:
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A criminal judgment in a U.S. court under U.S. federal securities laws may not be enforceable in the English courts on public policy grounds and a prosecution brought before the English courts under U.S. federal securities laws may also not be permitted on public policy grounds.
Amendment of the Articles of Association in Connection with the Merger
In anticipation of the Merger, the Board of Directors proposes to amend the articles of association of the Company and add a new article 29 (Withdrawal right and criterion based on section 2:333h of the DCC).
On February 19, 2015, the boards of directors of Nielsen-Netherlands and Nielsen-UK unanimously approved the form of Merger Proposal, according to which (i) Nielsen-Netherlands will cease to exist, (ii) Nielsen-UK will obtain the assets and liabilities of the Company under universal title of law and (iii) shareholders of Nielsen-Netherlands are entitled to Ordinary Shares at an exchange ratio of one newly issued Ordinary Share for one share in the capital of Nielsen-Netherlands.
If the Annual Meeting approves the Merger, any shareholder of Nielsen-Netherlands that voted against such proposal has the right to elect not to become a shareholder of Nielsen-UK and file a request for compensation with Nielsen-Netherlands in accordance with the DCC within one month after the Annual Meeting. A withdrawing shareholder can only make use of the withdrawal right in respect of the shares in Nielsen-Netherlands that such shareholder (i) held at the record date of the Annual Meeting and for which such shareholder voted against the Merger and (ii) still holds at the time of submitting the withdrawal application and at the effective time of the Merger. Upon the Merger taking effect, the withdrawing shareholder will not receive Ordinary Shares. Instead, such withdrawing shareholder will receive cash compensation (net of any Dutch dividend withholding tax that is required to be withheld by law) for the common shares in Nielsen-Netherlands for which it duly exercised his withdrawal right and such shares of Nielsen-Netherlands shall cease to exist as a consequence of the Merger taking effect.
This proposed amendment provides for the inclusion of a criterion referred to in the DCC under which the amount of compensation to shareholders of Nielsen-Netherlands who elect to exercise their withdrawal right can be established objectively. The criterion is such that, if possible, the amount of compensation corresponds to the value of the shares in Nielsen-Netherlands at the time of the entry into force of the Merger, so that shareholders of Nielsen-Netherlands are treated equally as much as possible, regardless of whether they voted in favor or against the Merger.
Depending on the number of shares in respect of which a request to be compensated is filed, the amount of compensation per share in Nielsen-Netherlands shall be determined on the basis of (i) the average closing price of a share in Nielsen-Netherlands provided on a daily basis by the New York Stock Exchange over a period of twenty trading days prior to the effective time of the Merger or (ii) the cash proceeds realized by Nielsen-Netherlands from an offering of such number of newly issued shares in Nielsen-Netherlands equal to the number of shares in respect of which a request to be compensated is filed. If the compensation is determined in the manner set out under (ii), the costs and expenses of such offering, consisting of the registration and underwriting fees and other fees, costs and expenses primarily related to such offering, shall be deducted from the proceeds and aggregate amount of compensation. On payments of cash compensation, dividend withholding tax of 15% will generally be withheld if and to the extent that such payments exceed the average capital recognized as paid-up on the relevant shares for Dutch dividend withholding tax purposes. See “Proposals Relating to the Merger – Withdrawal Rights.”
The affirmative vote of a majority of the votes cast at the Annual Meeting is required to (i) amend our articles of association and (ii) authorize any and all lawyers and (deputy) civil law notaries practicing at Clifford Chance, LLP, Amsterdam, the Netherlands, to execute the notarial deed of amendment of the articles of association to effect the aforementioned amendment of the articles of association.
If this proposal is adopted by a simple majority of the votes cast, the changes will be implemented with immediate effect during a suspension of the Annual Meeting and prior to the proposal to vote on the Merger. The Company will not proceed with the vote of Proposal No. 2 if Proposal No. 1 is not approved by the requisite vote of shareholders.
PROPOSAL NO. 1 – AMENDMENT OF THE ARTICLES OF ASSOCIATION IN CONNECTION WITH THE MERGER
The full text of the proposed amendment is provided below:
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Approval of the Merger
The boards of directors of Nielsen-Netherlands and Nielsen-UK have unanimously approved the Merger Proposal, according to which (i) Nielsen-Netherlands will cease to exist, (ii) Nielsen-UK will obtain the assets and liabilities of the Company under universal title of law and (iii) shareholders of Nielsen-Netherlands are entitled to Ordinary Shares at an exchange ratio of one newly issued Ordinary Share for one share in the capital of Nielsen-Netherlands.
The Merger will result in Nielsen-UK becoming the publicly traded parent of the Nielsen group and thereby effectively change the place of incorporation of our publicly-traded parent company from the Netherlands to England and Wales. Nielsen-UK will continue to conduct, through its subsidiaries, the same businesses as conducted by Nielsen-Netherlands before the Merger.
If the Merger is approved by the requisite vote of our shareholders, and the other conditions to closing are satisfied, we will request a Dutch civil law notary (notaris) to issue a certificate attesting that Nielsen-Netherlands has observed all procedural rules in respect of all the required resolutions and that all pre-merger formalities under Dutch law have been complied with. In addition, we will request the issuance of an order by the UK High Court certifying that Nielsen-UK has completed properly the pre-merger acts and formalities in accordance with The Companies (Cross-Border Mergers) Regulations 2007 (the “UK Regulations”). Following this, a joint application will be submitted to the UK High Court by Nielsen-UK and Nielsen-Netherlands for the issuance of an order approving the completion of the Merger. The Merger will be effected not less than 21 days after the date of such order, which is currently expected to be in the third quarter of 2015.
The affirmative vote of the majority of the votes cast at the Annual Meeting is required to approve the Merger if at least 50% of the issued share capital is represented (either in person or by proxy) at the meeting. If less than 50% of the issued share capital is represented, a majority of 2/3 of votes cast is required.
See “Proposals Relating to the Merger” for more information about the Merger.
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Other Annual Meeting Proposals
We are also seeking approval of annual meeting proposals (Proposals 3 – 9) either because they are required under applicable Dutch or U.S. laws or because they are relevant for as long as Nielsen-Netherlands continues to be our parent company. TOC
Adoption of Dutch Annual Accounts for 2014
At the Annual Meeting, you will be asked to (a) adopt our Dutch statutory annual accounts required under Dutch law and our articles of association (the “Dutch Annual Accounts”) for the year ended December 31, 2014 and (b) authorize the preparation of our Dutch Annual Accounts and the annual report of the Board of Directors as required by Dutch law (the “Dutch Annual Report”) for the year ending December 31, 2015 in the English language.
Our Dutch Annual Accounts are prepared in accordance with the International Financial Reporting Standards, as adopted by the European Union (IFRS), and Dutch law. The Dutch Annual Report for the year ended December 31, 2014 contains information included in our annual report on Form 10-K and other information required by Dutch law. Our Dutch Annual Report and Dutch Annual Accounts, in each case for the year ended December 31, 2014, can be accessed through our website,www.nielsen.com, and may be obtained free of charge by request to our office at Diemerhof 2, 1112 XL Diemen, the Netherlands and at our offices at 40 Danbury Road, Wilton, Connecticut 06897, United States of America.
The affirmative vote of the majority of the votes cast at the Annual Meeting is required to adopt our Dutch Annual Accounts for the year ended December 31, 2014 and to authorize the preparation of our Dutch Annual Accounts and Dutch Annual Report for the year ending December 31, 2015 in the English language.
In the event Proposal No. 2 is approved by the requisite vote of our shareholders and Nielsen-UK becomes the publicly-traded company of the Nielsen group before the end of 2015, we will not be required to prepare Dutch Annual Accounts for the year ending December 31, 2015.
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Discharge of Members of the Board of Directors from Liability Pursuant to Dutch Law
Under Dutch law, at the Annual Meeting, shareholders may discharge the members of the Board of Directors from liability in respect of the exercise of their duties during the financial year concerned. The discharge is without prejudice to the provisions of the law of the Netherlands relating to liability upon bankruptcy and does not extend to matters not disclosed to shareholders.
It is proposed that the shareholders resolve to discharge the members of the Board of Directors from liability pursuant to Dutch law in respect of the exercise of their duties during 2014.
The affirmative vote of the majority of the votes cast at the Annual Meeting is required to so discharge the members of the Board of Directors.
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Election of Directors
Our Board of Directors has fixed the number of directors at eleven. Acting upon the recommendation of its Nomination and Corporate Governance Committee, and taking into account the rights of certain shareholders pursuant to agreements the Company entered into permitting such shareholders to nominate directors to the Board as described under “Certain Relationships and Related Party Transactions – Letter Agreements with Sponsors,” our Board has nominated the persons identified herein for election orre-election as directors. Directors will hold office until the end of the next annual general meeting of shareholders and the election and qualification of their successors or until resignation. Action will be taken at the Annual Meeting for the election of these nominees. If Proposal No. 2 is approved and Nielsen-UK becomes the publicly-traded parent of the Nielsen group, these directors will be appointed to the board of Nielsen-UK.their earlier resignation, removal, disqualification or death.
It is intended that the proxies delivered pursuant to this solicitation will be voted in favor of the election orre-election of these nominees, except in cases of proxies bearing contrary instructions. In the event that these nominees should become unavailable for election orre-election due to any presently unforeseen reason, the persons named in the proxy will have the right to use their discretion to vote for a substitute.
ONGOING BOARD SUCCESSION PLANNING
Our Nomination and Corporate Governance Committee seeks to ensure that our Board as a whole possesses the objectivity and the mix of skills and experiences to provide effective oversight and guidance to management to execute on the Company’s long-term strategy. The Nomination and Corporate Governance Committee assesses potential candidates based on their history of achievement, the breadth of their experiences, whether they bring specific skills or expertise in areas that the Nomination and Corporate Governance Committee has identified, and whether they possess personal attributes that will contribute to the effective functioning of the Board.
Ongoing Board refreshment provides fresh perspectives while leveraging the institutional knowledge and historical perspective of our longer-tenured directors. The Nomination and Corporate Governance Committee also considers succession planning for roles such as Board and committee chairpersons for purposes of continuity and to maintain relevant expertise and depth of experience.
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ELECTION OF DIRECTORS |
Our Nomination and Corporate Governance Committee uses the following process to identify and add new directors to the Board:
Our Nomination and Corporate Governance Committee is authorized to use an independent search firm to help identify, evaluate and conduct due diligence on potential director candidates. Mr. De Luca was identified through the use of an independent search firm. Using an independent search firm helps the Nomination and Corporate Governance Committee ensure that it is conducting a broad search and helps it to consider a diverse slate of candidates with the qualifications and expertise that are needed to provide effective oversight of management and assist in long-term value creation.
Diversity Policy
The charter of our Nomination and Corporate Governance Committee requires the Nomination and Corporate Governance Committee to consider all factors it deems appropriate, which may include age, gender, nationality and ethnic and racial background in nominating directors and to review and make recommendations, as the Nomination and Corporate Governance Committee deems appropriate, regarding the composition and size of the Board to ensure the Board has the requisite expertise and its membership consists of persons with sufficiently diverse and
2018 PROXY STATEMENT 2 |
ELECTION OF DIRECTORS |
independent backgrounds. Over time, the Nomination and Corporate Governance Committee and the Board as a whole will assess the effectiveness of this policy and determine, how, if at all, our implementation of the policy, or the policy itself, should be changed.
Nomination Process
In considering whether to recommend nomination orre-nomination of each of our directors for election at the Annual Meeting, our Nomination and Corporate Governance Committee reviews the experience, qualifications, attributes and skills of our current directors to determine the extent to which those qualities continue to enable our Board to satisfy its oversight responsibilities effectively in light of our evolving business. In determining to nominate the directors named herein for election at the Annual Meeting, the Nomination and Corporate Governance Committee has focused on our current directors’ valuable contributions in recent years, the criteria set forth in “Board Expertise and Skills” in the “Summary of Proxy Statement Information” and the information discussed in the biographies set forth under “Proposal No. 1 – Election of Directors – Nominees for Election to the Board of Directors.” In addition, the Nomination and Corporate Governance Committee considered each director’s additional responsibilities and affiliations and the extent to which they could continue to contribute to the success of our Board.
In accordance with our articles of association, shareholders may request that director nominees submitted by such shareholders be included in the agenda of our Annual Meeting through the process described under “Shareholder Proposals for the 2019 Annual General Meeting of Shareholders.” The Nomination and Corporate Governance Committee considers shareholder recommendations for director candidates and evaluates such candidates with the same standards as it does for other Board candidates. The Nomination and Corporate Governance Committee will advise the Board whether to recommend shareholders to vote for or against such shareholder nominated candidates.
2018 PROXY STATEMENT 3 |
ELECTION OF DIRECTORS |
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
The following information describes the names, ages as of March 31, 20152018, and biographical information of each nominee. Beneficial ownership of equity securities of the nominees is shown under “Ownership of Securities.”
James A. Attwood, Jr. | Director since 2006 | Age 59 | ||||
Committees: Nomination and Corporate Governance | Other public company directorships: | |||||
• Current: Syniverse Holdings, Inc. Getty Images, Inc. CoreSite Realty Corporation | • Past 5 years: None | |||||
Key Experience and Qualifications • Financial expertise (mathematics and statistics) • Media/telecommunications/technology expertise and deep management experience at The Carlyle Group • Public company board experience Mr. Attwood has served as Chairperson of the Board since January 1, 2016 and served as Lead Independent Director of the Board from January 1, 2015 through December 31, 2015. Mr. Attwood is a Managing Director of The Carlyle Group and head of its Global Telecommunications, Media, and Technology Group. Prior to joining The Carlyle Group in 2000, Mr. Attwood was with Verizon Communications, Inc. and GTE Corporation. Prior to GTE Corporation, he was with Goldman, Sachs & Co. | ||||||
Mitch Barns | Director since 2014 | Age 54 | ||||
Committees: None | Other public company directorships: | |||||
• Current: Monsanto Company | • Past 5 years: None | |||||
Key Experience and Qualifications • Deep knowledge and incomparable insight about Nielsen as its Chief Executive Officer • Extensive global consumer goods and media experience • Research, analytics and data science experience Mr. Barns has been the Chief Executive Officer of Nielsen since January 1, 2014. His prior roles with Nielsen include President, Global Client Service from February 2013 until December 2013, President of Nielsen’s US Watch business from June 2011 until February 2013, President of Nielsen Greater China from January 2008 until June 2011, President of Nielsen’s Consumer Panel Services from March 2007 until January 2008 and President of Nielsen’s BASES and Analytic Consulting units from July 2004 until February 2007. He joined Nielsen in March 1997 after 12 years with The Procter & Gamble Company. |
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Mr. Calhoun has been the Executive Chairman of the Board of Nielsen since January 1, 2014 and, before that, served as a member of the Board of Nielsen (or its predecessor) since September 2006. He has served as Senior Managing Director and Head of Private Equity Portfolio Operations of The Blackstone Group L.P. since January 2014. Previously, Mr. Calhoun served as the Chief Executive Officer of Nielsen from September 2006 through December 2013. Prior to joining Nielsen, he served as Vice Chairman of General Electric Company and President and CEO of GE Infrastructure. During his 26-year tenure at GE, he ran multiple business units, including GE Transportation, GE Aircraft Engines, GE Employers Reinsurance Corporation, GE Lighting and GE Transportation Systems. Mr. Calhoun is a member of the boards of directors of The Boeing Company and Caterpillar Inc. He was also appointed Non-Executive Chairman of privately-owned Gates Global effective July 2014. He was a member of the board of directors of Medtronic Inc. from 2007 to 2012.
ELECTION OF DIRECTORS |
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| Director since 2017 | Age | ||||
Committees: Compensation | Other public company directorships: | |||||
• Current: Logitech International S.A. | • Past 5 years: None | |||||
Key Experience and Qualifications • Chief Executive Officer experience and public company board experience at Logitech International S.A. • Consumer technology, innovation, strategy and marketing experience • Global markets experience Mr. De Luca has served as the Chairman of the Board of Logitech International S.A. since January 2008. Mr. De Luca joined Logitech International S.A. in 1998 and served as its President and Chief Executive Officer from February 1998 to December 2007 and as acting President and Chief Executive Officer from July 2011 to December 2012. Prior to joining Logitech International S.A., Mr. De Luca served as Executive Vice President of Worldwide Marketing for Apple Computer, Inc. | ||||||
Karen M. Hoguet
| Director since 2010 | Age 61 | ||||
Committees: Audit (Chairperson) | Other public company directorships: | |||||
• Current: None | • Past 5 years: The Chubb Corporation | |||||
Key Experience and Qualifications • Audit and risk oversight experience • Senior management and public company experience at Macy’s, Inc. • Retail and commercial experience Ms. Hoguet has been the Chief Financial Officer of Macy’s, Inc. since February 2009; she previously served as Executive Vice President and Chief Financial Officer of Macy’s, Inc. from June 2005 to February 2009. Ms. Hoguet served as Senior Vice President and Chief Financial Officer of Macy’s, Inc. from October 1997 to June 2005. |
Mr. Attwood has been a director of Nielsen since June 2006. Mr. Attwood is a Managing Director of The Carlyle Group and Head of the Global Telecommunications, Media, and Technology Group. Prior to joining The Carlyle Group in 2000, Mr. Attwood was with Verizon Communications, Inc. and GTE Corporation. Prior to GTE, he was with Goldman, Sachs & Co. Mr. Attwood serves as a member of the boards of directors of Syniverse Holdings, Inc., Getty Images and CoreSite Realty Corporation. Mr. Attwood graduated summa cum laude from Yale University with a B.A. in applied mathematics and an M.A. in statistics and received both J.D. and M.B.A. degrees from Harvard University.
2018 PROXY STATEMENT 5 |
ELECTION OF DIRECTORS |
PROPOSAL NO. 5 – Election of Directors
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| Director since 2015 | Age | ||||
Committees: Compensation, | Other public company directorships: | |||||
• Current: Qualcomm Incorporated Whirlpool Corporation Hindustan Unilever Limited | • Past 5 years: Pearson plc | |||||
Key Experience and Qualifications • Global and emerging markets operating experience at Unilever, plc • Consumer packaged goods experience • Executive management and board experience at public companies Mr. Manwani has been Global Executive Advisor for Blackstone Private Equity Group since February 2015. He retired from Unilever, a leading global consumer products company, at the end of 2014, where he served as Chief Operating Officer from September 2011 until his retirement. Mr. Manwani joined Hindustan Unilever Limited (a majority-owned subsidiary of Unilever, plc) in 1976, becoming a member of its board in 1995, and since that time held positions of increasing responsibility at Unilever, plc which gave him wide ranging international marketing and general management experience. Mr. Manwani is a director of the Economic Development Board of Singapore and the Indian School of Business. | ||||||
Robert C. Pozen | Director since 2010 | Age 71 | ||||
Committees: Compensation; Nomination and Corporate Governance (Chairperson) | Other public company directorships: | |||||
• Current: Medtronic Public Limited Company | • Past 5 years: None | |||||
Key Experience and Qualifications • Governance and public policy expertise • Financial and financial reporting expertise • Public company board experience From July 1, 2010 through December 31, 2011, Mr. Pozen was Chairman Emeritus of MFS Investment Management. Prior to that, he was Chairman of MFS Investment Management since February 2004. He previously was Secretary of Economic Affairs for the Commonwealth of Massachusetts in 2003. Mr. Pozen was also the John Olin Visiting Professor, Harvard Law School from 2002 to 2004 and the Chairman of the SEC Advisory Committee on Improvements to Financial Reporting from 2007 to 2008. From 1987 through 2001, Mr. Pozen worked for Fidelity Investments in various jobs, serving as President of Fidelity Management and Research Co. from 1997 through 2001. He is currently a director of AMC, a subsidiary of the International Finance Corporation, a senior lecturer at MIT Sloan School of Management, anon-resident fellow of the Brookings Institution, a member of the Advisory Board of Perella Weinberg Partners and Chairman of the Leadership Council of the Tax Policy Committee. |
2018 PROXY STATEMENT 6
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Mr. Barns has been the Chief Executive Officer of Nielsen since January 1, 2014 and has been a director of Nielsen since October 2014. His prior roles with Nielsen include President, Global Client Service from February 2013 through December 2013, President of Nielsen’s U.S. Watch business from June 2011 until February 2013, President of Nielsen Greater China from January 2008 until June 2011, President of Nielsen’s Consumer Panel Services from March of Nielsen Greater China from January 2008 until June 2011, President of Nielsen’s Consumer Panel Services from March 2007 until January 2008 and President of Nielsen’s BASES and Analytic Consulting units from July 2004 through February 2007. He joined Nielsen in March 1997 after 12 years with The Procter & Gamble Company. He is a graduate of Miami University in Ohio and the Stanford Executive Program at the Stanford Graduate School of Business.
ELECTION OF DIRECTORS |
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| Director since 2017 | Age | ||||
Committees: Audit | Other public company directorships: | |||||
• Current: MonotaRO Co., Ltd. | • Past 5 years: None | |||||
Key Experience and Qualifications • Digital, innovation and technology experience • E-commerce commercial, brand and marketing experience • Global operating experience Mr. Rawlinson is the President of the Online Business of W.W. Grainger, where he also previously served as the Vice President for Operations for the Online Business. From July 2012 until August 2015, he was Grainger’s Vice President, Deputy General Counsel and Corporate Secretary. From November 2009 until July 2012, Mr. Rawlinson was Vice President, General Counsel and Director of Corporate Responsibility of a division of ITT Exelis, formerly ITT Corporation. Prior to ITT Exelis, Mr. Rawlinson served as a White House Fellow and in appointed positions for the George W. Bush and Obama Administrations. In the Bush Administration, he was a leader of the outgoing transition. In the Obama Administration, he served as Senior Advisor for Economic Policy at the White House National Economic Council. | ||||||
Javier G. Teruel | Director since 2010 | Age 67 | ||||
Committees: Audit | Other public company directorships: | |||||
• Current: Starbucks Corporation J.C. Penney Company, Inc. | • Past 5 years: None | |||||
Key Experience and Qualifications • Consumer packaged goods experience • Global operating experience, including as Vice Chairman of Colgate-Palmolive Company • Public company board experience Mr. Teruel is a Partner of Spectron Desarrollo, SC, an investment management and consulting firm; Chairman of Alta Growth Capital, a private equity firm; and a majority owner of Mexican investment firm, Desarrolo Empressarial Seborn, SA de CV. Previously, Mr. Teruel served as Vice Chairman of Colgate-Palmolive Company, from July 2004 to April 2007. Prior to being appointed Vice Chairman, he served in positions of increasing importance at Colgate since 1971, including as Executive Vice President responsible for Asia, Central Europe, Africa and Hill’s Pet Nutrition, as Vice President of Body Care in Global Business Development in New York, as President and General Manager of Colgate-Mexico, as President of Colgate-Europe, and as Chief Growth Officer responsible for the company’s growth functions. |
2018 PROXY STATEMENT 7
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Ms. Hoguet has been a director of Nielsen (or its predecessor) since November 2010. She has been the Chief Financial Officer of Macy’s Inc. since February 2009; she previously served as Executive Vice President and Chief Financial Officer of Macy’s from June 2005 to February 2009. Ms. Hoguet served as Senior Vice President and Chief Financial Officer of Macy’s from October 1997 to June 2005. Ms. Hoguet is currently a member of the board of directors of The Chubb Corporation. She graduated from Brown University and earned an MBA from Harvard Business School.
ELECTION OF DIRECTORS |
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Mr. Kilts has been a director of Nielsen (or its predecessor) since November 2006. He served as Chairman of the Board of Nielsen until January 1, 2014. Mr. Kilts is a founding partner of Centerview Capital. Prior to joining Centerview Capital, Mr. Kilts was Vice Chairman of the Board of The Procter & Gamble Company. Mr. Kilts was formerly Chairman of the Board, Chief Executive Officer and President of The Gillette Company before the company’s merger with Procter & Gamble in October 2005. Prior to Gillette, Mr. Kilts had served at different times as President and Chief Executive Officer of Nabisco, Executive Vice President of the Worldwide Food Group of Philip Morris, President of Kraft USA and Oscar Mayer, President of Kraft Limited in Canada, and Senior Vice President of Kraft International. A graduate of Knox College, Galesburg, Illinois, Mr. Kilts earned a Masters of Business Administration degree from the University of Chicago. Mr. Kilts is currently a member of the boards of directors of Metropolitan Life Insurance Co. and Pfizer Inc. Mr. Kilts was a member of the board of directors of MeadWestvaco Corporation until April 2014. He is also a member of the Board of Overseers of Weill Cornell Medical College. Mr. Kilts serves on the Board of Trustees of the University of Chicago, is a Life Trustee of Knox College and is a Life Member of the Advisory Council of the University of Chicago Booth School of Business (Chairman from 2002-2009).
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Mr. Manwani has been a director of Nielsen since January 2015. He has been Global Executive Advisor for Blackstone Private Equity since February 2015.He retired from Unilever, a leading global consumer products company, at the end of 2014, where he served as Chief Operating Officer since September 2011. Mr. Manwani joined Hindustan Unilever (HUL) in 1976, becoming a member of the HUL board in 1995, and since that time held positions of increasing responsibility in Unilever which gave him wide ranging international marketing and general management experience. Mr. Manwani is a director of Qualcomm Incorporated since May 2014, Pearson plc since October 2013 and Whirlpool Corporation since August 2011. He is also the non-executive chairman of Hindustan Unilever Limited since July 2005. He previously served as a director of ING Group from April 2008 to April 2010. He is a director of the Economic Development Board of Singapore since February 2013 and the Indian School of Business since April 2006. Mr. Manwani holds a Bachelor of Science honors degree in Statistics and a Master’s degree in Management Studies, both from Mumbai University in India. He has also attended the Advance Management Program at Harvard Business School.
PROPOSAL NO. 5 – Election of Directors
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Committees: Compensation; Nomination and |
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Ms. Marinello has been a director of Nielsen since October 2014. Ms. Marinello has also been member of the Board of Directors of General Motors Company since July 2009 and a member of the Board of Directors of AB Volvo since April 2014. She was also a member of the Board of Directors of General Motors Corporation from 2007 to 2009. In March 2014, Ms. Marinello rejoined Ares Management LLC, a global asset manager, as Senior Advisor. She had been Chairman and Chief Executive Officer of Stream Global Services, Inc., a global business process outsource service provider specializing in customer relationship management for Fortune 1,000 companies, from August 2010 through March 2014. Ms. Marinello served as senior advisor and consultant at Providence Equity Partners LLC, a private equity firm, and Ares Management LLC from June to August 2010. She served as Chairman and Chief Executive Officer of Ceridian Corporation, a human resources outsourcing company, from December 2007 to January 2010; and President and Chief Executive Officer from 2006 to 2007. Prior to joining Ceridian, Ms. Marinello spent 10 years at General Electric Company (“GE”), and served in a variety of senior roles, including President and Chief Executive Officer of GE Fleet Services, a division of GE, from 2002 to 2006.
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Other public company directorships: |
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Mr. Navab has been a director of Nielsen since June 2006. Since October 2009, Mr. Navab has been a member of KKR Management LLC, the general partner of KKR & Co. L.P. (prior to that, he was a member of KKR & Co. L.L.C., the general partner of Kohlberg Kravis Roberts & Co. L.P.), where he is the Head of Americas Private Equity. Mr. Navab serves as the Chair of Americas Private Equity Investment Committee, is a member of the Americas Portfolio Management Committee, and serves on KKR’s Special Situations Investment Committee. Prior to joining KKR in 1993, Mr. Navab was with James D. Wolfensohn Incorporated and prior to that he was with Goldman, Sachs & Co. Mr. Navab is currently also a director of Weld North. Mr. Navab received a B.A. with Honors, Phi Beta Kappa, from Columbia College and an M.B.A. with High Distinction from the Harvard Graduate School of Business Administration.
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Mr. Pozen has been a director of Nielsen (or its predecessor) since May 2010. From July 1, 2010 through December 31, 2011, he was Chairman Emeritus of MFS Investment Management. Prior to that, he was Chairman of MFS Investment Management since February 2004. He previously was Secretary of Economic Affairs for the Commonwealth of Massachusetts in 2003. Mr. Pozen was also the John Olin Visiting Professor, Harvard Law School from 2002-2004 and the chairman of the SEC Advisory Committee on Improvements to Financial Reporting from 2007-2008. From 1987 through 2001, Mr. Pozen worked for Fidelity Investments in various jobs, serving as President of Fidelity Management and Research Co. from 1997 through 2001. He is currently a director of Medtronic, Inc. and AMC, a subsidiary of the International Finance Corporation. He is a senior lecturer at Harvard Business School, a senior fellow of the Brookings Institution, a visiting senior lecturer at MIT Sloan School of Management, and a trustee of the Commonwealth Fund.
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Mr. Ranadivé has been a director of Nielsen since July 26, 2012. He was the Chief Executive Officer and Chairman of TIBCO Software Inc. (“TIBCO”) since its inception in 1997 until December 2014 and now serves as a board member of TIBCO and assists it with strategic projects. Mr. Ranadivé founded Teknekron Software Systems, Inc., TIBCO’s predecessor, in 1985. Prior to founding TIBCO, Mr. Ranadivé was president and founder of a UNIX consulting company. Previously, he held management and engineering positions with Ford Motor Company, M/A-Com Linkabit and Fortune Systems. Mr. Ranadivé is a frequent presenter on such topics as the future of integration, enabling real-time business and unleashing the power of information across enterprises to become more competitive. Mr. Ranadivé earned an MBA from Harvard Business School, where he was a Baker Scholar. He received both a Master’s and Bachelor’s Degree in Electrical Engineering from the Massachusetts Institute of Technology.
PROPOSAL NO. 5 – Election of Directors
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GoPro, Inc. |
None | ||||
Key Experience and Qualifications
• Media expertise, including at NBCUniversal Media, LLC • Digital, innovation and technology experience • Commercial and management expertise Ms. Zalaznick is currently a senior strategic advisor to leading media and digital companies. From 2004 through December 2013, Ms. Zalaznick held various roles of increasing responsibility within NBCUniversal Media, LLC. In 2010 she became Chairman, Entertainment & Digital Networks and Integrated Media. In that capacity she had responsibility for the cable entertainment networks Bravo Media, Oxygen Media, and The Style Network; the Telemundo Spanish language broadcast network; and she ran the company’s digital portfolio. She was promoted to Executive Vice President at Comcast NBCUniversal until departing the company at the end of 2013. Ms. Zalaznick is currently a member of the boards of directors of Shazam and Critical Content. She is a senior advisor to The Boston Consulting Group, TMT practice, and to leading content and tech start-ups, including Refinery29, Atlas Obscura and Fatherly.com. |
Mr. Teruel has been a director of Nielsen (or its predecessor) since August 2010. He is a Partner of Spectron Desarrollo, SC, an investment management and consulting firm and Chairman of Alta Growth Capital, a private equity firm; Retired Vice Chairman (2004 to 2007) of Colgate-Palmolive Company (consumer products), with which he served in positions of increasing importance since 1971, including as Executive Vice President responsible for Asia, Central Europe, Africa and Hill’s Pet Nutrition, as Vice President of Body Care in Global Business Development in New York, as President and General Manager of Colgate-Mexico, as President of Colgate-Europe, and as Chief Growth Officer responsible for the company’s growth functions. He has served as a director of Starbucks Corporation since 2005 and JCPenney since 2008. He served as a director of the Pepsi Bottling Group, Inc. from 2007 to 2010.
The nominees for election to the Board of Directors named above are hereby proposed for re-appointmentappointment and reappointment by the shareholders.
![]() ![]() | The Board of Directors recommends that shareholders vote “FOR” the election of each of the nominees named above. |
2018 PROXY STATEMENT 8 |
Pursuant to our articles of association and in accordance with the UK Companies Act 2006, our directors are responsible for the management of the Company’s business, for which purpose they may exercise all the powers of the Company.
Our Board conducts its business through meetings of Directorsthe Board and Certain Governance Matters
Nielsen-UK is expected to have the same directors, executive officersthree standing committees: Audit, Compensation and committees as Nielsen-Netherlands.
Nomination and Corporate Governance. In accordance with the NYSENew York Stock Exchange (“NYSE”) rules, a majority of our Board of Directors consists of independent directors, and our Audit, Committee, Compensation Committee and Nomination and Corporate Governance CommitteeCommittees are fully independent.
The members of our Board of Directors may be suspended or dismissed at any time at the general meeting of shareholders. If a resolution to suspend or dismiss a director is proposed by the Board, such resolution may be adopted by a majority of the votes validly cast. If no such proposal is made by the Board, then a director may be suspended or dismissed by the general meeting by at least a two-thirds majority of the votes cast, provided such majority represents more than half of our issued share capital.
Our Chief Executive Officer is expected to be responsible for the day-to-day management of the Company. Our directors are expected to supervise our Chief Executive Officer and our general affairs and to provide general advice to the Chief Executive Officer. The directors perform those acts that are delegated to them pursuant to our articles of association or by our board regulations.
Each director owes a duty to usthe Company to properly perform the duties assigned to him or her and to act in the corporatebest interest of ourthe Company. Under Dutch law and English law, this requires each director to act in a way he or she considers, in good faith, would be most likely to promote the corporate interest extends tosuccess of the Company for the benefit of its shareholders as a whole, and in doing so have regard (among other matters) for the likely consequences of any decision in the long-term, the interests of all corporate stakeholders, such as shareholders, creditors,the Company’s employees, the Company’s business relationships with suppliers, customers and suppliers. Ourothers, the impact of the Company’s operations on the community and the environment and the need to act fairly amongst shareholders. The Company’s directors are expected to be appointed for one year and willmay be re-electable each yearre-elected at the annual general meeting of shareholders.next Annual Meeting.
Our Board of Directors has adopted board regulations governing its performance, its decision making, its composition, the tasks and working procedure of the committees and other matters relating to the Board of Directors, the Chief Executive Officer, the directors and the committees established by the Board of Directors. In accordance with our board regulations, resolutions of our Board of Directors will be adopted by a simple majority of votes cast in a meeting at which at least the majority of its members is present or represented.
DIRECTOR INDEPENDENCE AND INDEPENDENCE DETERMINATIONS
The Board of Directors must make an affirmative determination at least annually as toUnder the independence of each director. ANYSE rules and our Corporate Governance Guidelines, a director is not independent unless the Board affirmatively determines that he or she does not have a direct or indirect material relationship with the Company or any of its subsidiaries. Heightened independence standards apply to members of the Audit Committee and Compensation Committee.Committees.
The NYSE independence definition includes a series of objective tests, such as that the director is not an employee of the Company and has not engaged in various types of business dealings with the Company. The Board is also responsible for determining affirmatively, as to each independent director, that no relationships exist which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, the Board will broadly consider all relevant facts and circumstances, including information provided by the directors and the Company with regard to each director’s business and personal activities as they may relate to the Company and the Company’s management. As the concern is independence from management and pursuant to the Board does not view articulated by the NYSE, ownership of even a significant amount of stock, by itself, asis not a bar to an independence finding.
THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS
The categorical standards set forth in our Corporate Governance Guidelines are intended to assist the Board of Directors in determining whether or not certain relationships between our directors and us, either directly or as a partner, shareholder or officer of an organization that has a relationship with us, are “material relationships” for purposes of the NYSE independence standards. The categorical standards establish thresholds at which such relationships are deemed to be material.
The Board of Directors undertook its annual review of director independence. As a result of the independence review, the Board of Directorsand affirmatively determined that, except for Mr. Barns, each of Messrs. Attwood, Kilts, Manwani, Navab, Pozen, Ranadivé and Teruel and Mses. Hoguet and Marinelloour directors is independent under Section 303A.02 of the NYSE listing rules and under our Corporate Governance Guidelines for purposes of board services.service. In addition, the Board of Directors affirmatively determined that each of Messrs. Pozen and Teruel and Mses. Hoguet and Marinello is independent under Rule 10A-3(b)(i) of the Exchange Act for purposes of Audit Committee, servicesthe Compensation Committee, and that each of Messrs. Manwani, Navab, Ranadivéthe Nomination and Teruel isCorporate Governance Committee members are fully independent under the SEC and NYSE listing rulesindependence standards specifically applicable to Compensation Committees. such committees.
In making suchthe director independence determinations, the Board considered the following:
2018 PROXY STATEMENT 9 |
THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS |
Under our Corporate Governance Guidelines, the Board must select its chairperson from its members in any way it considers in the best interestsinterest of the Company. Pursuant to our articles of association, a non-executive director must be appointedSince January 1, 2016, Mr. Attwood has served as the chairpersonBoard’snon-executive, independent Chairperson. In light of Mr. Attwood’s independence from the Board. Effective January 1, 2014, Mr. Calhoun resigned as the Company’s Chief Executive Officer and began serving as Executive Chairman of the Company’s Board (replacing Mr. Kilts as Chairman who continues as a Board member). Also effective January 1, 2014, Mr. Barns succeeded Mr. Calhoun as the Company’s Chief Executive Officer. In connection with his departure as Chief Executive OfficerCompany and his appointment as Executive Chairman, Mr. Calhoun entered into a Transition Agreement reflecting his change in status and under which he has agreed to devote between 15% and 20% of his business time through December 31, 2015 (or such earlier date as the Board decides to end such services) to provide guidance and advice to Mr. Barns with respect to all aspects of his duties and responsibilities as the new Chief Executive Officer. Our Board believes this arrangement provides for an appropriate transition of the Chief Executive Officer’s responsibilities and a continuation of the strong support and strategic direction the current Board has providedChairperson, the Company since its initial public offering. Additionally, Mr. Calhoun’s attention to Board matters as Executive Chairman allows Mr. Barns to focus more specifically on overseeing the Company’s operations as well as strategic opportunities and planning.does not currently have a Lead Independent Director. As noted further below, theeach Board committee also has anon-executive, independent members of our Board have elected James Attwood as the lead independent director effective January 1, 2015.chairperson. Our Board believes our leadership structure best encourages the free and open dialogue of competing views and provides for strong checks and balances.
Effective January 1, 2015, our Board adopted the Lead Independent Director Charter. This charter calls for the election of a lead independent director by a majority vote of the board’s independent directors. The lead independent director is generally expected to serve in that role for at least one year. Effective January 1, 2015, the independent members of our Board elected Mr. Attwood as its lead independent director. The principal responsibilities of the lead independent director are as follows:
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THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS
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The Lead Independent Charter is available on our website atwww.nielsen.com/investors under Governance Documents.
Our Board of Directors has established the following Committees:committees: an Audit Committee, a Compensation Committee and a Nomination and Corporate Governance Committee. The current composition and responsibilities of each Committeecommittee are described below. Members serve on these Committeescommittees until their resignationthey no longer serve on the Board or until otherwise determined by our Board of Directors.Board.
Name of Independent Director | Audit Committee | Compensation Committee | Nomination and Corporate | |||||||||||||||
James A. Attwood, Jr. | • | |||||||||||||||||
Guerrino De Luca | • | |||||||||||||||||
Karen M. Hoguet | Chairperson | |||||||||||||||||
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Harish Manwani | ||||||||||||||||||
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Robert C. Pozen | • | Chairperson | ||||||||||||||||
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Javier G. Teruel | • | |||||||||||||||||
Lauren Zalaznick | • | • |
Pursuant to our Corporate Governance Guidelines, all directors are expected to make every effort to attend all meetings of the Board and meetings of the Committeescommittees of which they are members. DirectorsAll directors are encouragedalso welcome to attend board meetings and meetingsreview materials of those committees of which they are members in person, but may also attend such meetings by telephone or video conference.
not members. During the year ended December 31, 2014,2017, the Board the Audit Committee, the Compensation Committee and the Nomination and Corporate Governance Committee held 8, 8, 6 and 5 meetings, respectively.six meetings. Each director attended 75%100% of 2017 Board meetings and 90% or more of the total number of 20142017 meetings of the Board and of the Committeesthose committees on which each such director served and that were held during the period that such director served.
In accordance with our Corporate Governance Guidelines, the CEO is expected to attend the annual general meeting and each extraordinary general meeting of shareholders. Allnon-executive directors are encouraged (but not required) to attend the annual general meetingAnnual Meeting and each extraordinary general meeting of shareholders. EightAll but one of our current directors who served at the time of our 2017 Annual Meeting, attended the annual general meeting held in 2014.this meeting.
2018 PROXY STATEMENT 10 |
THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS |
COMMITTEE MEMBERSHIP AND RESPONSIBILITIES
Audit Committee
Our Audit Committee consists of Messrs. Pozen and Teruel and Mses. Hoguet and Marinello, with Ms. Hoguet serving as Chairman. The Board of Directors has determined that each of Messrs. Pozen and Teruel and Mses. Hoguet and Marinello meets the definition of “independent director” under the NYSE listing rules, Rule 10A-3(b)(i) of the Exchange Act and the categorical standards of director independence under our Corporate Governance Guidelines. The Board of Directors has determined that each of Messrs. Pozen and Teruel and Mses. Hoguet and Marinello qualifies as an “audit committee financial expert” as defined by applicable regulations of the SEC and meets the financial literacy and expertise requirements of the NYSE.
Members: • Karen M. Hoguet (Chairperson) • David Rawlinson • Javier G. Teruel Independence: All members are independent. Audit Committee Financial Expert: All members qualify as “audit committee financial experts” and meet NYSE financial literacy and expertise requirements. Meetings in Fiscal Year 2017: 8 | Audit Committee Key Responsibilities: •External auditor. Appointing our external auditors, subject to shareholder vote as may be required under English law, overseeing the external auditors’ qualifications, independence and performance, discussing relevant matters with the external auditors and providing preapproval of audit and permittednon-audit services to be provided by the external auditors and related fees; •Financial reporting.Supervising and monitoring our financial reporting and reviewing with management and the external auditor Nielsen’s annual and quarterly financial statements; •Internal audit function. Overseeing our internal audit process and our internal audit function; •Internal controls, risk management and compliance programs. Overseeing our system of internal controls, our enterprise risk management program (including cyber security) and our compliance with relevant legislation and regulations; and •Information security, technology and privacy & data protection. Evaluating updates received at least quarterly from the Company’s Chief Information Security Officer and Chief Technology and Operations Officer regarding the Company’s information, technology and data protection security systems, its preparedness in preventing, detecting and responding to breaches, and any incidents and related response efforts, to then report to the Board. | |||||
2018 PROXY STATEMENT 11 |
THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS
Our Audit Committee supervises and monitors our financial reporting, risk management program and compliance with relevant legislation and regulations. It oversees the preparation of our financial statements, our financial reporting process, our system of internal controls and risk management, our internal and external audit process and our internal and external auditor’s qualifications, independence and performance. Our Audit Committee also reviews our annual and interim financial statements and other public disclosures prior to publication. Our Audit Committee appoints our external auditors, subject to shareholder vote as may be required under Dutch law, and oversees the work of the external and internal audit functions, providing compliance oversight, preapproval of all audit engagement fees and terms, preapproval of audit and permitted non-audit services to be provided by the external auditor, establishing auditing policies, discussing the results of the annual audit, critical accounting policies, significant financial reporting issues and judgments made in connection with the preparation of the financial statements and related matters with the external auditor and reviewing earnings press releases and financial information provided to analysts and ratings agencies.
Compensation Committee
Our Compensation Committee consists of Messrs. Manwani, Navab, Ranadivé and Teruel, with Mr. Teruel serving as Chairman. Our Board of Directors has affirmatively determined that each of Messrs. Manwani, Navab, Ranadivé and Teruel meets the definition of “independent director” for purposes of the NYSE listing rules and the categorical standards of director independence under our Corporate Governance Guidelines.
Our Compensation Committee is responsible for, among other things, setting, reviewing and evaluating compensation, and related performance and objectives, of our senior management team, makes recommendations to our Board of Directors with respect to major employment-related policies and oversees compliance with our employment and compensation-related disclosure obligations under applicable laws. In addition, our Compensation Committee assists our Board in deciding on the individual compensation applicable to our directors, within the framework permitted by the general compensation policy approved by our shareholders.
In fulfilling its responsibilities, the Compensation Committee is entitled to delegate any or all of its responsibilities to subcommittees of the Compensation Committee. The Compensation Committee may delegate to one or more officers of the Company the authority to make grants and awards of cash or options or other equity securities to any non-Section 16 officer of the Company under the Company’s incentive-compensation or other equity-based plans as the Compensation Committee deems appropriate and in accordance with the terms of such plan; provided that such delegation is in compliance with the relevant plan and subject to the laws of the Netherlands and the Company’s articles of association.
Nomination and Corporate Governance Committee
Our Nomination and Corporate Governance Committee consists of Messrs. Attwood, Kilts, Pozen and Ranadivé, with Mr. Pozen serving as Chairman. The Board of Directors has determined that Messrs. Attwood, Kilts, Pozen and Ranadivé meet the definition of “independent director” under the NYSE listing rules and the categorical standards of director independence under our Corporate Governance Guidelines.
Our Nomination and Corporate Governance Committee determines selection criteria and appointment procedures for members of our Board of Directors, periodically assesses the scope and composition of our Board of Directors and evaluates the performance of its individual members, among other responsibilities.
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Our Chief Executive Officer and other executive officers regularly report to the Board of Directors and the Audit, Compensation and Nomination and Corporate Governance Committees to ensure effective and efficient oversight of the Company’s activities and to assist in proper risk management and the ongoing evaluation of management controls. The Senior Vice President of Corporate Audit reports functionally and administratively to the Company’s Chief Financial Officer and directly to the Audit Committee. The Company believes that the Board’s leadership structure provides appropriate risk oversight of the Company’s activities.
Members: • Harish Manwani (Chairperson) • Guerrino De Luca • Robert C. Pozen • Lauren Zalaznick Independence: All members are independent. Meetings in Fiscal Year 2017: 6 | Compensation Committee Key Responsibilities: •Executive compensation. Setting, reviewing and evaluating compensation, and related performance and objectives, of our senior management team; •Incentive and equity-based compensation plans. Reviewing and approving, or making recommendations to our Board with respect to, our incentive and equity-based compensation plans and equity-based awards; •Compensation-related disclosure. Overseeing compliance with our compensation-related disclosure obligations under applicable laws; •Director compensation. Assisting our Board in determining the individual compensation for our directors within the framework permitted by the general compensation policy approved by our shareholders; and • Talent development/employee engagement.Overseeing leadership development and employee experience, including recruitment, development, advancement and retention. Compensation Committee Interlocks and Insider Participation: None of the current members of the Compensation Committee is a former or current officer or employee of the Company or any of its subsidiaries. No Compensation Committee member has any relationship required to be disclosed under this caption under the rules of the SEC. | |||||
Members • Robert C. Pozen (Chairperson) • James A. Atwood, Jr. • Lauren Zalaznick Independence: All members are independent. Meetings in Fiscal Year 2017: 6 | Nomination and Corporate Governance Committee Key Responsibilities: •Director nomination. Determining selection criteria and appointment procedures for our Board and committee members and making recommendations regarding nominations and committee appointments to the full Board; •Board composition. Periodically assessing the scope and composition of our Board and its committees; •Succession planning. Developing and overseeing succession planning and talent management for CEO, other senior leadership positions and directors; •Corporate governance. Advising the Board on corporate governance matters and overseeing the Company’s corporate responsibility and sustainability strategy; and •Board and Committee evaluations. Overseeing the evaluation process for our Board and its committees. | |||||
2018 PROXY STATEMENT 12 |
THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS |
BOARD AND COMMITTEE EVALUATIONS
Our Board recognizes that a thorough, constructive evaluation process enhances our Board’s effectiveness and is an essential element of good corporate governance. Accordingly, every year, our Nomination and Corporate Governance Committee oversees the evaluation process to ensure that the full Board and each committee conducts an assessment of its performance and functioning and solicits feedback for enhancement and improvement.
5 | Actions As an outcome of these discussions, the Board Chairperson and each committee chairperson suggest changes for areas of improvement. Examples of changes made in response to the evaluation process include: • Board refreshment, including adding a director with CEO and technology experience; • Extending the length of Board and committee meetings to allow additional time for executive sessions; and • Expanding the remit of the Compensation Committee to include oversight of leadership development of employees as well as matters related to employee experience, recruitment, advancement and retention. |
2018 PROXY STATEMENT 13 |
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OUR BOARD’S COMMITMENT TO SHAREHOLDER ENGAGEMENT
Why We Engage
Our Board and management team recognize the benefits of regular engagement with our shareholders in order to remain attuned to their different perspectives on the matters affecting Nielsen.
Robust dialogue and engagement efforts allow our Board and management the opportunity to:
2018 PROXY STATEMENT 14 |
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![]() | Outcomes from Investor Feedback Some tangible examples of the results of our shareholder outreach activities include: • Increased our financial disclosures to help investors better understand our business. • Included a broader array of senior management and members of our Board in our engagement efforts. • Enhanced our proxy statement disclosures to provide more detail about the assessments that factor into pay decisions for our named executive officers. • Imposed a cap on payouts under our long-term performance plan if the Company’s total shareholder return is negative over the applicable performance period. |
2018 PROXY STATEMENT 15 |
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Any interested party who would like to communicate with, or otherwise make his or her concerns known directly to, the Chairperson of the Board or the Chairperson of any of the Audit Committee, Nomination and Corporate Governance Committee and Compensation Committee or to other directors, including thenon-management or independent directors, individually or as a group, may do so by addressing such communications or concerns to the Company Secretary at companysecretary@nielsen.com or 40 Danbury Road, Wilton, Connecticut 06897. Such communications may be done confidentially or anonymously. The Company Secretary will forward communications received to the appropriate party. Additional contact information is available on our website,www.nielsen.com/investors, under Contact Us.
GLOBAL RESPONSIBILITY AND CERTAIN GOVERNANCE MATTERSSUSTAINABILITY
Nielsen is committed to strengthening the communities and markets in which we live and operate our business, recognizing how important this is to a sustainable future. This commitment is supported and expressed at all levels of our organization. The Nomination and Corporate Governance Committee oversees the Company’s strategy and initiatives to evaluate and measure our performance with respect to the advancement of environmental, social, and governance (“ESG”) issues. Highlights of our new and continuing efforts in 2017 include:
Responsibility & Sustainability Strategy and Reporting:
Nielsen Green:
Supply Chain Sustainability:
2018 PROXY STATEMENT 16 |
THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS |
Nielsen Cares:
2018 PROXY STATEMENT 17 |
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Data for Good:
Nielsen Foundation:
Educating our directors about Nielsen and our industry is an ongoing process that begins when a director joins our Board. All new directors take part in a comprehensive orientation about Nielsen which includes meetings with senior leaders to discuss our businesses and strategy as well as our control functions, including finance, operations and legal. We also conductin-depth training sessions on the work of our committees for both new directors and those directors who are newly appointed to a committee. For a new member of the audit committee, this may include training with our independent registered public accounting firm.
We encourage our directors to participate in external continuing director education programs and provide reimbursement for expenses associated with this participation. Continuing director education is also provided during Board meetings and other Board discussions as part of the formal meetings and as stand-alone information sessions outside of meetings. Among other topics, during 2017, we conducted standalone “deep dive” education sessions on the latest developments and trends in our Buy and Watch businesses. Our Board also regularly reviews developments in corporate governance to continue enhancing our Board’s effectiveness.
The Board is responsible for overseeing Nielsen’s risk and enterprise risk management practices and seeks to foster a risk-aware culture while encouraging appropriate and balanced risk-taking in pursuit of Company objectives. The Board exercises its oversight both directly and through its three committees, each of which has been delegated oversight responsibilities for specific risks. Each committee keeps the Board informed of its oversight efforts through regular reporting to the full Board by the committee chairpersons.
2018 PROXY STATEMENT 18 |
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Management is accountable forday-to-day risk management efforts. The Board and committees’ risk oversight and management’s ownership of risk are foundational components of our Enterprise Risk Management program. This program is designed to provide comprehensive, integrated oversight and management of risk and to facilitate transparent identification and reporting of key business issues to senior management and the Board and its committees. The following are the key risk oversight and management responsibilities of our Board, committees and management:
2018 PROXY STATEMENT 19 |
THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS |
One of the Board’s primary responsibilities is to ensure that Nielsen has the appropriate talent to accomplish our business strategies today and in the future. The Board plans for CEO succession by establishing selection criteria and identifying and evaluating potential internal candidates. |
Pursuant to our Corporate Governance Guidelines, to ensure free and open discussion and communication, among theour independent directors of the Board, they meet regularlyin executive session, with no members of management present. Thepresent, at every regularly scheduled Board meeting. Our Chairperson presides atleads these meetings referredwhich enable our independent directors to discuss matters such as executive sessions. Thestrategy, CEO and senior management performance and compensation, succession planning and board composition and effectiveness. During 2017, our independent directors met fivesix times in executive session in 2014. In addition, through the end of 2014, the independent directors met once.session.
COMMITTEE CHARTERS AND CORPORATE GOVERNANCE GUIDELINES
Our commitment to corporate governance is reflected in our Corporate Governance Guidelines, which describe the Board of Directors’Board’s views on a wide range of governance topics. These Corporate Governance Guidelines are reviewed from time to time by the Board of Directors to ensure that they effectively promote the best interests of the Company, its shareholders and other relevant stakeholders and that they comply with all applicable laws, regulations and stock exchange requirements, in addition to our articles of associationassociation. Additionally, the Board has adopted a written charter for each of the Audit Committee, the Compensation Committee and Board regulations.the Nomination and Corporate Governance Committee. Our Corporate Governance Guidelines, our Committeecommittee charters and other corporate governance information are available on our website atwww.nielsen.com/investors under Governance Documents.
2018 PROXY STATEMENT 20 |
THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS |
CODE OF CONDUCT AND PROCEDURES FOR REPORTING CONCERNS ABOUT MISCONDUCT
We maintain a Code of Conduct, and Procedures for Reporting Concerns about Misconduct (the “Code of Conduct”), which is applicable to all of our directors, officers and employees.employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Code of Conduct, which was updated in 2017, sets forth our policies and expectations on a number of topics, including conflicts of interest, compliance with laws and ethical conduct. The Company will promptly disclose to our shareholders, if required by applicable laws or stock exchange requirements, any amendments to or waivers offrom the Code of Conduct grantedapplicable to our directors or officers by posting such information on our website atwww.nielsen.com/investorsrather than by filing a Current Report onForm 8-K.
The Code of Conduct may be found on our website atwww.nielsen.com/investors under Governance Documents.
The Board of Directors seeks to ensure that the Board is composed of members whose particular experience, qualifications, attributes and skills, when taken together, will allow the Board to satisfy its oversight responsibilities effectively. More specifically, in identifying candidates for membership on the Board, the Nomination and Corporate Governance Committee takes into account (1) threshold individual qualifications, such as strength of character, mature judgment and industry knowledge or experience and (2) all other factors it considers appropriate, including alignment with our shareholders and contractual obligations we have with certain shareholders (as described above). In addition, the Board maintains a formal diversity policy governing the nomination of its members as described below.
When determining whether our current directors have the experience, qualifications, attributes and skills, taken as a whole, to enable our board to satisfy its oversight responsibilities effectively in light of our business and structure, our Board focused primarily on our directors’ valuable contributions to our success in recent years and on the information discussed in the biographies set forth under “Proposal No. 5 – Election of Directors – Nominees for Election to the Board of Directors.” In particular, Mr. Calhoun was selected to serve as a director because of his role as our former Chief Executive Officer, the management perspective he brings to Board deliberations and his extensive management expertise at public companies. Mr. Barns was selected to serve as a director because of his role as our Chief Executive Officer and the management perspective he brings to Board deliberations. Mr. Attwood was selected to serve as a director in light of his affiliation with The Carlyle Group, his financial expertise and his background in the telecommunications and media industries. Ms. Hoguet was selected to serve as a director in light of her familiarity with financial reporting, her public-company experience, her experience in the retail industry and her financial and commercial acumen and insight. Mr. Kilts was selected to serve as a director in light of his experience as a public company chief executive officer, his significant experience in the consumer packaged goods industry and financial expertise. Mr. Manwani was selected to serve as a director in light of his international operating experience in the consumer packaged goods industry. Ms. Marinello was selected to serve as a director in light of her significant experience as an executive and a director of various multinational companies and her financial and commercial expertise. Mr. Navab was selected to serve as a director in light of his affiliation with Kohlberg Kravis Roberts &—Governance Documents.
2018 PROXY STATEMENT 21 |
THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS
Co., his financial expertise and his background in the media and communications industries. Mr. Pozen was selected to serve as a director in light of his familiarity with financial reporting, his experience as a director of other companies, his work in the investment management industry and his financial and commercial acumen and insight. Mr. Ranadivé was selected to serve as a director in light of his significant experience as a public company chief executive officer and in the software business dealing with analytics, integration, the capturing of relevant information in real time and optimizing behavior based on such information. Mr. Teruel was selected to serve as a director in light of his significant experience in the consumer packaged goods industry and his financial and commercial expertise.
In accordance with our articles of association and our Advance Notice Policy, shareholders may request that director nominees submitted by such shareholders be included in the agenda of our annual meeting of shareholders through the process described under “Shareholder Proposals for the 2016 Annual Meeting of Shareholders.” The Nomination and Corporate Governance Committee will consider director candidates recommended by shareholders. The Board may decide not to place any such proposal on the agenda of a shareholders’ meeting if the request by the relevant shareholders is, in the given circumstances, unacceptable pursuant to the standards of reasonableness and fairness (which may include circumstances where the Board, acting reasonably, is of the opinion that putting such item on the agenda would be detrimental to a vital interest of the Company).
Diversity Policy
The charter of our Nomination and Corporate Governance Committee requires the Committee to consider age, gender, nationality and ethnic and racial background in nominating directors and to review and make recommendations, as the Nomination and Corporate Governance Committee deems appropriate, regarding the composition and size of the Board of Directors in order to ensure the Board has the requisite expertise and its membership consists of persons with sufficiently diverse and independent backgrounds.
The implementation of these diversity policies rests primarily with the Nomination and Corporate Governance Committee as the body responsible for identifying individuals believed to be qualified as candidates to serve on the Board of Directors and recommending that the Board nominate the candidates for all directorships to be filled by the shareholders at their annual meetings.
As Board seats become available, the Nomination and Corporate Governance Committee, and the Board of Directors as a whole, will have the opportunity to assess the effectiveness of the diversity policy and how, if at all, our implementation of the policy, or the policy itself, should be changed.
Pursuant to our Corporate Governance Guidelines, anyone who would like to communicate with, or otherwise make his or her concerns known directly to, the chairperson of any of the Audit Committee, Nomination and Corporate Governance Committee and Compensation Committee, the lead independent director or to other non-executive or independent directors as a group, may do so by addressing such communications or concerns to the Corporate Secretary, 40 Danbury Road, Wilton, Connecticut 06897, who will forward such communications to the appropriate party. Such communications may be done confidentially or anonymously. Additional contact information is available on our website,www.nielsen.com/investors, under Contact Us.
EXECUTIVE OFFICERS OF THE COMPANY
Set forth below is the name, age as of March 31, 20152018 and biographical information of each of our current executivesexecutive officers, , other than Mr. Barns, whose information is presented under “Proposal No. 51 – Election of Directors – Nominees for Election to the Board of Directors.”
Jeffrey R. Charlton | Age 56 | |||
THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS
Senior Vice President and Corporate Controller (since June 2009)
Previous Nielsen Business Experience:
Mr. Charlton served as Nielsen’s Senior Vice President of Corporate Audit from November 2007 to June 2009.
Previous Business Experience:
Prior to joining Nielsen, Mr. Charlton spent 11 years at General Electric Company in senior financial management positions, including Senior Vice President Corporate Finance and Controller of NBCUniversal. Prior to joining General Electric Company, Mr. Charlton was employed by PepsiCo Inc. and began his career in 1983 with the public accounting firm of KPMG.
Eric J. Dale
Age 53
Chief Legal Officer (since August 2015)
Previous Business Experience:
Prior to joining Nielsen, Mr. Dale served for 13 years as a Partner at the law firm of Robinson & Cole LLP, where he chaired the firm’s Business Transactions Practice Group.
Public Company Directorship:
Mr. Dale is on the Board of Directors of Bankwell Financial Group, Inc. where he serves as the Chairperson of its Nominating and Governance Committee and as a member of its Audit, Asset Liability and Strategic Planning Committees.
Jamere Jackson
Age 49
Chief Financial Officer (since March 2014)
Previous Business Experience:
Prior to joining Nielsen, Mr. Jackson was the Vice President & Chief Financial Officer of GE Oil & Gas – Drilling & Surface. He joined General Electric Company in 2004 and held a variety of leadership roles in GE Corporate and GE Aviation before joining GE Oil & Gas. In 2013, he was named a GE Vice President and Company Officer. Prior to joining GE, Mr. Jackson held several roles in finance, mergers and acquisitions and strategic planning at The Procter & Gamble Company, Yum! Brands, Inc., First Data Corporation and Total System Services.
Public Company Directorship:
Mr. Jackson is on the Board of Directors of Eli Lilly and Company where he serves as a member of its Audit and Finance Committees.
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Nancy Phillips
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Previous Business Experience: Prior to joining Nielsen, Ms. Phillips was Executive Vice President of Human Resources at Broadcom Corporation from September 2014 until February 2016. From February 2010 to June 2014, Ms. Phillips held various human resources positions at Hewlett-Packard Company, most recently as Senior Vice President, Human Resources, Enterprise Services. Prior to joining Hewlett-Packard Company, from April 2008 to February 2010, Ms. Phillips was employed by Fifth Third Bancorp as Executive Vice President and Chief Human Resources Officer. Prior to that, Ms. Phillips spent 11 years at General Electric Company, holding various human resources and legal positions. | ||||
Giovanni Tavolieri
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Mr. Charlton has been the Senior Vice President and Corporate Controller of Nielsen (or its predecessor) since June 2009. Previously, Mr. Charlton had served as Nielsen’s Senior Vice President of Corporate Audit since joining the Company in November 2007. Prior to joining Nielsen, he spent 11 years with the General Electric Company in senior financial management positions, including Senior Vice President Corporate Finance and Controller of NBC Universal. Prior to joining GE, Mr. Charlton was employed by PepsiCo and began his career in 1983 with the public accounting firm of KPMG. He is a graduate of the University of Connecticut.
Age 49
Chief Technology & Operations Officer (since August 2017)
In addition to his current responsibilities, beginning in March 2018 Mr. Tavolieri began overseeing the U.S. Buy business.
Previous Business Experience:
Prior to his current role, Mr. Tavolieri spent the last ten years in various leadership roles of increasing responsibility at Nielsen, including most recently, as Global President, Operations from January 2016 to August 2017, and before that as Nielsen’s Executive Vice President, Operations from July 2014 to January 2016. Mr. Tavolieri began his career in 1992 with Nielsen Canada in commercial roles working with manufacturer and retail clients and left Nielsen in 2003 for a senior leadership role with Loblaw Companies Limited. He rejoined Nielsen in 2007.
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Mr. Cuminale has been the Chief Legal Officer of Nielsen (or its predecessor) since November 2006. Prior to joining Nielsen, Mr. Cuminale served for over ten years as the Executive Vice President – Corporate Development, General Counsel and Secretary of PanAmSat Corporation and PanAmSat Holding Corporation. In this role, Mr. Cuminale managed PanAmSat’s legal and regulatory affairs and its ongoing acquisitions and divestitures. Mr. Cuminale holds a Bachelor of Arts degree from Trinity College and a J.D. from Vanderbilt University Law School. He is on the Board of Fellows of Trinity College (since 2013) and the Board of Advisors at Vanderbilt University Law School (since 2011). On April 20, 2015, Mr. Cuminale informed us of his intention to resign as our Chief Legal Officer effective June 30, 2015.
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Ms. Finn has been the Chief Human Resources Officer of Nielsen since March 2011. Ms. Finn joined Nielsen in October 2007 as Senior Vice President – Human Resources, Global Leadership Development and in February 2010 was named Senior Vice President – Human Resources for the North America Buy business. Prior to Nielsen, Ms. Finn spent 26 years at GE principally in human resource positions. She is a 1982 graduate of Siena College, magna cum laude, with a Bachelor of Science degree in Finance.
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Mr. Hasker has been the Global President of Nielsen since August 2014. Before that, he was the President, Global Product Leadership since February 2013. Mr. Hasker joined Nielsen in November 2009 and served as President, Global Media Products and Advertiser Solutions until February 2013 where he led Nielsen’s TV and digital audience measurement, advertising effectiveness and social media solutions. Mr. Hasker was at McKinsey & Company from July 1998 through October 2009, and served as a partner of the firm in the Global Media, Entertainment and Information practice. Prior to McKinsey, Mr. Hasker spent five years in several financial roles in the U.S., Russia and Australia. Mr. Hasker has also been a board member of Global Eagle Entertainment, Inc. since April 2015. Mr. Hasker holds an undergraduate economics degree from the University of Melbourne, has an MBA and a Masters in International Affairs both with honors from Columbia University and is a member of the Australian Institute of Chartered Accountants.
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Mr. Jackson has been the Chief Financial Officer of Nielsen since March 2014. Prior to joining Nielsen, he was the Vice President & Chief Financial Officer of GE Oil & Gas – Drilling & Surface. He joined GE in 2004 and held a variety of leadership roles in GE Corporate and GE Aviation before joining GE Oil & Gas. In 2013, he was named a GE Vice President and Company Officer. Prior to joining GE, Mr. Jackson held several roles in finance, mergers and acquisitions and strategic planning at Procter & Gamble, Yum Brands (Pizza Hut), First Data Corporation and Total System Services. He received his undergraduate degree in Finance and Business Economics from the University of Notre Dame in 1990 and is a Certified Public Accountant.
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Mr. Kash has been a Vice Chairperson of Nielsen since January 2012. Mr. Kash is the founder of The Cambridge Group, a growth strategy consulting firm, which became a subsidiary of Nielsen in March 2009. He served as its Chairman from December 2010 until December 2011 and prior to that was its Chief Executive Officer. Mr. Kash is a member of the Washington Business Forum and serves on the board of directors of Northwestern Memorial Hospital. He is a graduate of DePaul University.
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Mr. Lewis has been the Global President of Nielsen since August 2014. Prior to that, Mr. Lewis was in various executive leadership roles of increasing responsibility at Nielsen, including, most recently, President, Americas with responsibility for leading Nielsen’s Watch and Buy growth strategy in Latin America as well as managing the business performance and strategic direction of Nielsen Buy in the United States and Canada. From 2006 to 2013, Mr. Lewis led Nielsen’s North America Buy business. Prior to this, he served in various executive roles both within and outside the Company. Mr. Lewis holds a Masters of business administration degree from Northwestern University’s Kellogg School of Management and an undergraduate degree in political science from Princeton University.
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Mr. West has been the Chief Operating Officer of Nielsen since March 2014. Prior to that, Mr. West was the Chief Financial Officer of Nielsen (or its predecessor) since February 2007. Prior to joining Nielsen, he was employed by the General Electric Company as the Chief Financial Officer of its GE Aviation division from June 2005. Prior to that, Mr. West held several senior financial positions across GE businesses, including NBC and Plastics. Mr. West is a veteran of GE’s financial leadership program and spent more than 16 years with GE. He is a 1991 graduate from Siena College with a degree in Finance and holds a Masters of Business Administration from Columbia University.
PROPOSAL NO. 6
Ratification of Independent Registered Public Accounting Firm
The Audit Committee has selected Ernst & Young LLP to serve as our independent registered public accounting firm for the year ending December 31, 2015.2018.
Although ratification of the selection of Ernst & Young LLP is not required by U.S. federal laws, the Board of Directors is submitting the selection of Ernst & Young LLP to our shareholders for ratification because we value our shareholders’ views on the Company’s independent registered public accounting firm. If our shareholders fail to ratify the selection, it will be considered as notice to the Board of Directors and the Audit Committee to consider the selection of a different firm. Even if the selection is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interestsinterest of the Company and our shareholders.
A representative of Ernst & Young LLP willis expected to be present at the Annual Meeting to answer appropriate questions and will have the opportunity to make a statement if he or she desires to do so.
In connection with the audit of the Company’s annual financial statements for the year ended December 31, 2014,2017, we entered into an agreement with Ernst & Young LLP which sets forth the terms by which Ernst & Young LLP performed audit services for the Company.
The following table presents fees for professional services rendered by Ernst & Young LLP and its affiliates for the audit of our financial statements for the years ended December 31, 20142017 and 20132016 and fees billed for other services rendered by Ernst & Young LLP and its affiliates forthem in those periods:years:
Year Ended December 31,
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2017
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Year Ended December 31, 2014 | Year Ended December 31, 2013 | |||||||||||||
Audit fees1 | $8,013,000 | $8,076,000 | $
| 8,468,200
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| 8,311,500
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Audit-related fees2 | 285,000 | 777,000 |
| 508,500
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| 317,000
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Tax fees3 | 370,000 | 504,000 |
| 323,000
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All other fees4 | 121,000 | 8,000 |
| 9,000
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Total | $8,789,000 | $9,365,000 | $
| 9,308,700
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| 8,918,293
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1 | Fees for audit services billed or expected to be billed in relation to the years ended December 31, |
2 |
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3 | Fees for tax services billed in the years ended December 31, |
4 |
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The Audit Committee considered whether providing thenon-audit services shown in this table was compatible with maintaining Ernst & Young LLP’s independence and concluded that it was.was compatible.
2018 PROXY STATEMENT 24 |
PROPOSAL NO. 6 – Ratification of Independent Registered Public Accounting Firm
AUDIT COMMITTEEPRE-APPROVAL POLICIES AND PROCEDURES
Subject to shareholder approval as may be required under Dutch law,the laws of England and Wales, the Audit Committee is directly responsible for the appointment and termination of the independent registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company. Each year the Audit Committee reviews the qualifications, performance and independence of our independent registered public accounting firm in accordance with regulatory requirements and guidelines. During 2017, in connection with the mandated rotation of the accounting firm’s lead engagement partner, the Audit Committee was directly involved in the selection of the firm’s new lead engagement partner.
In addition, and also subject to shareholder approval as may be required under the laws of England and Wales, the Audit Committee is responsible for the compensation, retention and oversight of any suchits independent registered public accounting firm, including the resolution of disagreements between management and such firm regarding financial reporting. In exercising this responsibility, the Audit Committeepre-approves all audit and permittednon-audit services provided by such firm. The Audit Committee has delegated to its Chairperson the independent registered public accounting firm, except thatauthority to review and pre-approve any such engagement or relationship, which may be proposed in between its regular meetings. Any such pre-approval is not necessary for minor non-audit services if: (i) the aggregate amount of all such non-audit services provided to the Company constitutes not more than 5% of the total amount of revenues paidsubsequently considered and ratified by the Company to its auditor during the year in which the non-audit services are provided; (ii) such services were not recognized by the CompanyAudit Committee at the time of the engagement to be non-audit services; and (iii) such services are promptly brought to the attention of the Committee and approved prior to the completion of the audit by the Committee or by one or more members of the Committee who are members of the Board of Directors to whom authority to grant such approvals has been delegated by the Committee.next regularly scheduled meeting. All of the services covered under “– Audit andNon-Audit Fees” werepre-approved by the Audit Committee.
The Audit Committee may form and delegate to subcommittees consisting of one or more of its members, when appropriate, the authority topre-approve services to be provided by the independent auditorsregistered public accounting firm so long as thepre-approvals are presented to the full Audit Committee at its next scheduled meeting.
![]() ![]() | The Board of Directors recommends that shareholders vote “FOR” the ratification of Ernst & Young LLP as |
The Audit Committee operates pursuant to a charter which is reviewed annuallyadopted by the Board of Directors. The Audit Committee.Committee reviews and assesses the adequacy of this charter annually and it was last amended in December of 2017. Additionally, a brief description of the primary responsibilities of the Audit Committee is included in this Proxy Statement/Prospectusproxy statement under “The Board of Directors and Certain Governance Matters – Committee Membership and Responsibilities – Audit Committee.”
In the performance of its oversight function, the Audit Committee reviewed and discussed the audited financial statements of the Company with management and with the independent registered public accounting firm. Discussions included, among other things:
Management represented to the Audit Committee that the Company’s consolidated financial statements as of and for the fiscal year ended December 31, 2017 were prepared in accordance with generally accepted accounting principles. The Audit Committee also discussed with management and Ernst & Young LLP the process used to support certifications by the Company’s CEO and CFO that are required by the SEC and the Sarbanes-Oxley Act of 2002 to accompany the Company’s periodic filings with the SEC and the process used to support management’s annual report on the Company’s internal controls over financial reporting.
2018 PROXY STATEMENT 25 |
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
The Audit Committee also discussed with the independent registered public accounting firm the matters required to be discussed by PCAOB Auditing Standard No. 16 “Communications with Audit Committees.”applicable Public Company Accounting Oversight Board (“PCAOB”) standards (Including significant accounting policies, alternative accounting treatments and estimates, judgments and uncertainties). In addition, the Audit Committee received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight BoardPCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and discussed with the independent registered public accounting firm their independence.
Based upon the review and discussions described in the preceding paragraph, the Audit Committee recommended to the Board that the audited financial statements of the Company be included in the Annual Report on Form10-K for the year ended December 31, 20142017 filed with the Securities and Exchange Commission.SEC.
Submitted by the Audit Committee of the Company’s Board of Directors:
Karen M. Hoguet (Chairman)(Chairperson)
Kathryn V. Marinello
Robert PozenDavid Rawlinson
Javier G. Teruel
February 19, 2015
2018 PROXY STATEMENT 26 |
PROPOSAL NO. 7
Appointment of Auditor for Our Dutch Annual Accounts
The Audit Committee has selected Ernst & Young Accountants LLP to serve as ourthe Company’s UK statutory auditor who will audit our Dutchthe Company’s UK Annual Report and Accounts to be prepared in accordance with the International Financial Reporting Standards, as adopted by the European Union (IFRS)(“IFRS”), for the year ending December 31, 2015.2018. As required by Dutchthe law of England and Wales, shareholder approval must be obtained for the selection of Ernst & Young Accountants LLP to serve as ourthe Company’s UK statutory auditor and to audit our Dutchhold office from the completion of the Annual Accounts forMeeting until the year ending December 31, 2015.end of the next annual general meeting of shareholders at which the Company’s UK statutory accounts will be presented.
Representatives of Ernst & Young Accountants LLP will attend the Annual Meeting to answer appropriate questions for the year ended December 31, 2014.2017. They will also have the opportunity to address the Annual Meeting if they desire to do so.
The affirmative vote of a majority of the votes cast at the Annual Meeting is required to appointpass this resolution to reappoint Ernst & Young Accountants LLP as ourthe Company’s UK statutory auditor who will audit our Dutch Annual Accounts foruntil the year ending December 31, 2015.
In the event Proposal No. 2 is approved by the requisite votenext annual general meeting of our shareholders and Nielsen-UK becomes the publicly-traded company of the Nielsen group before the end of 2015, we will not be required to prepare Dutch Annual Accounts for the year ending December 31, 2015.shareholders.
![]() ![]() | The Board of Directors recommends that the shareholders vote “FOR” the |
2018 PROXY STATEMENT 27 |
PROPOSAL NO. 8
ExtensionAs required under the laws of AuthorityEngland and Wales, the compensation of Ernst & Young LLP as the Board of DirectorsCompany’s UK statutory auditor must be fixed by the shareholders or in such manner as the shareholders may determine. Subject to Repurchase upErnst & Young LLP being reappointed as the Company’s UK statutory auditor pursuant to 10% of Our Issued Share Capital until December 26, 2016
Under Dutch law and our articles of association,Proposal No. 3, it is therefore proposed that the Board of Directors may, subject to certain Dutch statutory provisions,Audit Committee be authorized to repurchase our issued shares on our behalf in an amount, at prices and in the manner authorized by the general meeting of shareholders. Adoption of this proposal will allow usdetermine their compensation. Pursuant to have the flexibility to repurchase our shares without the expense of calling special shareholder meetings. Such authorization may not continue for more than 18 months, but may be given on a rolling basis. At the annual meeting of shareholders on May 6, 2014, the shareholders authorizedNielsen’s Audit Committee Charter, the Board of Directors to repurchase up to 10% of our issued share capital (including depositary receipts issued for our shares) in open market purchases, through privately negotiated transactions, or by means of self-tender offer or offers, at prices per share (or depositary receipt) ranging up to 110% of the market price at the time of the transaction. Suchhas delegated this authority currently expires on November 6, 2015.
The Board of Directors believes that we would benefit by extending the authority of the Board of Directors to repurchase our shares. For example, to the extent the Board of Directors believes that our shares may be undervalued at the market levels at which they are then trading, repurchases of our share capital (including depositary receipts issued for our shares) may represent an attractive investment for us. Such shares could be used for any valid corporate purpose, including use under our compensation plans, sale in connection with the exercise of outstanding options, or for acquisitions, mergers or similar transactions. The reduction in our issued capital resulting from any such purchases will increase the proportionate interest of the remaining shareholders in our net worth and whatever future profits we may earn. However, the number of shares repurchased (including depositary receipts issued for our shares), if any, and the timing and manner of any repurchases would be determined by the Board of Directors, in light of prevailing market conditions, our available resources and other factors that cannot be predicted now. The nominal value of the shares in our capital which we acquire, hold, hold as pledgee or which are acquired or held by one of our subsidiaries (including depositary receipts issued for our shares), may never exceed 50% of our issued share capital.
The Company has previously announced share buyback programs pursuant to repurchase authority granted at prior shareholder meetings.
In order to provide us with sufficient flexibility, the Board of Directors proposes that the general meeting of shareholders grant authority for the repurchase of up to 10% of our issued share capital (including depositary receipts issued for our shares) (or, based on the number of shares outstanding as of May 19, 2015, approximately 36,805,622 shares) on the open market, or through privately negotiated repurchases or in self-tender offers, at prices ranging up to 110% of the market price per share (or depositary receipt) at the time of the transaction. Such authority would extend for 18 months from the date of the Annual Meeting until December 26, 2016.Audit Committee.
The affirmative vote of a majority of the votes cast at the Annual Meeting is required to adopt the proposal to extend until December 26, 2016 the authorization of the Board of Directors to repurchase up to 10% of our issued share capital (including depositary receipts issued for our shares) on the open market, or through privately negotiated repurchases or self-tender offers, at prices per share or depositary receipt ranging up to 110% of the market price at the time of the transaction.
In the event Proposal No. 2 is approved by the requisite vote of shareholders and Nielsen-UK becomes the publicly-traded parent of the Nielsen group, Nielsen-UK will have the authority to repurchase shares as limited by and in accordance with applicable English law.approve this proposal.
![]() ![]() | The Board of Directors recommends that the shareholders vote “FOR” the |
2018 PROXY STATEMENT 28 |
PROPOSAL NO. 9
Non-Binding, Advisory Vote on Executive Compensation
In accordance with the requirements of Section 14A of the Securities Exchange Act (which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act)of 1934 (the ”Exchange Act”) and the related rules of the SEC, at the 20112017 annual general meeting of shareholders, we submitted to our shareholders anon-binding, advisory vote on executive compensation, as well as anon-binding, advisory vote on the frequency with which shareholders believed we should submit thenon-binding, advisory vote on executive compensation. A majority of the shareholders voted that thenon-binding, advisory vote on executive compensation should occur every three years. However, the Board of Directors subsequently decided to propose at each annual meeting of shareholders the approval of the compensation paid to the named executive officers.year. We are including in the Proxy Materialsproxy materials a separate advisory resolution regarding the compensation of our named executive officers as disclosed pursuant to the SEC rules. While the results of this vote arenon-binding and advisory in nature, the Board intends to carefully consider the results of this vote.them when considering our executive compensation program.
The language of the resolution is as follows:
“RESOLVED, THAT THE COMPENSATION PAID TO THE COMPANY’S NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THE PROXY STATEMENT/PROSPECTUSSTATEMENT PURSUANT TO THE SEC RULES, INCLUDING THE COMPENSATION DISCUSSION AND ANALYSIS, COMPENSATION TABLES AND ANY RELATED NARRATIVE DISCUSSION, IS HEREBY APPROVED.”
In considering their vote, shareholders may wish to review with care the information on the Company’s compensation policies and decisions regarding the named executive officers presented in “Executive Compensation – Compensation Discussion and Analysis.”
In particular, as discussed in “Executive Compensation – Compensation Discussion and Analysis,” shareholders should note the following:
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![]() | 2018 PROXY STATEMENT 29 |
NON-BINDING, ADVISORY VOTE ON EXECUTIVE COMPENSATION |
![]() | The Board of Directors recommends that shareholders vote “FOR” approval of the compensation of |
2018 PROXY STATEMENT 30 |
EXECUTIVE COMPENSATION The following discusses the compensation for our Named Executive Officers (“NEOs”): our Chief Executive Officer, each person who served as our Chief Financial Officer during 2014, and our three other most highly compensated executive officers for 2014, our “Named2017. Mitch Barns Chief Executive Officers” (“NEOs”).Officer Jamere Jackson Chief Financial Officer Steve Hasker Chief Operating Officer Eric Dale Chief Legal Officer Nancy philliph Chief Human Resources Officer
2018 PROXY STATEMENT 31 |
COMPENSATION DISCUSSION &AND ANALYSIS
Executive Summary
Executive SummaryChanges
Effective January 9, 2017, Nancy Phillips joined Nielsen isas our Chief Human Resources Officer with responsibility for Nielsen’s global HR strategy, including matters such as personnel engagement and development, compensation and benefits, and recruitment and retention.
Effective December 31, 2017, Steve Hasker resigned as our Global President and Chief Operating Officer. Pursuant to the terms of Mr. Hasker’s departure, no severance or other benefits were payable to Mr. Hasker, and all of his unvested equity was forfeited.
Business Overview
We are a leading global performance management company. The information and insightscompany that the company provides to clients covers more than 90 percent of the globe’s GDP and population and provides a comprehensive understanding of what consumers watch and what they buy and how those choices intersect. Our Watch segment providesWe deliver critical media and advertisingmarketing information, analytics and manufacturer and retailer expertise about what and where consumers buy (referred to herein as “Buy”) and what consumers read, watch and listen to (consumer interaction across the television, radio, print, online, digital, mobile viewing and listening platforms referred to herein as “Watch”) on a local and global basis. Our information, insights and solutions help our clients with an understandingmaintain and strengthen their market positions and identify opportunities for profitable growth. We have a presence in more than 100 countries and our services cover more than 90 percent of their totalthe globe’s GDP and population. We have significant investments in resources and associates all over the world, including in many emerging markets, and hold leading market positions in many of our services and geographies. Based on the strength of the Nielsen brand, our scale and the breadth and depth of our solutions, we believe we are the global leader in measuring and analyzing consumer behavior in the segments in which we operate.
We align our business into two reporting segments, Buy (consumer purchasing measurement and analytics) and Watch (media audience for contentmeasurement and advertising campaigns across all devices where content is consumed.analytics). Our Buy segment offersand Watch segments are built on an extensive foundation of proprietary data assets designed to yield essential insights for our clients to successfully measure, analyze and grow their businesses and manage their performance. The information from our Buy and Watch segments, when brought together, can deliver powerful insights into the effectiveness of branding, advertising and consumer packaged goods manufacturerschoice by linking media consumption trends with consumer purchasing data to better understand behavior and retailers the industry’s only global view of retail performance measurementbetter manage supply and demand as well as visibility into local market dynamics in 106 countries. When blending the Watch and Buy capabilities – including intelligence into marketing, advertising, media content, manufacturing, retail, consumption andspend, supply chain data, we provideissues, and much more. We believe these integrated insights better enable our clients to enhance the must-have, must-know informationreturn on audiences, brandsboth long-term and markets.short-term investments.
2018 PROXY STATEMENT 32 |
EXECUTIVE COMPENSATION |
Nielsen is dedicated to driving consistent performance through the cycles and has proven this commitmentshareholder value by posting solid operating performance and by reliably returning value to shareholders. In line with best in class compensation practices, the company’sperformance. The Company’s long-term business performance and progress against strategic initiatives form the context in which pay decisions are made. We have delivered resilient business performance with sustained growth over the last three years, and notably sustained solid growth in 2014, Mitch Barns’ first year as CEO, as presented below:years.
For 2014:2017:
• | Revenues up |
• | Adjusted EBITDA1 up 5.0% over prior year (4.3% on a constant currency basis) |
• | Normalized free cash flow1 down 8.3% over prior year |
1 | Please see Annex C for additional information and a reconciliation of Adjusted |
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EXECUTIVE COMPENSATION |
EXECUTIVE COMPENSATION
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NORMALIZED FREE CASH FLOW*** | ||||||||||||
($ in millions – as reported) | 2014 | 2013 | 2012 | |||||||||
Net cash provided by operating activities | $1,093 | $901 | $784 | |||||||||
Capital expenditures | (412) | (374) | (358) | |||||||||
Free Cash Flow | $681 | $527 | $426 | |||||||||
One-time Arbitron costs | — | 46 | ||||||||||
Normalized Free Cash Flow | $681 | $573 | $426 |
EXECUTIVE COMPENSATION
TOTAL SHAREHOLDER RETURN* (TSR)Total Shareholder Return1
The chart below shows the value of a $100 investment in Nielsen stock over the 2-yearathree-year period beginning December 31, 2014 and ending December 31, 2014. This period was selected to align with the introduction of our dividend policy and share repurchase program in 2013.2017. We have compared our performance to the S&P 500 and to a marketcap-weighted average composite of the peer group we use to benchmark TSR performance inmeasure relative total shareholder return under our Long-Term Performance Plan (“LTPP”) as described under (“–“– How Pay Decisions are Made – Long-Term Incentives (LTI) – Performance Restricted Stock Units Awarded Under the Long-Term Performance Plan (LTPP).”). While our 2014 TSR performance was essentially flat versus 2013, over the two-year period we have delivered more value for investors than a comparable investment in either of these benchmarks.
NIELSEN HOLDINGSplc—THREE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN
We define total shareholder return as the change in stock price over the |
2018 PROXY STATEMENT 34 |
EXECUTIVE COMPENSATION |
EXECUTIVE COMPENSATION
Strategic Framework
Three dimensions make up Nielsen’s strategic framework:
Business Performance Management
Independent, third-party measurement is more valuable than ever in today’s fast-changing, fragmenting world. In Watch, our focus is on ratings – currency-grade ratings that are comparable across all screens, devices, and platforms, measuring the Total Audience. In Buy, it’s sales and market share, providing both granular local viewsand consistent global views. We also help our clients improve their performance through analytics that leverage our measurement as well as other datasets. These analytics focus on things like increasing the ROI of advertising, maximizing the impact of a promotion budget, boosting new product success rates, and more.
Highlights for 2014:2017:
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Consumer Focus
We focus on measuring consumers and we follow them wherever they go. Consumers have more choice than ever before for what they watch and what and where they buy. For Nielsen it means more things to measure.
We take on the challenge of measuring the consumer across every part of the market – the easier and more efficient partsand the more difficult parts. This is what sets us apart from our competitors.
Highlights for 2014:
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Global Presence
Our global footprint – currently at 106 countries – is unrivaled. This footprint is a significant advantage for our company. In addition to providing us an impressive access to talent and innovation from all over the world, it gives us access to a diverse client base – global players as well as the emerging local and regional players, especially in Asia. This diversity of clients is another unique Nielsen strength.
Developed Buy revenue in 2018 contributed to a decline in our share price toward the end of the year versus the beginning of the year. |
EXECUTIVE COMPENSATION
Highlights for 2014:
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Executive Compensation Overview
Nielsen’s executive compensation program is designed to incent and reward our leadership team to deliver sustainedsustainable growth and financial performance andwhile delivering long-term shareholder value.
Key considerations in 20142017 were:
Say2017 Advisory Vote on PayExecutive Compensation
In 2014, 77% of2017, our shareholders voted to approveoverwhelmingly supported Nielsen’s executive compensation program with more than 98% of the votes cast at our annual general meeting of shareholders affirming our executive compensation program (onon an advisory basis). We reviewed our compensation programs with shareholders following the publication of the proxy advisory reports, and following the shareholder vote the Compensation Committee conducted an extensive review of our programs with a view towards ensuring continued alignment with shareholders. We have taken the following actions:basis.
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• Targets are carefully designed to be aggressive and achievable
We increased the rigor of our long-term performance incentive plan effective 2015
• Payouts under the relative TSR component are capped in the event that absolute TSR is negative
EXECUTIVE COMPENSATION |
Throughout 2017, we continued regular outreach to our shareholders to discuss topics including Company performance, our executive compensation program, and how we disclose information in our proxy statement. Each meeting was led by the Chairperson of the Board and resulted in valuable feedback that we used to, among other things, formulate design changes to our incentive plans in 2018. We continue to strive to keep our programs simple and focused on meaningful performance metrics. For more information on Nielsen’s shareholder outreach program, please refer topage 15.
Meritocracy
OurNielsen has a strong culture ofpay for performance philosophy differentiates rewards based onwhich serves to align Company goals and performance with pay outcomes for the Company’s executives. Nielsen conducts quantitative assessments of business financial performance and also evaluates individual contributions towards core objectives.key business objectives in order to differentiate rewards. NEOs participate in the same performance assessment process applicable to all managerial employees, including an annual performance appraisal and semi-annual individual peer rankings of performance and leadership impact.
Total Company Performance
We strive to create aNielsen’s culture that reflects our core values of Open, Simple,open, connected, useful, and Integrated.personal. Our compensation programs reinforce the values by focusingconnecting all of our employees on simple, unifyingto core business objectives. To that end,Our NEOs participate in the same annual cash incentive plan applicable to all managerial employees, which is funded based on companyCompany AIP Adjusted EBITDA performance (which funding level is referred to as the “Bonus Funding EBITDA”) which we define on page 101.described under “– How Pay Decisions are Made – Annual Incentive Plan.” Additionally, NEOs’ performance assessments and pay decisions are influenced by our total companyCompany performance versusagainst our financial objectives (see “– 20142017 Pay Decisions and Performance – Financial”Total Company Financial Performance”) andas well as specific individual business financial objectives where appropriate.objectives.
Pay Competitively
Paying competitively is a hallmark of Nielsen’s compensation programs. The Compensation Committee reviews each NEO’s compensation annually and considers several factors when making pay decisions:
1. | Total direct compensation, which consists of base salary, annual cash incentives and long-term incentives, is benchmarked against executives serving in similar roles within a peer group of companies selected for their business relevance and size appropriateness to Nielsen; |
2. | Total direct compensation is aimed at a value around the median of our peer group, but strong individual performance and leadership impact may result in above median pay; |
3. |
EXECUTIVE COMPENSATION
4. | Other factors reviewed include changes in role or responsibilities, Company financial performance, and individual performance. |
Variable Pay atis At Risk
ANielsen’s compensation programs are designed so that a significant portion of each NEO’s compensation isat risk; meaning that the compensation is dependent on the achievement of challenging annual and long-term performance targetsgoals and/or the performance of our share price as laid out in the charts and tables below. At risk compensation is composed of annual cash incentive awards and equity-based awards and does not include fixed pay such as base salary. In 2017, short-term pay (composed of base salary and annual cash incentive) was delivered 100% in cash. Long-term pay ishas historically been delivered exclusively in the form of equity to align with shareholder value. Short-term pay is delivered mostly in cash but 25%the interests of the annual incentive is delivered in restricted stock units (“RSUs”) that are subject to vesting over two years.NEOs with the creation of value for our shareholders. In 2017, long-term pay consisted solely of equity-based awards.
2018 PROXY STATEMENT 36 |
EXECUTIVE COMPENSATION |
CEO 2014COMPENSATION STRUCTURE 2017
Other NEOs 2014*
Elements of Total Direct Compensation | 2017 | ||||||||
CEO | Proportion of pay subject to specific quantitative performance criteria | 53% | |||||||
Proportion of pay at risk | 90% | ||||||||
Proportion of pay delivered in the form of equity | 73% |
OTHER NEOs COMPENSATION STRUCTURE 20171
Elements of Total Direct Compensation | 2017 | |||||||
NEOs | Proportion of pay subject to specific quantitative performance criteria | 49% | ||||||
Proportion of pay at risk | 79% | |||||||
Proportion of pay delivered in the form of equity | 59% |
1 | Excludes the $325,000 cash payment made to Mr. Jackson in February 2017 pursuant to the terms of his offer letter dated February 20, 2014 to compensate him for the loss of his unvested Supplemental Executive Retirement Plan (“SERP”) benefit from his previous employer (see footnote 1 to the Summary Compensation Table). |
2018 PROXY STATEMENT 37 |
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION |
Executive Compensation Elements
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| How Component Operates | ||||||||
Annual Base Salary | Attract and retain top talent | • Reviewed in intervals of24-36+ months • When reviewing base salary levels, the Compensation Committee considers a variety of factors including: (1) our pay for performance philosophy, (2) peer group market benchmark compensation data, (3) the NEO’s individual performance and contributions to the success of the business in the prior year, (4) Company performance, (5) current pay mix, and (6) role changes | ||||||||
Annual Incentive Plan (“AIP”) | Motivate | • Annual incentive target opportunities are established each year at the beginning of the performance period with reference to (1) our pay for performance philosophy, (2) peer group benchmarking and general market survey data, (3) the NEO’s individual performance and contributions to the success of the business in the prior year, (4) Company performance, (5) current pay mix, (6) role changes, and (7) prior year target • • The AIP Adjusted EBITDA performance formula • 100% AIP Adjusted EBITDA performance to target = 100% AIP pool funding and 100% initial individual payout • The initial payout percentage may be adjusted up or down based on a quantitative assessment of individual performance vs objectives • Maximum payout opportunity is capped at 200% of individual target • Threshold AIP Adjusted EBITDA performance results in an initial payout/funding of 70% • Zero funding and zero initial payout if AIP Adjusted EBITDA performance is below threshold • • • • Annual incentive plan payouts are then made according to the underlying AIP Adjusted EBITDA performance formula, subject to both the maximum of 2% of Adjusted EBITDA and 200% of target cap on payouts • The calculation of AIP Adjusted EBITDA performance for annual incentive funding purposesre-calculates Adjusted EBITDA as defined in our Annual Report on Form 10-K for the corresponding performance period to eliminate the impact of foreign currency on the year’s performance using a standard exchange rate established at the beginning of the performance period • Payouts are | ||||||||
Long-Term Incentive | Deliver long-term sustainable performance and align executive rewards with long-term returns delivered to shareholders | • LTI award values are determined each year by reference to (1) our pay for performance philosophy, (2) peer group benchmarking and general market survey data, (3) the NEO’s individual performance and contributions to the success of the business in the prior year, (4) Company performance, (5) current pay mix, (6) role changes, and (7) prior year award | ||||||||
| Alignment with long-term shareholder return | • Subject to performance against twothree-year cumulative performance metrics, free cash flow and relative total shareholder return, with assigned weighting of 60% and 40%, respectively • | ||||||||
• • Payouts are subject to recoupment under the terms of Nielsen’s clawback policy (see below under “– Other Policies and Guidelines – Clawback Policy”) • Relative total shareholder return is measured against a peer group used solely for this purpose. Companies in this peer group are selected to represent a comparable investment profile to Nielsen by virtue of their being in comparable businesses or being representative of the markets we serve • Zero payout for performance below threshold • • Payouts capped at target if absolute • No dividend equivalents accrue on unearned • Details regarding the PRSUs are described under “– How Pay Decisions are Made – Long-Term Incentives (LTI) – Performance Restricted Stock Units Awarded Under the Long-Term Performance Plan (LTPP)”
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Restricted Stock Units (“RSUs”) | Alignment with shareholder return and retention | • Time-based equity is delivered in RSUs (versus split evenly between RSUs and stock options) • Four-year • • Dividend-equivalents on RSU awards are accrued and delivered as additional RSUs to the extent the underlying RSUs vest
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Health and Welfare Plans,
| Promote | • Health and Welfare plans generally available to other employees • De minimis financial planning and |
Summary of NEO Pay Decisions
Mr. Barns was appointed to serve as Chief Executive Officer effective January 1, 2014. Mr. Barns has been an employee of Nielsen since 1997 and has been in the industry since 1985. He has held leadership roles in both developed and developing markets on three different continents, and has led teams within both our Buy and Watch business segments. His leadership has driven added value for our clients and shareholders while building our talent base for the future.
As a result of Mr. Barns’ promotion and to reflect his additional responsibilities, the Compensation Committee approved the following compensation:
Short-Term compensation
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EXECUTIVE COMPENSATION |
Summary of NEO Pay Decisions
CEO
Mr. Barns has served as our CEO since January 1, 2014. Following its annual review of Mr. Barns’ compensation, the Compensation Committee made no changes to his base salary and annual incentive target, but increased his long-term incentive target from $7,000,000 to $7,500,000 for 2017 in order to better align Mr. Barns’ total direct compensation for 2017 with the median compensation level for CEOs in our executive compensation peer group described under “— Compensation Practices and Governance — Benchmarking.” Details of Mr. Barns’ compensation are set out in the tables below.
2016 Actual
| 2017 Target1
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Base Salary |
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$1,000,000 |
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N/A |
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$1,000,000 |
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0% | ||||
Annual Incentive |
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$1,700,000 |
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$2,000,000 |
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$1,700,000 |
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0% | ||||
Long-Term Incentive |
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$6,500,000 |
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$7,500,000 |
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$7,500,000 |
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15.4% |
1 | The amount under “2017 Target” represents the amount intended to be granted to, earned by and paid to the executive. The amount under “2017 Actual” represents the amount actually granted to, earned by and paid to the executive. The amount for “Long-Term Incentive” is the value of the grant based on the closing price of our common stock on NYSE on the grant date. The value reported in the Summary Compensation Table may differ slightly, as that represents the accounting grant date value. As to the PRSU portion of the “Long-Term Incentive,” the amount included above assumes target |
2 | Actual payout was |
3 | In 2016, Mr. Barns received grants valued at $6,500,000 against a target of $7,000,000. |
In 2017, Mr. Barns was granted the following long-term incentive equity awards:
Grant Date
| Grant Type
| # RSUs
| Value1
| Performance Period
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February 16, 2017 |
PRSUs |
83,613 |
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$3,750,000 |
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2017 - 2019 | ||||
November 13, 20172 |
RSUs |
103,677 |
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$3,750,000 |
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N/A |
1 | This is the value intended to |
2 | Vesting of these awards will occur in four equal annual installments beginning on October 18, 2018 and ending October 18, 2021. |
Long-Term Incentive (“LTI”)Other NEOs
Jamere Jackson
Mr. Jackson has served as Chief Financial Officer since March 10, 2014. Following its annual review of Mr. Jackson’s compensation, the Compensation Committee made no changes in 2017. Details of Mr. Jackson’s compensation are set out in the tables below.
2016 Actual
| 2017 Target1
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Base Salary |
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$ 750,000 |
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N/A |
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$ 750,000 |
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0% | ||||
Annual Incentive |
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$ 680,000 |
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$ 800,000 |
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$ 680,000 |
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0% | ||||
Long-Term Incentive |
|
$2,375,000 |
3 |
|
$2,550,000 |
|
|
$2,550,000 |
|
7.4% |
1 | The amount under “2017 Target” represents the amount intended to be granted to, earned by and paid to the executive. The amount under “2017 Actual” represents the amount actually granted to, earned by and paid to the executive. The amount for “Long-Term Incentive” is the value of the grant based on the closing price of our common stock on NYSE on the grant date. The value reported in the Summary Compensation Table may differ slightly, as that represents the accounting grant date value. As to the PRSU portion of the “Long-Term Incentive,” the amount included above assumes target level achievement. |
2 | Actual payout was based on the Company’s financial performance and Mr. Jackson’s individual performance, each during 2017. |
3 | In 2016, Mr. Jackson received grants valued at $2,375,000 against a target of $2,550,000. |
In 2017, Mr. Jackson was granted the following long-term incentive equity awards:
Grant Date
| Grant Type
| # RSUs/Options
| Value1
| Performance Period
| ||||||
February 16, 2017 |
PRSUs |
28,429 |
|
$1,275,000 |
|
2017 - 2019 | ||||
November 13, 20172 |
RSUs |
35,250 |
|
$1,275,000 |
|
N/A |
1 | This is the value intended to be granted by the Compensation Committee based on the closing price of our common stock on the grant date. Actual accounting grant date values reported in “Tables and Narrative Disclosure” will differ slightly. As to the PRSUs, the amount reflected above assumes target level achievement. |
2 | Vesting of these awards will occur in four equal annual installments beginning on October 18, 2018 and ending October 18, 2021. |
2018 PROXY STATEMENT 39 |
EXECUTIVE COMPENSATION |
Steve Hasker
Mr. Hasker served as Global President and Chief Operating Officer, with global leadership responsibility for global client service and product leadership across our Watch and Buy businesses from January 1, 2016 to December 31, 2017. Following its annual review of Mr. Hasker’s compensation, the Compensation Committee made no changes in 2017. Details of Mr. Hasker’s compensation are set out in the tables below.
2016 Actual
| 2017 Target1
| 2017 Actual1
| % Change from 2016
| |||||||||||
Base Salary
|
| $ 900,000
|
|
| N/A
|
|
| $ 900,000
|
| 0%
| ||||
Annual Incentive
|
| $ 935,000
|
|
| $1,100,000
|
|
| $ 935,000
| 2
| 0%
| ||||
Long-Term Incentive
|
| $2,800,000
| 3
|
| $3,000,000
|
|
| $3,000,000
| 4
| 7.1% |
1 | The amount under “2017 Target” represents the amount intended to be granted to, earned by and paid to the executive. The amount under “2017 Actual” represents the amount actually granted to, earned by and paid to the executive. The amount for “Long-Term Incentive” is the value of the grant based on the closing price of our common stock on NYSE on the grant date. The value reported in the Summary Compensation Table may differ slightly, as that represents the accounting grant date value. As to the PRSU portion of the “Long-Term Incentive,” the amount included above assumes target level achievement. |
2 | Actual payout was based on the Company’s financial performance and Mr. Hasker’s individual performance, each during 2017. |
3 | In 2016, Mr. Hasker received grants valued at $2,800,000 against a target of $3,000,000. |
4 | This equity was forfeited in connection with Mr. Hasker’s departure from the Company. |
In 2017, Mr. Hasker was granted the following long-term incentive equity awards:
Grant Date
| Grant Type
| # RSUs/Options
| Value1
| Performance Period
| ||||||||||
February 16, 20172
|
| PRSUs
|
|
| 33,445
|
|
| $1,500,000
|
| 2017 - 2019
| ||||
November 13, 20172
|
| RSUs
|
|
| 41,471
|
|
| $1,500,000
|
| N/A |
1 | This is the value intended to be granted by the Compensation Committee based on the closing price of our common stock on the grant date. Actual accounting grant date values reported in “Tables and Narrative Disclosure” will differ slightly. As to the PRSUs, the amount reflected above assumes target level achievement. |
2 | Due to Mr. Hasker’s resignation on December 31, 2017, he forfeited all RSUs and PRSUs subject to these grants. |
Eric J. Dale
Mr. Dale has served as Chief Legal Officer since August 1, 2015. Following its annual review of Mr. Dale’s compensation, the Compensation Committee made no changes in 2017. Details of Mr. Dale’s compensation are set out in the tables below.
2016 Actual
| 2017 Target1
| 2017 Actual1
| % Change from 2016
| |||||||||||
Base Salary
|
| $ 750,000
|
|
| N/A
|
|
| $ 750,000
|
| 0%
| ||||
Annual Incentive
|
| $ 675,000
|
|
| $ 750,000
|
|
| $ 675,000
| 2
| 0%
| ||||
Long-Term Incentive
|
| $1,200,000
|
|
| $1,200,000
|
|
| $1,200,000
|
| 0%
|
1 | The amount under “2017 Target” represents the amount intended to be granted to, earned by and paid to the executive. The amount under “2017 Actual” represents the amount actually granted to, earned by and paid to the executive. The amount for “Long-Term Incentive” is the value of the grant based on the closing price of our common stock on NYSE on the grant date. The value reported in the Summary Compensation Table may differ slightly, as that represents the accounting grant date value. As to the PRSU portion of the “Long-Term Incentive,” the amount included above assumes target level achievement. |
2 | Actual payout was based on the Company’s financial performance and Mr. Dale’s individual performance, each during 2017. |
In 2017, Mr. Dale was granted the following long-term incentive equity:
Grant Date
| Grant Type
| # RSUs/Options
| Value1
| Performance Period
| ||||||||||
February 16, 2017
|
| PRSUs
|
|
| 13,378
|
|
| $600,000
|
| 2017 - 2019
| ||||
November 13, 20172
|
| RSUs
|
|
| 16,588
|
|
| $600,000
|
| N/A
|
1 | This is the value intended to be granted by the Compensation Committee based on the closing price of our common stock on the grant date. Actual accounting grant date values reported in “Tables and Narrative Disclosure” will differ slightly. As to the PRSUs, the amount reflected above assumes target level achievement. |
2 | Vesting of these awards will occur in four equal annual installments beginning on October 18, 2018 and ending October 18, 2021. |
2018 PROXY STATEMENT 40 |
EXECUTIVE COMPENSATION |
Nancy Phillips
Ms. Phillips has served as Chief Human Resources Officer since January 9, 2017. Details of Ms. Phillips’ compensation are summarized in the tables below:
| 2017 Target1 | 2017 Actual1 | % Change from 2016 | |||||||||||
Base Salary | N/A | N/A | $ 480,769 | 2 | N/A | |||||||||
Annual Incentive | N/A | $ 500,000 | $ 450,000 | 3 | N/A | |||||||||
Long-Term Incentive | N/A | $1,300,000 | $1,300,000 | N/A |
|
2 | Amount reflects a partial year payment based on her start date. |
3 | Actual payout was based on the Company’s financial performance and Ms. Phillips’ individual performance each during 2017. |
In 2017, Ms. Phillips was granted the following long-term incentive equity awards:
Grant Date
| Grant Type
| # RSUs/Options
| Value1
| Performance Period
| ||||||||
February 16, 2017
| PRSUs
|
| 14,493
|
| $
| 650,000
|
| 2017 - 2019
| ||||
November 13, 20172
| RSUs
|
| 17,971
|
| $
| 650,000
|
| N/A
|
1 | This is the value intended to be granted by the Compensation Committee based on the closing price of our common stock on the grant date. Actual accounting grant date values reported in “Tables and Narrative Disclosure” will differ slightly. As to the PRSUs, the amount reflected above assumes target level achievement. |
2 | Vesting of these awards will occur in four equal annual installments beginning on October 18, 2018 and ending October 18, 2021. |
PRSU Payouts Under the 2015 LTPP
The performance period for our 2015 LTPP ended on December 31, 2017. PRSU grants under this plan were made in February 2015 and their grant date fair value was disclosed in our 2016 proxy statement. In February 2018, the Compensation Committee approved performance and payouts under this plan as outlined in the table below. The Compensation Committee noted that the plan had functioned as intended in aligning NEO pay to the cumulative performance of the business over the three-year period.
2015 LTPP Performance
Plan Metrics Jan 1, 2015 – Dec 31, 2017
| Final Results Based on Performance from Jan 1, 2015 – Dec 31, 2017
| |||||||||||
Elements
| Performance Target for
| Result
| Weight
| Payout Percentage
| ||||||||
Free Cash Flow1
| $2.76 billion
| $2.721 billion
| 60%
| 98.59%
| ||||||||
Relative Total Shareholder Return
| 50th Percentile
| 4th Percentile
| 40%
| 0%
| ||||||||
Total Shares
| N/A
| N/A
| 100%
| 59.15%
|
2 | The relative total shareholder return LTPP performance measure is the change in our stock price over the three-year performance period, assuming monthly reinvestment of dividends, compared to that of a peer group of companies. |
|
|
Based on the committee’s full year performance assessment Mr. Barns was awarded an annual incentive payout of $1,820,000, of which 75% was paid in cash and 25% was paid in annual incentive RSUs which will vest in equal annual installments over two years.
EXECUTIVE COMPENSATION |
EXECUTIVE COMPENSATION
Other NEOs2015 LTPP Payouts
Jamere Jackson
Effective March 10, 2014, we hired a Chief Financial Officer, Jamere Jackson, to succeed Mr. West. Mr. Jackson’s base salary was set at $700,000 and his 2014 annual incentive opportunity set at $ 700,000. Under the terms of his offer, Mr. Jackson was granted, on March 10, 2014, 20,000 performance RSUs under our LTPP covering the period 2014-2016, and on October 29, 2014, 65,000 stock options and 11,000 RSUs, having a combined value of $1,954,064 in line with the target values approved by the Compensation Committee. Based on the committee’s full year performance assessment Mr. Jackson was awarded an annual incentive payout of $750,000, of which 75% was paid in cash and 25% was paid in annual incentive RSUs which will vest in equal annual installments over two years. Additionally, the Compensation Committee awarded Mr. Jackson 81,081 RSUs in order to compensate him for the loss of unvested equity at his prior employer and approved a cash payment of $2,600,000 to compensate him for the loss of his unvested supplemental executive retirement plan benefits (“SERP”) which would have been earned if he had continued in employment with his prior employer. Mr. Jackson received 50% of the cash payment, equal to $1,300,000, upon hire, which must be repaid in full if his employment terminates within the first year of his employment and 50% of this amount must be repaid if his employment terminates during the following year, unless such termination is not for “cause” or for “good reason”. The remaining portion of the cash payment will be paid in four equal annual installments of $325,000, commencing on the first anniversary of his hire date as long as he is an employee on the applicable hire anniversary. Mr. Jackson is required to repay each installment in full if his employment terminates within one year of receipt of each installment unless such termination is not for “cause” or for “good reason”.
Brian West
Mr. West was Chief Financial Officer until March 10, 2014, when he was appointed Chief Operating Officer. As a result of his promotion, his base salary, which had remained flat since 2011, was increased 12% to $950,000, and his 2014 annual incentive opportunity set at $1,750,000. Mr. West was granted, on February 20, 2014, 38,000 performance RSUs under our LTPP covering the period 2014-2016, and on October 29, 2014, 122,500 options and 20,700 RSUs, having a combined value of $3,703,318 in line with the target value approved by the Compensation Committee. Based on the Committee’s full year performance assessment Mr. West was awarded an annual incentive payout of $1,800,000 of which 75% was paid in cash and 25% was paid in annual incentive RSUs which will vest in equal annual installments over two years
Stephen Hasker
In 2014, Mr. Hasker was appointed Global President, with global leadership responsibility for our Product Leadership function and our US Watch business. His base salary, which had remained flat since 2011 was increased by 13% to $900,000 to reflect his additional responsibilities and his 2014 annual incentive target opportunity was set at $900,000. He was granted, on February 20, 2014, 20,100 performance RSUs under the LTPP covering the period 2014-2016 and on October 29, 2014, 65,000 stock options and 11,000 RSUs, having a combined value of $1,962,515 in line with the target values approved by the Compensation Committee. Based on the Committee’s full year performance assessment Mr. Hasker was awarded an annual incentive payout of $950,000, of which 75% was paid in cash and 25% was paid in annual incentive RSUs which will vest in equal annual installments over two years.
John Lewis
In 2014 Mr. Lewis was appointed Global President, with global leadership responsibility for our Client Service function and our Consumer Packaged Goods vertical. His base salary was increased by 10% to $770,000 effective August 1, 2014 to reflect his additional responsibilities and his 2014 annual incentive target set at $820,000. He was granted, on February 20, 2014, 19,600 performance RSUs under the LTPP covering the period 2014-2016 and, on October 29, 2014, 70,000 stock options and 11,800 RSUs, having a combined value of $2,008,197 in line with the target value approved by the Compensation Committee. Based on the Committee’s full year performance assessment Mr. Lewis was awarded an annual incentive payout of $750,000, 75% of which was paid in cash and 25% was paid in annual incentive RSUs, which will vest in equal annual installments over two years.
James Cuminale
Mr. Cuminale has been our Chief Legal Officer since 2006. His base salary of $700,000 has remained flat since 2012 and his 2014 annual incentive target is $925,000. He was granted, on February 20, 2014, 16,300 performance-based RSUs under the LTPP covering the period 2014-2016 and on October 29, 2014, 52,500 options and 8,900 RSUs, having a combined value of $1,589,056 in line with the target value approved by the Compensation Committee. Based on the committee’s full year performance assessment Mr.Cuminale was awarded an annual incentive payout of $930,000, of which 75% was paid in cash and 25% was paid in annual incentive RSUs that will vest in equal annual installments over two years.
Target PRSUs Awarded
| Payout
| Vested and Delivered in Shares
| ||||||||
Mitch Barns
|
| 65,860
|
| 59.15%
|
| 38,956
|
| |||
Jamere Jackson
|
| 20,860
|
| 59.15%
|
| 12,338
|
| |||
Steve Hasker
|
| 20,310
|
| 59.15%
|
| 12,013
|
| |||
Eric Dale
|
| 12,513
|
| 59.15%
|
| 7,401
|
| |||
Nancy Phillips1
|
| N/A
|
| N/A
|
| N/A
|
|
1 |
EXECUTIVE COMPENSATION
Realizable Pay
A significant portion of executive pay is at risk depending“at risk” and depends on business performance and market conditions. The actual pay earned during the year either as cash or made available via thethrough vesting of stockpreviously granted equity awards during the year is considered thereferred to as “realizable pay.” Realizable pay is different from the amounts reported in the Summary Compensation Table, (as shown under “– Tables and Narrative Disclosure – Summary Compensation Table”), which uses the accounting grant date opportunity value offor equity awards.
We define realizable pay as:for any given year as the sum of:
|
|
|
|
|
The table below presents the realizable pay for each of our Named Executive Officers inNEOs for 2016 and 2017 and shows the period stated compared to thetotal amount of compensation reported for each of our NEOs in the Summary Compensation Table.Table for 2017.
Realizable Pay* | Total Compensation in Summary Compensation Table* | |||||||||||||||||||||
2013 | 2014 | | Percentage Increase/(Decrease) | | 2014 | | Percent Variance to 2014 Realizable Pay | | ||||||||||||||
Mitch Barns | $ 2,458,720 | $3,813,777 | 55 % | $ 6,957,892 | 82 % | |||||||||||||||||
Jamere Jackson** | N/A | $2,427,885 | N/A | $8,250,125 | 240 % | |||||||||||||||||
Brian West | $4,761,556 | $4,258,139 | (11 %) | $6,392,431 | 50 % | |||||||||||||||||
Stephen Hasker | $3,037,289 | $3,753,249 | 24 % | $3,798,990 | 1 % | |||||||||||||||||
John Lewis | $3,255,831 | $2,736,003 | (16 %) | $3,549,573 | 30 % | |||||||||||||||||
James Cuminale | $4,251,697 | $2,657,273 | (38 %) | $3,247,796 | 22 % |
Realizable Pay
| Total Compensation in Summary
| |||||||||||||||||||||||
2016
| 2017
| Percentage
| 2017
| Percent Variance to 2017 Realizable Pay4
| ||||||||||||||||||||
Mitch Barns1
| $
| 6,238,553
|
| $
| 5,509,179
|
|
| (12%)
|
| $
| 10,202,194
|
|
| 85%
|
| |||||||||
Jamere Jackson2,3
| $
| 2,950,664
|
| $
| 3,431,015
|
|
| 16%
|
| $
| 4,302,046
|
|
| 25%
|
| |||||||||
Steve Hasker1
| $
| 4,740,829
|
| $
| 3,480,419
|
|
| (27%)
|
| $
| 4,845,071
|
|
| 39%
|
| |||||||||
Eric J. Dale2
| $
| 1,506,575
|
| $
| 1,602,817
|
|
| 6%
|
| $
| 2,642,874
|
|
| 65%
|
| |||||||||
Nancy Phillips
|
| N/A
|
| $
| 943,591
|
|
| N/A
|
| $
| 2,510,230
|
|
| 166%
|
|
The realizable pay value for Messrs. Jackson and Dale increased in 2017 primarily due to an additional tranche of equity vesting in accordance with the normal vesting schedule. |
3 | The Summary Compensation Table value |
The increase in realizable pay for Mr. Barns was mainly due to the increases made to his base salary and annual cash incentive upon his promotion to CEO.
4 | In all cases, the realizable pay in 2017 is significantly lower than the values disclosed in the Summary Compensation Table. |
2018 PROXY STATEMENT 42 |
EXECUTIVE COMPENSATION |
NEO Compensation Practices
What we do
What We Do | What We Don’t Do | |
✓Emphasize long-term equity in prospective pay increases |
|
|
✓ Specify maximum payout thresholds on all individual awards granted under our AIP
|
|
|
|
|
What we don’t do
|
EXECUTIVE COMPENSATION
|
|
20142017 Pay Decisions and Performance
Total Company Financial Performance
Metric
| Target
| Result
| ||
Adjusted EBITDA growth % over prior year at constant currency1
| 5.5%
| 4.3%
| ||
Revenue growth at constant currency1
| 4.0%
| 3.8%
| ||
Free Cash Flow
| ~$900MM
| $863MM
|
| ||||
| ||||
|
We calculate constant currency percentages by converting our prior-period local currency financial results using the current period foreign currency exchange rates and comparing these adjusted amounts to our current period reported results. |
CEO Performance Assessment for Mitch Barns
The Committee considered Bonus Funding EBITDA, total company revenue and free cash flow performance as presented above and Mr. Barns’ performance against objectives as presented below to arrive at their final performance assessment.
Objectives
Commercial Growth
Commercial growth met operating plan objectives as follows:
Total company growth
Revenues for the full year increased 10.3% to $6,288 million, or 12.4% on a constant currency basis compared to 2013. Revenues, excluding the impact of the Arbitron and Harris acquisitions, increased 2.4%, or 4.5% on a constant currency basis in line with expectations
Business segment growth
Revenues within the Buy segment grew 3.4%, or 6.3% on a constant currency basis, to $3,523 million in line with expectations. Excluding Harris, Buy revenues grew 3.6% on a constant currency basis, driven largely by new client wins and 9.5% growth in emerging markets.
Revenues within the Watch segment increased 20.4%, or 21.3% on a constant currency basis, to $2,765 million in line with expectations. Excluding Arbitron, Watch revenues increased 4.9%, or 5.8% on a constant currency basis, driven by continued strength in Audience Measurement, including Digital, and Marketing Effectiveness.
Delivered growth in strategically important areas, at or above expectations. Marketing Effectiveness (connecting consumer advertising exposure with subsequent purchasing behavior) delivered double-digit growth and in emerging markets we accelerated growth to 9.5% (from 7% in 2013).
Client wins
Several client wins in 2014 represent a significant achievement and will provide positive momentum in 2015 and beyond.
Strategy and Initiatives
Total audience
Delivered strongly against our critical objective to measure the “total audience” on all devices wherever and whenever content is consumed. We launched several new measurement capabilities on schedule: Mobile Online Campaign Ratings (mOCR) to measure advertising exposure on mobile devices, Mobile TV Ratings to measure exposure to advertising within TV content on mobile devices, and Digital Content Ratings for measuring audiences for digital content by closing a partnership with Adobe. Additionally, the market penetration of our Online Campaign Ratings (OCR) metric continued to progress and is now the preferred digital advertising metric for the vast majority of the top 25 US
EXECUTIVE COMPENSATION
advertisers. In our audio measurement business, we successfully completed the integration of our 2013 Arbitron acquisition, achieved our cost synergy goals, and introduced new capabilities and product enhancements to the market.
Expand coverage
We made good progress against our objective to provide full measurement of e-commerce transactions via closing partnership agreements with Alibaba, Lazada, and Flipkart. We strengthened our position in Japan via a commercial agreement with Intage and entered the fast-growing market of Myanmar
Acquisitions
We closed several acquisitions, which enhanced our Innovation Practice capabilities; expanded our survey research capabilities; augmented our analytics capabilities in India; strengthened our Sales Effectiveness Practice; and reinforced our e-commerce capabilities with retailers
Productivity
Productivity gains were above operating plan expectations.
Talent Development
Leadership
The CEO transition was very successful. Mr. Barns retained a strong senior team with high levels of collaboration and motivation. Twelve leadership changes added diversity and vitality to the team including internal succession moves for the roles of Chief Operating Officer, Global President Client Services, Global President Product Leadership, and Chief Diversity Officer and new hires for the roles of Chief Financial Officer, and Executive Vice President of Marketing and Communications.
Talent pipeline
We continued to invest in leadership development through our global top talent leadership programs and expanded entry-level programs. These contribute to both the strength and retention of our leaders. In early 2015, Nielsen debuted at number 22Based on the annual list ofBest Companies for Leaders in Chief Executive Magazine.
Diversity
The inaugural class of our Diverse Leadership Network graduated in 2014. Nielsen was named to the “Diversity Top 50” in Diversity Inc. for the first time.
Capital Allocation
Balanced capital allocation plan
We increased the quarterly dividend by 25%, executed $466 million of stock buy backs and increased the go-forward stock repurchase authorization by an incremental $1b.
Debt
We refinanced $5 billion of debt while increasing covenant flexibility, reducing interest cost by approximately $20 million, and extending weighted average life.
Shareholders
During the year, Management met with 389 investors, up 19% over prior year and held a major Analyst Day event in early December that received favorable reviews from analysts and investors.
Performance Assessment
The planAIP formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) provided, the initial payout for Mr. Barns an initial payout of 101%was set at 92% of his target award opportunity.
The Compensation Committee assessed thatconsidered total Company financial performance as presented above, as well as Mr. Barns’ performance against the company’s commercial growth had met objectives and considered the accelerated growth in the Marketing Effectiveness and emerging markets segments as exceeding expectations. The progress in advancing Total Audience coverage in our Watch segment was assessed as above expectations. The committee consideredpresented below to arrive at his final performance assessment.
2018 PROXY STATEMENT 43 |
EXECUTIVE COMPENSATION |
Objectives
KEY FINANCIAL TARGETS Total Company growth Reported revenues for the full year increased 4.2% to $6,572 million, 3.8% on a constant currency basis compared to 2016, below plan. The Company’s practice is to focus primarily on constant currency results which are a better reflection on the underlying operating performance of the business. AIP Adjusted EBITDA grew 4.3% on a constant currency basis compared to 2016, below the AIP Adjusted EBITDA target of 5% growth from 2016. Business segment growth Revenues within the Buy segment decreased 2.7% on a reported basis and 3.3% on a constant currency basis, to $3,231 million. On a constant currency basis, our Buy segment showed strong resilience in emerging markets with revenues increasing 8.8% but saw continued softness in developed markets resulting in a 5.2% decline. Revenues within the Watch segment increased 11.9% on a reported basis, or 11.7% on a constant currency basis, to $3,341 million. Excluding the acquisition of Gracenote, Watch revenues increased 4.7%, or 4.5% on a constant currency basis. Growth was driven by strong performance in Audience Measurement of Video and Text, which increased 16.3% on a constant currency basis (5.5% excluding Gracenote). Capital Allocation At our Investor Day on November 9, 2017, we laid out our Path to 2020 with our first three-year view provided to investors. In 2017, we increased our quarterly dividend by 10%, executed $140 million in stock buybacks and restructured $2.3 billion of debt. Shareholder Return In 2017, our total shareholder return continued to trail the broader markets, down 10.2% for the year. |
STRATEGY & INITIATIVES Watch and Total Audience Measurement Total Audience objectives accomplished on plan: •Signed deal with Comcast to access return pathset-top box data. •Renewed key Audio deals with iHeartMedia and Cumulus. • Launched measurement ofout-of-home viewing in April which has been adopted by 23 networks, leagues and agencies. • DAR expanded to 32 markets. • Our multi-year plan to bring robust, person level, electronic measurement to all 210 U.S. local TV markets in 2018 remains on track. • Content measurement objectives were accomplished: • Release of new syndicated subscription video on demand measurement service to enhance current offerings so we can provide clients independent data showing how their programs are performing relative to others on subscription video on demand platforms, including Netflix. |
2018 PROXY STATEMENT 44 |
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION |
• Expanded measurement of secondary crediting of distributed video content on key publisher platforms including Facebook, Hulu and YouTube. • Added partnership with clypd that enables advertisers, agencies and publishers to transact using consistently defined audience segments on linear television. • Leveraged Gracenote automatic content recognition (ACR) technology to enable marketers to present special offers or custom promotions tied to their brands driving deeper consumer engagement on connected TVs. Buy and Connected System Accomplished client wins ahead of expectations: • Secured significant expansion of our relationship with Walmart • Key win with Tyson Foods Increased our presence in faster growing channels in line with expectations: • Expandede-commerce measurement capabilities to 17 countries • Expansion and growth in the value channel Connected System objectives were completed on target: • Expanded to 25 retailer and manufacturer clients and on target to increase to 100 clients by the end of 2018 • Grew our Connected Partner Program to 43 partners Acquisitions Tuck-in acquisition objective was completed on plan: • Closed acquisitions including Gracenote, Rhiza, vBrand and Visual IQ |
CULTURE AND EMPLOYEE ENGAGEMENT Diversity & inclusion (“D&I”) • Placed #32, up 9 spots from 2016, on DiversityInc’s Top 50 Companies for Diversity list and named to three additional specialty lists: Recruitment, Global Diversity, LGBTQ Employees • Featured on 4 Fortune lists: Top Workplaces for Diversity, Top Companies for Consulting and Professional Services, Top Workplaces in Chicago and Top Workplaces in New York • Received a perfect score on the Human Rights Campaign’s Best Places to Work for LGBT Equality (fifth year in a row) and earned equivalent recognition from HRC Mexico’s Equidad MX index • Earned “Best Place to Work for Disability Inclusion” designation from USBLN and 90% on Disability Equality Index • Named one of 100 Best Companies for Women in India for second consecutive year Employee Engagement • Launched new employee engagement strategy and multi-year roadmap, including the completion of employee engagement survey • Continued expansion of global employee stock purchase plan now reaching ~55% of global associates in 19 countries. |
PERFORMANCE ASSESSMENT FOR CEO The plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) provided Mr. Barns an initial AIP payout of 92% of his target award opportunity. The Compensation Committee assessed Mr. Barns’ performance primarily on the total Company financial performance and approved a payout of $1,700,000 or 85% of his target award opportunity. |
2018 PROXY STATEMENT 45 |
EXECUTIVE COMPENSATION |
Mr. Barns’ leadership impact noting a seamless transition to CEO, retaining key leaders, building a strong leadership team, and the results accomplished from the emphasis he placed on future leadership development and diversity. Based on its full performance assessment, the committee awarded Mr. Barns’ an annual incentive payment of $1,820,000 or 101% of his target opportunity.
As a result of his promotion to the position of CEO Mr. Barns base salary was increased by 25% to $1,000,000. He was awarded 43,500 performance RSUs under the LTPP, and 141,000 stock options and 23,800 RSUs, in line with the target long-term incentive value approved by the Committee at the beginning of the year.
Performance Assessments for Other NEOs
Based on the annual incentive planAIP formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) the initial incentiveAIP payout for each NEO was 101%.92% of his or her target award opportunity.
NEOs arewere measured against the companyCompany financial objectives as disclosed above (under “– 20142017 Pay Decisions and Performance – Financial”Total Company Financial Performance”). Additionally, Mr. Hasker and Mr. Lewis are measured against the financial performance of their respective business units.
Mr. Barns makes pay recommendations for his direct reports after quantifying their contributions to Nielsen’s financial performance and assessing performance against objectives set at the beginning of the year. He also considers the quality of the results delivered using a framework that quantifies the performance of each individual relative to his/her peers on factors such as leadership, Nielsen values, and degree of challenge. This qualitative assessment helps manage risk and better differentiates rewards for exceptional leaders.
Performance Assessment for Jamere Jackson
Financial
Mr. Jackson was assessed on total companyCompany financial metricsperformance (as described above (underunder “– 20142017 Pay Decisions and Performance – Financial”Total Company Financial Performance”) and on his performance against objectives presented below.
Objectives
Capital AllocationStrategic Planning
Mr. Jackson helped deviseplayed a central role in the development of our Path to 2020 focused on driving revenue growth and executemargin expansion over the company’snext three years. The plan was launched on time with full support of the Board and management.
Financial Performance
Constant currency revenue growth of 3.8%, and Adjusted EBITDA growth of 4.3% on a constant currency basis, below the Adjusted EBITDA target of 5% growth from 2016.
Earnings per share of $1.20 (or $1.49 excluding the impact of a one-time charge related to the Tax Cuts and Jobs Act in the U.S.).
The Company fell $37 million short of its ~$900 million free cash flow target for the year due to higher working capital allocation strategy, which delivered exceptional resultsusage and acceleration of investments in 2014:
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Organization Capabilitythe Path to 2020.
Mr. Jackson continued to divest non-core assets, restructure certain business units, reinvest in growth platforms and invest in fast growing tuck-in acquisitions including Gracenote, Rhiza, VBrand and Visual IQ.
Balanced Capital Allocation
Mr. Jackson fulfilled the Company’s balanced capital allocation objective. Under his leadership, Nielsen increased its quarterly dividend by 10%, executed several structural changes$140 million of stock buy-backs and leadership moves within hisrestructured $2.3 billion of debt; saving significant interest expense in line with the capital allocation plan.
Talent
Mr. Jackson continued to make key investments in talent across the finance team adding towith key additions in India, Gracenote and through the growth, vitality, and efficiencyestablishment of the team. The investor relations team executed on proactive outreach to forge highly effective relationshipsregional finance councils. Mr. Jackson also had significant engagement with buy and sell side investors and converted ~60%our employee resource groups, including sponsorship of our top 25 institutional targets into Nielsen shareholders.first Hispanic employee forum.
Performance Assessment
The plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) provided Mr. Jackson an initial AIP payout of 101%92% of his target award opportunity.
The Compensation Committee considered the company’s commercial growthweighted total Company financial performance in its full performance assessment and approved a payout of $680,000, or 85% of Mr. Jackson’s leadership contribution in devising and executing the company’s capital allocation plan. The committee noted that Mr. Jackson, in his first year as CFOtarget award opportunity.
2018 PROXY STATEMENT 46 |
EXECUTIVE COMPENSATION
had made a significant leadership impact. He drove the company’s successful shareholder outreach program and improved the development of the Finance talent pipeline. Based on its full performance assessment, the committee adjusted Mr. Jackson’s annual incentive payment to $750,000 or 107% of his target opportunity.
As a result of his appointment as Chief Financial Officer Mr. Jackson’s base salary was set at $700,000 and he was awarded 20,000 performance RSUs under the LTPP and 65,000 stock options and 11,000 RSUs, in line with the target long term incentive value set by the Committee at the beginning of the year.
Performance Assessment for Brian West
Financial
Mr. West was assessed on total company financial metrics (as described above (under “– 2014 Pay Decisions and Performance – Financial”)) and on his performance against objectives presented below.
Objectives
Organization
Mr. West was promoted to the role of Chief Operating Officer at the beginning of the year and took action immediately to simplify his the organization to better integrate the internal processes for delivering products to clients. The restructuring was significant and was accomplished ahead of expectations. Over 200 leadership moves were made with 70% of leaders appointed to new or expanded roles. The results in the first year exceeded expectations, with productivity gains and operating expenses that were both favorable to operating plan targets.
Clients
Mr. West developed a vision and strategy for our future technology platform. His engagement with clients and investor groups were impactful in demonstrating Nielsen’s unique value in measuring and improving client’s performance particularly as consumer viewing and purchasing continues to shift toward digital platforms.
Quality
Due to the changes initiated by Mr. West, day-to-day quality performance achieved record levels of compliance and quality incidents and escapes were down 15% from prior year.
Performance Assessment
The plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) provided Mr.West an initial payout of 101% of his target opportunity.
The Compensation Committee considered the company’s commercial growth and Mr. West’s major restructuring of his function, which employs approximately 65% of the Company’s employees. He provided leadership that produced productivity savings above operating plan expectations and yielded continuing improvements to quality. The committee noted that Mr. West had made a significant leadership impact internally and externally by articulating a clear vision for the Company’s future technology platform. Based on its full performance assessment, the committee adjusted Mr. West’s initial incentive payment to $1,800,000 or 103% of his target opportunity.
As a result of his promotion to the position of Chief Operating Officer, Mr. West’s base salary was increased by 12% to $950,000 and he was awarded 38,000 performance RSUs under the LTPP and 122,500 stock options and 20,700 RSUs, in line with the target long term incentive value approved by the Committee at the beginning of the year.
EXECUTIVE COMPENSATION
Performance Assessment for StephenSteve Hasker
Financial
Mr. Hasker was assessed on total companyCompany financial metrics (as described above (underunder “– 20142017 Pay Decisions and Performance – Financial”Total Company Financial Performance”), and on his performance against the objectives presented below.
Objectives
Watch businessSegment Growth
The Watch segment achieved revenue growth
Under Mr. Hasker’s leadership, the Watch strategy translated into accelerated revenue of 11.7% and Adjusted EBITDA growth acrossof 9.6%, both on a constant currency basis. Growth was driven by strong performance in Audience Measurement which saw revenue growth of 16.3% on a constant currency basis (including impact of the business segments along with strong expense management, above plan expectations. The core Watch business grew 5.8%Gracenote acquisition). Other businesses critical to our growth strategy saw growth over prior year and performances consistently above plan including double-digit growthThis was offset by flat performance in our Marketing Effectiveness business.Audio business (0.2% increase in constant currency) and other Watch which was down 16.5% due to divesting ofnon-core assets.
Buy Segment Growth
Revenues within the Buy segment decreased 2.7% on a reported basis or 3.3% on a constant currency basis, to $3,231 million. On a constant currency basis, our Buy segment showed strong resilience in emerging markets with revenues increasing 8.8% but continued softness in development markets resulted in a 5.2% decline.
Watch and Total Audience Measurement
A critical objective wasIn our Watch segment, our execution of Total Audience objectives met expectations, including closing deals with Comcast to establishaccess return path data, and market our unique Watch portfolio capabilities for measuring the total audience for video across all platforms.key Audio renewals with iHeartMedia and Cumulus. Mr. Hasker’s team performed above expectations, engagingdrove the global expansion of DAR to 32 markets and the release of new syndicated subscription video on demand measurement service. The team also launched measurement ofout-of-home viewing in April which has been adopted by 23 networks, leagues and agencies.
Buy and the Connected System
In our Buy segment, a significant expansion of our relationship with Walmart was secured along with a key clientswin with Tyson Foods. Mr. Hasker’s team made key progress on expandinge-commerce measurement capabilities to shape our strategy to launch Mobile Online Campaign Ratings, Mobile TV Ratings,17 countries and Digital Content Ratings through our partnership with Adobe, as well as to drive progresscontinued growth in the value channel. The team continued to build on the charter client adoptionsuccess of our Online Campaign Ratings metric.
Global Buy Product Leadership
In 2014, Mr. Haskerthe Connected System with 25 retail and his team implemented, on plan, a structure aligned around Global Practices that provide integrated solutions formanufacturer clients inengaged with the areas of Innovation (new product development), Performance Management (measuring and improving performance across the retailer-manufacturer value chain), Marketing Effectiveness (connecting what consumers watch with what they buy) and Sales Effectiveness (increase customer loyalty by optimizing pricing and assortment). As a result, Global Practices were established within our regional business units around the world and are driving broader client relationships and revenue growth, especially in key in emerging markets.system at year end 2017.
Performance Assessment
The plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) provided Mr. Hasker an initial AIP payout of 101%92% of his target award opportunity.
The Compensation Committee considered the company’s commercial growth and the revenueweighted total Company financial performance of the global Watch business, which was in line with expectations. The committee also considered the above-expectation results that were achieved by Mr. Hasker in executing our “Total Audience” strategy, the adoption of OCR by clients, and the progress on our global Buy product strategy. Based on its full performance assessment the committee adjusted his annual incentive payment to $950,000and because Mr. Hasker served for all of 2017, approved a payout of $935,000, or 106%85% of hisMr. Hasker’s target award opportunity.
As a result ofPerformance Assessment for Eric J. Dale
Financial
Mr. Dale was assessed on total Company financial performance (as described above under “– 2017 Pay Decisions and Performance – Total Company Financial Performance”) and his promotion toperformance against the position of Global President, Mr. Hasker’s base salary was increased by 13% to $900,000 and he was awarded 20,100 performance RSUs under the LTPP and 65,000 stock options and 11,000 RSUs, in line with the target long term incentive value set by the Committee at the beginning of the year.objectives presented below.
2018 PROXY STATEMENT 47 |
EXECUTIVE COMPENSATION
Performance Assessment for John Lewis
Financial
Mr. Lewis was assessed on total company financial metrics (as described above (under “– CEO performance assessment – Financial”) and on his performance against objectives presented below.
Objectives
Commercial Growth and ProductivityAcquisitions
Mr. Lewis is responsible for all regionsDale’s team was instrumental in the closing of Nielsen’s business,several acquisitions, including the acquisition of Gracenote and othertuck-in acquisitions as contemplated in our strategic plan. All were closed on time and in alignment with the exception of the Watch business in North America. He took on this role in August, 2014,expected financial parameters.
Corporate Governance, Integrity, Enterprise Risk Management and has begun implementing more segmented market approaches to maximizing growth and increasing our emphasis on E-Commerce.Security
Mr. Lewis was assessed alsoDale drove organizational focus on cybersecurity including instituting an in-depth cybersecurity review and reporting to Nielsen’s Board. In addition, Mr. Dale launched a revised Code of Conduct through Nielsen’s Compliance and Integrity program. Mr. Dale continued to strengthen our focus on Enterprise Risk Management by launching a new reporting dashboard and metrics for his previous accountability running The Americas (North America Buy and Latin America). The Americas saw high double-digit growth in Latin America, but was below plan growth in North America, resulting in EBITDA also below plan.the Board.
Acquisitions and Client WinsTalent Development
Mr. Lewis led improvementsDale continued to enhance the Legal and Corporate Affairs team while outperforming on cost management. He met objectives to strengthen our North American capabilitiesglobal privacy compliance and drive continued improvement in corporate governance through closingeffective reorganization and integrating two acquisitions that strengthened our Consumer Insights capabilitiestalent acquisition.
Team Integration
Mr. Dale successfully integrated the Government Relations and our Innovation Practice.
Organization
In a challenging year forPublic Policy team and the Americas business, Mr. Lewis made a significant leadership impact in creating a solid foundation for 2015. In addition to closing two major acquisitions, he executed a seamless successionCorporate Social Responsibility team into his team, and restructured the role of President, North America Buyentire group as, the Legal and initiated structural changes and improved operational efficiencies in Mexico and Brazil including the introduction of new leadership for the Brazilian market.Corporate Affairs department.
Performance Assessment
The plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) provided Mr. LewisDale an initial AIP payout of 101%92% of his target award opportunity.
The Compensation Committee considered the company’s commercial growthMr. Dale’s influence and leadership in improving corporate governance and the performanceCompany’s management of the North America Buy and Latin America businesses (“The Americas”). The committee noted the strong foundation Mr. Lewis had established in our Americas businesses due to client wins and acquisitions in North America and restructuring in Latin America. They noted his quick start in his new global role with emphasis on segmentation of developing markets and increased emphasis on e-commerce. enterprise risk.
Based on its full performance assessment due to the below-plan Americas business performance, the committee adjustedCompensation Committee approved a payout of $675,000, or 90% of Mr. Lewis’ initial annual incentive payment to $750,000 or 91% of hisDale’s target award opportunity.
Performance Assessment for James CuminaleNancy Phillips
Financial
Mr. CuminaleMs. Phillips was assessed on total companyCompany financial metricsperformance (as described above (underunder “– 20142017 Pay Decisions and Performance – Financial”Total Company Financial Performance”) (under “– CEOand her performance assessment – Financial”)).against the objectives presented below.
Objectives
Third Party InitiativesEmployee Engagement
Mr. Cuminale guidedMs. Phillips developed and executed an employee engagement strategy that deploys “Nielsen-strength” measurement science to driving talent retention and engagement across our global population. Ms. Phillips successfully launched phase one of the company through multiple acquisitionstrategy on time and partnership negotiations. In additionwithin budget with the implementation of a baseline employee engagement survey.
People Analytics
Ms. Phillips completed on-plan the first phase of a people analytics strategy to his duties as Chief Legal Officer, he ensured the continuity of corporate business development activities worldwide through the transition of responsibilitiesbring strategic workforce planning capabilities to a new Head of Business Development. He had a significant impactbear on important audience measurement initiatives in Latin America and India.our Path to 2020.
2018 PROXY STATEMENT 48 |
EXECUTIVE COMPENSATION
Organization Development
Board/Governance
Mr. Cuminale oversawMs. Phillips refocused the organization’s leadership and succession planning process for the recruitment of two new Board directors and effected improvements tosuccessfully led the management of Board activities.
Compliancemultiple talent moves and Ombudsman Program
Mr. Cuminale establishedrestructuring during the Ombudsman program two years agoyear to accomplish planned business outcomes and led changes in 2014 to expand its scope and increase its effectiveness.
Mr. Cuminale oversaw the effective operation of our compliance program and was influential in promoting NIelsen’s integrity standards internally and externally.productivity goals.
Performance Assessment
The plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) provided Mr. CuminaleMs. Phillips an initial AIP payout of 101%92% of hisher target award opportunity.
TheIn addition to the Company Performance, the Compensation Committee considered the company’s commercial growthMs. Phillips’ progress against challenging objectives in her first year and additionally noted Mr. Cuminale’s significant contribution to our new business development strategy and Board governance, and his leadership of our compliance and ombudsman program. Based on its full performance assessment, the committee made no adjustment to his initialapproved a payout of $930,000$450,000, or 101%90% of hisMs. Phillips’ target award opportunity.
No change was made to Mr. Cuminale’s base salary in 2014 in line with our practice of awarding salary increases in intervals of 24 –36+ months unless there is a change in role. He was awarded 16,300 performance RSUs under the LTPP and 52,500 stock options and 8,900 RSUs, in line with the target long-term incentive value set by the Committee at the beginning of the year.
How Pay Decisions are Made
Annual Base Salaries
Base salary is the only fixed component of our executive officers’ compensation. The Compensation Committee considers benchmark compensation information for executives serving in similar positions at peer companies and general market benchmarkssurvey data supplied by its compensation consultant, Meridian Compensation Partners, LLC – (“Meridian”), to help ensure that base salaries of the Company’s NEOs are competitive in the marketplace and are serving their purpose to attract and retain top talent.
The Compensation Committee considers salary increases for the Company’s executive officers for salary increases generally in24-36+ month intervals unless there is a change in role.role or circumstances otherwise warrant consideration.
Executive officers are not involved in determining their own compensation.
Annual Incentive Plan
The purpose of the annual incentive planAIP is to motivate executives to accomplish short-term business performance goals that contribute to long-term business objectives. The Compensation Committee approves the applicable performance measures and performance targets under the plan at the beginning of each year. At the beginning of the fiscal year following the end of the performance period the Company’s and the executives’ actual achievement under the performance measures and performance targets is reviewed and assessed, and the Compensation Committee approves the cash amounts payable to such executives. The NEOs participate in the same incentive plan as the Company’s top 200 executives.senior managers. Approximately 8%3.4% of the incentive fund isamount available under the funded AIP was paid to NEOs.NEOs in 2017.
In determining the target opportunity for each NEO, the Compensation Committee considered general industry benchmark compensation information for executives serving in similar positions at peer companies and general market benchmarks and peer groupsurvey data provided by Meridian Compensation Partners LLC;Meridian; executives’ total direct compensation mix and prior year award values;mix; changes in role and job responsibilities; companyand Company financial performance and individual performance.
Under the AIP, a maximum annual incentive payout fund for the NEOs is determined by a formula which calculates 2% of AIP Adjusted EBITDA performance and allocates it to each executive officer in proportions ranging between 10% and 20% of the fund. This yields a maximum fund, and the Compensation Committee may exercise negative discretion to determine final payouts using the Annual Incentive Plan SummaryPayout Formula described below.
Annual Incentive Plan Payout Formula
To assess Adjusted EBITDA performance for annual incentive funding, we recalculate Adjusted EBITDA as defined in our Annual Report on Form 10-K for the corresponding performance period to eliminate the impact
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EXECUTIVE COMPENSATION |
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EXECUTIVE COMPENSATION
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Performance targets are aggressive and achievable
The Compensation Committee believes that AIP Adjusted EBITDA growth is highly correlated to the creation of value for our shareholders and is an effective measure of the NEOs’ contributions to short-term Company performance. The AIP Adjusted EBITDA target is the Board-approved operating plan target |
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Funding formula and individual payouts
Performance – Payout Formula
Performance Milestones
| Growth vs Prior Year (Index %)
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Maximum
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Exceptional
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Target
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Minimum
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< Minimum
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The |
Performance -Payout Formula
Performance Milestones | Growth v Prior Year (index %) | Funding/Initial Payout % | ||||||
Maximum | 167 % | 200 % | ||||||
Exceptional | 115 % | 123 % | ||||||
Target | 109 % | 107 % | ||||||
Actual Performance | 107.3 % | 101 % | ||||||
Target threshold | 107 % | 100 % | ||||||
Minimum | 98.5 % | 70 % | ||||||
< Minimum | <98.5 % | Zero |
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2018 PROXY STATEMENT 50 |
EXECUTIVE COMPENSATION
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2017 Results The Compensation Committee determined that the Company’s AIP Adjusted EBITDA growth index achieved in 2017 was 102%, yielding an AIP funding percentage of 92%. As a result, the initial AIP payout for each NEO was set at 92% of each NEO’s target award opportunity. 2017 free cash flow fell short of objectives. The Compensation Committee reviewed the drivers of the free cash flow shortfall, particularly the increased capital expenditure that was approved in the context of our three-year Path to 2020 strategy and working capital timing. The Compensation Committee decided that no further reduction in the AIP funding was warranted. 2018 Changes Following a review of the Company’s compensation strategy in July 2017, the Compensation Committee made the determination to add revenue growth as a performance metric for the 2018 AIP. For 2018, 75% of the total AIP payout will be based on AIP Adjusted EBITDA growth against a target, and 25% will be based on revenue performance against a target. The Adjusted EBITDA and revenue targets are the Board-approved operating plan targets. In light of the significant influence that Adjusted EBITDA performance has on free cash flow, the Compensation Committee determined to remove the provision allowing for discretion to reduce the incentive fund by up to 30% if free cash flow falls short of objectives. Free cash flow remains a metric under the LTPP. |
2014 Results
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Long-termLong-Term Incentives (LTI)
The purposes of long-term incentive awards are to focus executives on long-term sustainable performance and to align executive rewards with long-term returns delivered to shareholders. Currently, all long-term incentives are delivered as equity-based awards.
LTI MixMIX – 50% is subject to quantifiable long-term performanceIS SUBJECT TO QUANTIFIABLE LONG-TERM PERFORMANCE
Equity-based awards are made to executives, other employees and directors pursuant to the Amended and Restated Nielsen Holdings 2010 Stock Incentive Plan.Plan (as amended, the “2010 Plan”). Our strategygoal is to increaseprovide at least 50% of the proportion ofNEO’s total NEOdirect compensation pay deliveredmix in long-term equity, progressing to at least 60% over time, and to have at approximately 50% of the LTI subject to quantifiable long-term performance metrics. metrics, which are granted as PRSUs.
Since 2013, our practice had been to split the time-based equity awards evenly between stock options and RSUs. The Compensation Committee determined to grant all of the time-vesting equity awarded in 2017 in the form of RSUs to align with market practice in the digital marketplace in which we compete for top talent and in recognition of its belief that RSUs incent executives to improve performance through share price appreciation as well as provide a powerful retention effect. Granting RSUs instead of options is also a more efficient use of the shares available under our 2010 Plan.
2018 PROXY STATEMENT 51 |
EXECUTIVE COMPENSATION |
Prior to finalizing award sizes, the Compensation Committee considered considers:
Performance Restricted Stock Units Awarded Under the Long-Term Performance Plan (LTPP)
20142017 Plan
The plan design in 2014 was unchanged from 2013. LTPP participants are awarded a target number of performance RSUs (“PRSUs”)PRSUs that are earned subject to the Company’s performance against two cumulativethree-year performance metrics, free cash flow (“FCF”), and relative total shareholder return, (RTSR) with assigned weightings of the total LTI award opportunity of 60% and 40%, respectively.
The Compensation Committee decided to assignassigned more weight to the free cash flow metric as it is a metric over which executives have relatively more direct control. The performance period for the 2017 grant commenced on January 1, 20142017 and ends on December 31, 2016.2019. Grants are denominated in RSUs and settled in Nielsen shares. Based on the performance at the end of the three-year period, executives may earn less or more
EXECUTIVE COMPENSATION
than the target PRSUs granted. Relative TSR performancetotal shareholder return below the 30th30th percentile of our performance peer group or free cash flow performance below 85% of the free cash flow target will result in 0% payout for eachthat metric. Payouts for each metric are calculated independently of each other. The maximum payout for each metric is 200%. In the case of absolute negative total shareholder return of the Company over the performance period, payments under the relative total shareholder return component of the plan are capped at 100% of target.
The table below summarizes the planLTPP performance-payout matrix, which isremained unchanged from 2013.2016. The Compensation Committeere-affirmed its belief that thethis design provides appropriate rigor in the ratio of performance to reward, as well as the right balance between individual risk and motivation. The free cash flow targets are intended to be aggressive and achievable and are fully aligned with our three-year strategic plan objectives and long-term guidance issued to investors.
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Plan Design1
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Milestones | Free Cash Flow (% to target) | Free Cash Flow Payout (60% weight) | Relative TSR (percentile rank) (40% weight) | Relative TSR Payout | Free Cash Flow (% of target)
| Free Cash Flow Payout (60% weight)
| Relative Total (percentile rank) (40% weight)
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Maximum | 120 % | 200 % | 75th | 200 % |
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Target | 100 % | 100 % | 50th | 100 % |
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Minimum | 85 % | 50 % | 30th | 50 % |
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The performance metrics operate |
After a comprehensive review of reports from Meridian, other advisors and Nielsen’s management team in 2013,Relative Total Shareholder Return Peer Group
Each year, the Compensation Committee approved a performance peer group solely for the purposes of measuring our relative TSR under the LTPP plan. The peer group includes companies in comparable businesses to Nielsen, as well as companies representing the markets we serve. There were no changes made toreviews the peer group in 2014.order to determine the appropriate peer companies used to measure our relative total shareholder return for grants made that year under the LTPP. The peer group for determining achievement under relative total shareholder return is distinct from the peer group used to evaluate grants made that year and set compensation levels discussed under “— Compensation Practices and Governance — Benchmarking.” In their review of the peer group used to measure relative total shareholder return, the Compensation Committee considers the following:
2018 PROXY STATEMENT 52 |
EXECUTIVE COMPENSATION |
Based on this review, the Compensation Committee made changes to the relative total shareholder return peer group which became effective for the LTI grant in 2017. Seven media and consumer product companies were removed from the peer group as the Compensation Committee determined their business characteristics and macroeconomic influences were not similar to ours. The companies removed were Coca-Cola Company, Colgate-Palmolive Company, The Procter & Gamble Company, Time Warner Inc., Twenty-First Century Fox, Inc., Unilever N.V., and Viacom, Inc. Three companies were added to the peer group: Gartner Inc., Publicis Groupe, and Verisk Analytics, Inc. These companies operate in similar businesses to Nielsen or serve similar clients to Nielsen.
2017 LTPP | ||
Accenture plc | S&P Global, Inc. | |
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Dun and Bradstreet Corporation | Moody’s Corporation | |
Equifax Inc. | MSCI Inc. | |
Experian plc | Omnicom Group, Inc. | |
FactSet Research Systems | Publicis Groupe (ADR) (NEW) | |
Gartner Inc (NEW) | RELX (NV) | |
GfK SE | Thomson Reuters Corporation | |
IHS | Verisk Analytics, Inc. (NEW) | |
IQVIA Holdings Inc. (formerly Quintiles IMS Holdings Inc.) | Wolters Kluwer (NV/ADR) | |
The Interpublic Group of Companies, | WPP plc (ADR) |
2015 Plan Design Change2018 Changes
During 2014,Following a review of compensation strategy in July 2017, the Compensation Committee carefully revieweddecided to addthree-year revenue compounded annual growth rate (CAGR) as a performance metric for the design2018 LTPP. For the 2018 plan, 50% of the plan in the context of the Say on Pay vote result. Based on this review the committee introduced a change effective in 2015 designed to better align plan outcomes with the shareholder’s experience. From 2015, payments under the relative TSR component of the plantotal LTI award opportunity will be capped atbased on free cash flow performance against target, in25% will be based on relative total shareholder return and 25% will be based onthree-year revenue CAGR. In addition, the event that absolute TSR growth over the performance period is negative.
Stock Options and Restricted Stock Units
The stock option and RSU awards are intended to enhance the retention value of the equity program and align with the creation of shareholder value. Both stock options and RSUs vest over four years in equal annual installments. The Compensation Committee provided approximately 25%decided to increase the proportion of LTI value subject to quantifiable performance from 50% to 60% to become effective upon the NEO LTI valuesnext grant of PRSUs in stock options and 25% in RSUs.February 2018.
2018 PROXY STATEMENT 53 |
EXECUTIVE COMPENSATION
Compensation Practices and Governance
Compensation Committee
The Compensation Committee regularly reviews the philosophy and goals of the executive compensation program and assesses the effectiveness of compensation practices and processes. The Compensation Committee sets performance goals and assesses performance against these goals. The Compensation Committee considers the recommendations, the peer group benchmark compensation information and general market survey data provided by its independent consultant as well as the judgment of the CEO on the performance of his direct reports. The CEO does not participate in the Compensation Committee discussion regarding his own compensation. The Compensation Committee makes its decisions based on its assessment of both Nielsen performance and individual performance against goals, as well as on its judgment as to what is in the best interests of Nielsen and its shareholders.
The responsibilities of the Compensation Committee are described more fully in its charter, which is available inon the Corporate Governance page of our website atwww.nielsen.com/investorsunder Corporate Governance: Governance Documents: Compensation Committee Charter.
In fulfilling its responsibilities, the Compensation Committee Interlocks and Insider Participation
No memberis entitled to delegate any or all of our Compensation Committee has served as one of our officers or employees at any time. Except as otherwise disclosed in this proxy statement, no memberits responsibilities to subcommittees of the Compensation Committee. The Compensation Committee has hadmay delegate to one or more officers of the Company the authority to make grants and awards of cash or options or other equity securities to any relationship with Nielsen requiring disclosure under Item 404non-Section 16 officer of Regulation S-Kthe Company under the Exchange Act. None of our executive officers has servedCompany’s incentive-compensation or other equity-based plans as a director, or member of the Compensation Committee (or other committee serving an equivalent function),deems appropriate and in accordance with the terms of an organization that has an executive officer also servingsuch plan; so long as such delegation is in compliance with the relevant plan and subject to the laws of England and Wales and the Company’s articles of association. In 2017, the Compensation Committee reviewed its charter and decided to take a member of ourmore active role in reviewing talent and succession planning. The charter was updated to include responsibility for reviewing, assessing, and making recommendations to the Board or Compensation Committee.regarding the Company’s leadership development and employee experience.
Independent Compensation Consultant
The Compensation Committee retains Meridian Compensation Partners, LLC (Meridian) as its compensation consultant. Meridian has provided peer group benchmark compensation information, general market survey data and perspective on executive and independent director compensation and related governance. Meridian and its affiliates did not provide any services to Nielsen or its affiliates in 20142017 other than executive and director compensation consulting to the Compensation Committee. Discussions between Meridian and Nielsen management are limited to those discussions necessary to complete work on behalf of the Compensation Committee.
The Compensation Committee determined that Meridian and its lead consultant for Nielsen satisfy the independence factors described in the NYSE listing rules. The Compensation Committee also determined that the work performed by Meridian in 20142017 did not raise any conflict of interest issues.interest.
2018 PROXY STATEMENT 54 |
EXECUTIVE COMPENSATION |
Benchmarking
The Compensation Committee uses anthe executive compensation of a peer group of companies, selected for their business relevance and size appropriateness to Nielsen, as one of many considerations when making executive compensation pay decisions. To account for differences in the size of our peer group companies, the market data are statistically adjusted to allow for valid comparisons to similarly sizedsimilarly-sized companies. The peer group information may also be supplemented by general industry survey data selected by Meridian to provide reasonable benchmarks for a companyCompany of Nielsen’s size and business type. After a review by the Compensation Committee, no changes were made to the peer group for 2017.
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Adobe Systems Incorporated | The Interpublic Group of Companies, Inc. | ||||
Alliance Data Systems Corporation | Moody’s Corporation | ||||
Automatic Data Processing, Inc. | Omnicom Group, Inc | ||||
Cognizant Technology Solutions Corporation | IQVIA Holdings Inc. | ||||
Equifax Inc. | salesforce.com, inc. | ||||
Experian plc | S&P Global, Inc. | ||||
Fiserv, Inc. | Thomson Reuters Corporation | ||||
IHS Markit Ltd. | Verisk Analytics, Inc. |
EXECUTIVE COMPENSATION
Consideration of Risk
The Compensation Committee conducted a risk assessment of Nielsen’s 20142017 pay practices, which included the review of a report from Meridian. TheAs a result of this assessment, the Compensation Committee concluded that it believes that Nielsen’s pay programs are not reasonably likely to have a material adverse effect on Nielsen, its business and its value. Specifically, the Compensation Committee noted the following:
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EXECUTIVE COMPENSATION |
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Share Ownership Guidelines
To ensure strong alignment of executive interests with the long-term interests of shareholders, executives are required to accumulate and maintain a meaningful level of stockshare ownership in the Company. TheOur share ownership guideline policy wasguidelines were adopted in June 2011. Messrs. Barns, Hasker and Lewis first became subject to
In 2017, after a market review of our share ownership guidelines, in 2013. Mr. Barns’ guideline was subsequently changed from three timesthe Compensation Committee decided to six times salary on January 1, 2014 when he became the company’s Chief Executive Officer. The guidelines were subsequently reset for Mr. Hasker and Mr. Lewis from two times to three times after their appointment as Section 16 Officers. Neither Mr. Barns, Mr. Hasker, nor Mr. Lewis will be permitted to sell shares of the Company after December 31, 2014 until the guidelines are met.continue our policy with no changes.
The table below presents the guidelines and actual share ownership as of March 1, 2015December 29, 2017 for each of our Named Executive Officers.NEOs.
Name | Guideline | Guideline Shares* | Share Ownership ** | Guideline
| Guideline Shares1
| Share Ownership2
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Mr. Barns | 6 x salary | 134,000 | 44,947 |
| 6 x salary
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| 164,800
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| 349,938
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Mr. Jackson | 3 x salary | 47,000 | 0 |
| 3 x salary
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| 61,800
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| 93,138
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Mr. West | 3 x salary | 80,000 | 101,517 | |||||||||||||||||||||
Mr. Hasker | 3 x salary | 60,000 | 9,055 |
| 3 x salary
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| 74,200
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| 125,247
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Mr. Lewis | 3 x salary | 52,000 | 28,012 | |||||||||||||||||||||
Mr. Cuminale | 3 x salary | 59,000 | 91,281 | |||||||||||||||||||||
Mr. Dale
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| 3 x salary
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| 61,800
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| 29,809
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Ms. Phillips
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| 1 x salary
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| 13,700
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| 18,133
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The guideline shares were reset using |
Eligible shares include beneficially-owned shares held directly or indirectly, jointly-owned shares and |
EXECUTIVE COMPENSATION
Other Policies and Guidelines
Perquisites
We provide our Named Executive OfficersNEOs with limited perquisites, reflected in the “All Other Compensation” column of the Summary Compensation Table and described in the footnotes. Named Executive OfficersNEOs may claim financial planning and executive health examwellness expenses capped each year at $15,000 and $2,500, respectively. In very limited circumstances, we may permit NEOs and their family members to access our contractual arrangement for private aircraft for their personal use. We were reimbursedNone of the NEOs used the aircraft for the cost of suchpersonal use in 2014.2017. In certain circumstances, where necessary for business purposes, we also provide reimbursement for relocation expenses.
Severance
We believe that severance protections play a valuable role in attracting and retaining key executive officers. Between 2007In July 2017, the Compensation Committee approved a new U.S. severance policy applicable to all Section 16 officers and 2010 we offered severance protections toother senior executives, pursuant to substantially identical severance agreements connected to awards granted under our 2006 stock plan, which required executives to make substantial personal investments inincluding the Company. Each of our NEOs, except Mr. Jackson, have entered into one of these individual severance agreements. These agreements only vary in the severance multiple provided (except for Mr. Cuminale as described below) depending on the position of the individual at the time the agreement was executed. Pursuant to theCompany’s NEOs. The terms of his offer letter, Mr. Jackson is entitled to receive severance upon certain terminations of employment.
The relevant severance triggering events and amounts payable arethis policy, described in further detail under “– Tables and Narrative Disclosure – Potential Payments Upon Termination or Change in Control, – Severance Benefits )” supersede the terms of prior severance arrangements provided through our 2006 Stock Acquisition and Option Plan for Key Employees for Messrs. Barns and Hasker, or through the terms stated in offer letters for Messrs. Jackson and Dale and Ms. Phillips.
Mr. Cuminale’s severance agreement provided him with the right to receive tax gross-ups on certain change in control payments as described below in “– Potential Payments on Termination or Change in Control.” In 2015, he elected to waive this provision pursuant to an amendment to his severance agreement dated February 17, 2015.
Change in Control
For equity awards made in 2011 or later, under the 2010 Plan as amended, unvested options and RSUs do not vest automatically solely in the event of a change in control.
Unvested The treatment of unvested equity awards granted under the 2006 Plan would have vested in full on a change in control. Effective December 31, 2014, the final tranche of equity awards under this plan vested under the regular terms of the plan. Thereafter, the only remaining unvested options are a small tranche of performance-based stock options that may vest onupon a change in control depending upon the financial return to the Sponsors; these options will expire for each NEO between November 2016 and March 2017 dependent on their grant date.
These benefits areis described in further detail under “– Tables and Narrative Disclosure – Potential Payments Upon Termination or Change in Control.”
Clawback Policy
Our clawback policy requires the Chief Executive OfficerCEO and his executive direct reports, in all appropriate cases, to repay or forfeit any bonus, short-term incentive award or amount, or long-term incentive award or amount awarded to the executive, and anynon-vested equity-based awards previously granted to the executive if:
2018 PROXY STATEMENT 56 |
EXECUTIVE COMPENSATION
Other Benefits
The CEO and each other Named Executive OfficerNEOs are eligible to participate in the health and welfare, defined contribution 401(k), and deferred compensation plans made available, per eligibility requirements, to all employees.
Tax Implications
The Compensation Committee takes into account the various tax and accounting implications of compensation. When determining amounts of equity grants to executives and employees, the Compensation Committee also examines the accounting cost associated with the grants.
Certain of the Company’s incentive compensation programs are intended to allow the Company to make awards to executive officers that are deductible under Section 162 (m)162(m) of the Internal Revenue Code (the “Code”) (as interpreted by IRS Notice 2007-49) denies a federal incomeas qualifying performance-based compensation, which provision otherwise sets limits on the tax deduction for certain compensation in excessdeductibility of $1 million per year paid to the chief executive officer and the three other most highly-paid executive officers (other than the company’s chief executive officer and chief financial officer) of a publicly-traded corporation. Certain types of compensation, including compensation based on performance criteria that are approved in advance by stockholders, are excluded from the deduction limit. In addition, “grandfather” provisions may apply to certain compensation arrangements that were entered into by a corporation before it was publicly held. The Compensation Committee’s policy is to qualify compensation paid to a company’s most highly compensated executive officers. Commencing with the Company’s 2018 fiscal year, the performance-based compensation exception to the deductibility limitations under Section 162(m) will no longer apply (other than with respect to certain “grandfathered” performance-based awards granted prior to November 2, 2017), and the deduction limitation under Section 162(m) will generally apply to compensation paid to any of our then current or former named executive officers for deductibilityofficers. The Compensation Committee may continue to seek ways to limit the impact of Section 162(m) of the Internal Revenue Code. However, the Compensation Committee believes that the tax deduction limitation should not compromise the Company’s ability to establish and implement compensation and incentive programs that support the compensation objectives discussed above. Accordingly, achieving these objectives and maintaining required flexibility in this regard is expected to result in compensation that is not deductible for federal income tax purposes to the extent feasible. However, to retain highly skilled executives and remain competitive with other employers, the Compensation Committee will have the right to authorize compensation that would not otherwise be deductible under Section 162(m) or otherwise and to pay bonuses in any amount, including discretionary bonuses or bonuses with performance goals that are different from those under our annual incentive plan.purposes.
The Company may rely on the exemption from Section 162(m) of the Code afforded to it by the grandfather provisions described above for compensation paid pursuant to the Company’s pre-existing plans (including the annual incentive plan). In addition, the annual incentive plan has been designed to permit the Compensation Committee to grant awards thereunder which are intended to qualify as “qualified performance-based compensation” under Section 162(m) of the Code.
In 2014, the Compensation Committee relied on the grandfather provisions in determining the amounts payable to our NEOs as described above under “Annual Incentive Plan.”
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based upon this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statementproxy statement and incorporated by reference into the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 20142017 (or any amendment thereto).
Submitted by the Compensation Committee of the Company’s Board of Directors: February 19, 2015.
Javier G. Teruel (Chairman)Harish Manwani (Chairperson)
Karen M. HoguetGuerrino De Luca
Alexander NavabRobert C. Pozen
Lauren Zalaznick
2018 PROXY STATEMENT 57 |
EXECUTIVE COMPENSATION
TABLES AND NARRATIVE DISCLOSURE
Summary Compensation Table
The following table presents information regarding compensation to our Named Executive OfficersNEOs for fiscal years 2014, 2013 and 2012.the periods indicated.
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||
Name and Principal Position | Year | Salary ($) | Bonus1 ($) | Stock Awards2 ($) | Option Awards3 ($) | Non-Equity Incentive Plan Compensation4 ($) | Change in Pension ($) | All Other Compensation6 ($) | Total ($) | |||||||||||||||||||||||||||
Mitch Barns Chief Executive Officer | 2014 | 998,462 | — | 3,407,277 | 1,054,680 | 1,365,000 | 7,897 | 124,576 | 6,957,892 | |||||||||||||||||||||||||||
2013 | 779,231 | — | 2,840,040 | 359,550 | 637,500 | 4,553 | 22,650 | 4,643,524 | ||||||||||||||||||||||||||||
Jamere Jackson Chief Financial Officer | 2014 | 565,385 | 1,300,000 | 5,217,861 | 486,200 | 562,500 | — | 118,179 | 8,250,125 | |||||||||||||||||||||||||||
Brian West Chief Operating Officer | 2014 | 930,769 | — | 3,162,049 | 916,300 | 1,350,000 | — | 33,313 | 6,392,431 | |||||||||||||||||||||||||||
2013 | 850,000 | — | 3,119,420 | 420,750 | 1,125,000 | — | 24,185 | 5,539,355 | ||||||||||||||||||||||||||||
2012 | 850,000 | — | 419,700 | 1,242,000 | 1,350,000 | — | 22,500 | 3,884,200 | ||||||||||||||||||||||||||||
Stephen Hasker Global President | 2014 | 882,692 | — | 1,695,105 | 486,200 | 712,500 | — | 22,493 | 3,798,990 | |||||||||||||||||||||||||||
2013 | 800,000 | — | 2,738,220 | 336,600 | 656,250 | — | 7,650 | 4,538,720 | ||||||||||||||||||||||||||||
John Lewis Global President | 2014 | 728,538 | — | 1,689,623 | 523,600 | 562,500 | 12,843 | 32,469 | 3,549,573 | |||||||||||||||||||||||||||
James Cuminale Chief Legal Officer | 2014 | 700,000 | — | 1,427,647 | 392,700 | 697,500 | — | 29,949 | 3,247,796 | |||||||||||||||||||||||||||
2013 | 700,000 | 48,964 | 1,007,840 | 336,600 | 693,750 | — | 24,284 | 2,811,437 | ||||||||||||||||||||||||||||
2012 | 700,000 | — | 279,800 | 952,200 | 900,000 | — | 23,992 | 2,855,992 |
Name and Principal Position | Year | Salary ($) | Bonus1 ($) | Stock ($) | Option ($) | Non-Equity ($) | Change in Pension Earnings4 ($) | All Other Compensation5 ($) | Total ($) | |||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||
Mitch Barns Chief Executive Officer |
| 2017
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| 1,000,000
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| —
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| 7,467,431
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| —
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| 1,700,000
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| 11,553
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| 23,210
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| 10,202,194
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| 2016
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| 1,000,000
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| —
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| 5,737,698
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| 1,657,089
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| 1,700,000
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| 3,186
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| 24,516
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| 10,122,489
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| 2015
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| 1,000,000
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| —
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| 4,937,630
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| 1,500,002
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| 1,545,000
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| 3,316
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| 116,837
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| 9,102,785
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Jamere Jackson Chief Financial Officer |
| 2017
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| 750,000
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| 325,000
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| 2,538,946
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| —
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| 680,000
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| —
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| 8,100
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| 4,302,046
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| 2016
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| 741,154
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| 325,000
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| 2,124,905
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| 607,602
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| 680,000
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| —
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| 7,950
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| 4,486,610
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| 2015
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| 700,000
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| 325,000
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| 1,607,214
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| 496,644
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| 656,250
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| —
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| 10,425
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| 3,795,533
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Steve Hasker Chief Operating Officer |
| 2017
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| 900,000
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| —
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| 2,986,971
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| —
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| 935,000
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| —
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| 23,100
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| 4,845,071
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| 2016
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| 900,000
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| —
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| 2,495,447
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| 718,071
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| 935,000
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| —
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| 26,349
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| 5,074,867
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| 2015
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| 900,000
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| —
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| 1,644,781
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| 509,714
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| 750,000
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| —
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| 29,320
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| 3,833,815
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Eric J. Dale Chief Legal Officer |
| 2017
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| 750,000
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| —
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| 1,194,774
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| —
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| 675,000
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| —
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| 23,100
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| 2,642,874
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| 2016
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| 750,000
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| —
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| 1,069,441
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| 331,416
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| 675,000
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| —
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| 22,950
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| 2,848,807
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Nancy Phillips Chief HR Officer |
| 2017
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| 480,769
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| —
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| 1,294,370
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| —
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| 450,000
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| —
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| 285,091
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| 2,510,230
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1 | Bonus |
For Mr. Jackson, the |
2 | Stock Awards |
Represents the aggregate grant date fair value of |
Values for awards made in |
Of the PRSUs granted in 2017 that vest according to free cash flow, the grant date fair value was computed in accordance with FASB ASC Topic 718 based upon the probable outcome of the performance conditions as of the grant date. Assuming the highest level of performance achievement as of the grant date, the grant date fair value of the PRSUs that vest according to free cash flow would have been: Mr. Barns — $4,141,854; Mr. Jackson — $1,408,259; Mr. Hasker — $1,656,732; Mr. Dale — $662,693; and Ms. Phillips — $717,925. As the PRSUs granted in 2017 that vest according to relative shareholder return are subject to market conditions as defined under FASB ASC Topic 718 and were not subject to performance conditions as defined under FASB ASC Topic 718, they had no maximum grant date fair values that differed from the grant date fair values presented in the table. |
3 | Annual incentive amounts for performance in 2017 were paid 100% in cash on March 9, 2018. |
4 | Change in Pension Value and Nonqualified Deferred Compensation Earnings |
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2018 PROXY STATEMENT 58 |
EXECUTIVE COMPENSATION
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All Other Compensation |
Mr. Barns: financial planning expenses: |
Mr. Jackson: retirement plan contributions: |
Mr. Hasker: financial planning expenses: |
Mr. |
Grants of Plan-Based Awards in 20142017
The following table presents information regarding grants to our Named Executive OfficersNEOs during the fiscal year ended December 31, 2014.2017.
(a) | (b | ) | (c | ) | (d | ) | (e | ) | (f | ) | (g | ) | (h | ) | (i | ) | (j | ) | (k | ) | (l | ) | ||||||||||||||||||||||||
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other (#) | All Other | Exercise | Grant Date ($) | |||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target1 ($) | Maximum ($) | Threshold (#) | Target2 (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||
Mitch Barns | 1,260,000 | 1,800,000 | 3,600,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
2/10/2014 | — | — | — | — | — | — | 4,709 | — | — | 212,517 | ||||||||||||||||||||||||||||||||||||
2/20/2014 | — | — | — | 21,750 | 43,500 | 87,000 | — | — | — | 2,197,064 | ||||||||||||||||||||||||||||||||||||
10/29/2014 | — | — | — | — | — | — | 23,800 | 141,000 | 41.92 | 2,052,376 | ||||||||||||||||||||||||||||||||||||
Jamere Jackson | 490,000 | 700,000 | 1,400,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
3/10/2014 | — | — | — | — | — | — | 81,081 | — | — | 3,749,996 | ||||||||||||||||||||||||||||||||||||
3/10/2014 | — | — | — | 10,000 | 20,000 | 40,000 | — | — | — | 1,006,744 | ||||||||||||||||||||||||||||||||||||
10/29/2014 | — | — | — | — | — | — | 11,000 | 65,000 | 41.92 | 947,320 | ||||||||||||||||||||||||||||||||||||
Brian West | 1,225,000 | 1,750,000 | 3,500,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
2/10/2014 | — | — | — | — | — | — | 8,310 | — | — | 375,030 | ||||||||||||||||||||||||||||||||||||
2/20/2014 | — | — | — | 19,000 | 38,000 | 76,000 | — | — | — | 1,919,274 | ||||||||||||||||||||||||||||||||||||
10/29/2014 | — | — | — | — | — | — | 20,700 | 122,500 | 41.92 | 1,784,044 | ||||||||||||||||||||||||||||||||||||
Stephen Hasker | 630,000 | 900,000 | 1,800,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
2/10/2014 | — | — | — | — | — | — | 4,848 | — | — | 218,790 | ||||||||||||||||||||||||||||||||||||
2/20/2014 | — | — | — | 10,050 | 20,100 | 40,200 | — | — | — | 1,015,195 | ||||||||||||||||||||||||||||||||||||
10/29/2014 | — | — | — | — | — | — | 11,000 | 65,000 | 41.92 | 947,320 | ||||||||||||||||||||||||||||||||||||
John Lewis | 574,000 | 820,000 | 1,640,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
2/10/2014 | — | — | — | — | — | — | 4,543 | — | — | 205,026 | ||||||||||||||||||||||||||||||||||||
2/20/2014 | — | — | — | 9,800 | 19,600 | 39,200 | — | — | — | 989,941 | ||||||||||||||||||||||||||||||||||||
10/29/2014 | — | — | — | — | — | — | 11,800 | 70,000 | 41.92 | 1,018,256 | ||||||||||||||||||||||||||||||||||||
James Cuminale | 647,500 | 925,000 | 1,850,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
2/10/2014 | — | — | — | — | — | — | 5,125 | — | — | 231,291 | ||||||||||||||||||||||||||||||||||||
2/20/2014 | — | — | — | 8,150 | 16,300 | 32,600 | — | — | — | 823,268 | ||||||||||||||||||||||||||||||||||||
10/29/2014 | — | — | — | — | — | — | 8,900 | 52,500 | 41.92 | 765,788 |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards1 | Estimated Future Payouts Under Equity Incentive Plan Awards | |||||||||||||||||||||||||||||||||||||||||||||||
Name (a) | Grant Date (b) | Threshold (c) | Target ($) (d) | Maximum (e) | Threshold3 (#) (c) | Target4 (#) (d) | Maximum5 (#) (e) | All Other (#) (i) | All Other (j) | Exercise or Base | Grant Date and ($) (l) | |||||||||||||||||||||||||||||||||||||
Mitch Barns | 1,400,000 | 2,000,000 | 4,000,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
2/16/2017 | — | — | — | 41,807 | 83,613 | 167,226 | — | — | — | 3,717,434 | ||||||||||||||||||||||||||||||||||||||
11/13/2017 | — | — | — | — | — | — | 103,677 | — | $ | 36.17 | 3,749,997 | |||||||||||||||||||||||||||||||||||||
Jamere Jackson | 560,000 | 800,000 | 1,600,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
2/16/2017 | — | — | — | 14,215 | 28,429 | 56,858 | — | — | — | 1,263,953 | ||||||||||||||||||||||||||||||||||||||
11/13/2017 | — | — | — | — | — | — | 35,250 | — | $ | 36.17 | 1,274,993 | |||||||||||||||||||||||||||||||||||||
Steve Hasker2 | 770,000 | 1,100,000 | 2,200,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
2/16/2017 | — | — | — | 16,723 | 33,445 | 66,890 | — | — | — | 1,486,965 | ||||||||||||||||||||||||||||||||||||||
11/13/2017 | — | — | — | — | — | — | 41,471 | — | $ | 36.17 | 1,500,006 | |||||||||||||||||||||||||||||||||||||
Eric J. Dale | 525,000 | 750,000 | 1,500,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
2/16/2017 | — | — | — | 6,689 | 13,378 | 26,756 | — | — | — | 594,786 | ||||||||||||||||||||||||||||||||||||||
11/13/2017 | — | — | — | — | — | — | 16,588 | — | $ | 36.17 | 599,988 | |||||||||||||||||||||||||||||||||||||
Nancy Phillips | 350,000 | 500,000 | 1,000,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
2/16/2017 | — | — | — | 7,247 | 14,493 | 28,986 | — | — | — | 644,359 | ||||||||||||||||||||||||||||||||||||||
11/13/2017 | — | — | — | — | — | — | 17,971 | — | $ | 36.17 | 650,011 |
1 |
EXECUTIVE COMPENSATION
This equity was forfeited in connection with Mr. Hasker’s departure from the Company. |
3 | Represents |
|
Represents the number of PRSUs awarded under the LTPP. |
5 | Represents 200% of the number of PRSUs awarded under the LTPP. |
6 | Represents the grant date fair values computed in accordance with FASB ASC Topic 718 of the |
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2018 PROXY STATEMENT 59 |
EXECUTIVE COMPENSATION
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards in 2014 Table
Summary Compensation Table
Upon appointment as CEO, effective January 1, 2014, Mr. Barns’ salary was increased from $800,000 to $1,000,000 and his annual incentive target set at $1,800,000. Based on the committee’s full year performance assessment, Mr. Barns was awarded an annual incentive payout of $1,820,000.
Upon hiring, effective March 10, 2014, Mr. Jackson’s base salary is $700,000 and his 2014 annual incentive opportunity is $700,000. Based on the committee’s full year performance assessment, Mr. Jackson was awarded an annual incentive payout of $750,000. Additionally, the Compensation Committee awarded him 81,081 RSUs to compensate him for the loss of unvested equity at his prior employer and approved a cash payment of $2,600,000 to compensate him for the loss of unvested SERP at his prior employer. Mr. Jackson received 50% of this cash payment, equal to $1,300,000, upon hire, which must be repaid in full if his employment terminates within the first year of his employment and 50% of this amount must be repaid if his employment terminates during the following year, in either case unless such termination is not for “cause” or is for “good reason”. The remaining portion of the cash payment will be paid in four equal annual installments of $325,000, commencing on the first anniversary of his hire date as long as he is an employee on the applicable anniversary date. Mr. Jackson is required to reimburse each installment in full if his employment terminates within one year of receipt of each installment unless such termination is not for “cause” or is for “good reason”.
As a result of his promotion to Chief Operating Officer, effective March 10, 2014, Mr. West’s base salary was increased 12% to $950,000, and his 2014 annual incentive opportunity set at $1,750,000. Based on the committee’s full year performance assessment Mr. West was awarded an annual incentive payout of $1,800,000.
Mr. Hasker’s base salary was increased 13% to $900,000 effective March 1, 2014 and his 2014 annual incentive target opportunity was set at $900,000. Based on the committee’s full year performance assessment, Mr. Hasker was awarded an annual incentive payout of $950,000.
Mr. Lewis’ base salary was increased 10% to $770,000 effective August 1, 2014 and his 2014 annual incentive target set at $820,000. Based on the committee’s full year performance assessment, Mr. Lewis was awarded an annual incentive payout of $750,000.
No change was made to Mr. Cuminale’s base salary in 2014 in line with our practice of awarding salary increases in intervals of 24 – 36+ months unless there is a change in role. His annual incentive opportunity is $925,000. Based on the committee’s full year performance assessment Mr. Cuminale was awarded an annual incentive payout of $930,000.
For each NEO, approximately 50% of long-term incentive value is delivered in performance RSUs and 50% is split equally between time-based stock options and RSUs. In addition, 75% of the annual incentive award is paid in cash and disclosed in the Summary Compensation Table as compensation in the performance year, while the remaining 25% is paid in RSUs that will vest in equal annual installments over two years and whose value is disclosed in the Summary Compensation Table as compensation in the year of grant.
Grants of Plan Based Awards in 2014
Except for Mr. Cuminale, each NEO transitioned to a new role in 2014 due to internal promotion, or in the case of Mr. Jackson, external hiring. Annual incentive and long-term incentive targets were established for each NEO, commensurate with their responsibilities. In determining the target opportunities, the committee considered general industry market benchmarks and peer group data provided by Meridian; executives’ total direct compensation mix and prior year award values; individual role responsibilities; company financial performance and an assessment of each executive’s individual performance.
On February 10, 2014, Messrs. Barns, West, Hasker, Lewis and Cuminale were granted annual incentive restricted shares having a value equal to 25% of their 2013 annual incentive cash payout. The awards vest in two equal installments commencing on the anniversary of the grant date.
EXECUTIVE COMPENSATION
Each NEO was awarded performance restricted stock units under the LTPP on February 20, 2014 with the exception of Mr. Jackson whose grant was on his hire date of March 10, 2014.
The performance restricted stock units will be earned at the end of the three-year period January 1, 2014 – December 31, 2016 based on the Company’s performance against the plan metrics (as described under “– Long-Term Incentives – Long-Term Performance Plan (LTPP)”).
On October 29, 2014, each NEO was granted awards of restricted stock units and stock options. Both RSUs and stock options time vest ratably over 4 years on each anniversary of the grant date.
EXECUTIVE COMPENSATION
Outstanding Equity Awards at 20142017 FiscalYear-End
The following table presents information regarding the outstanding equity awards held by each of our Named Executive OfficersNEOs as of December 31, 2014.2017.
Options Awards | Stock Awards | |||||||||||||||||||||||||||||||||
Name | Grant Date | Number of (#) | Number of Securities Underlying Unexercised Options Unexercisable1 (#) | Equity Incentive (#) | Option Exercise ($) | Option Expiration Date | Number of Units of Stock That Have Not Vested2 (#) | Market Value of Units of Stock Not Vested2 ($) | ||||||||||||||||||||||||||
Mitch Barns | 3/5/2007 | 23,390 | — | 6,235 | 16.00 | 3/5/2017 | — | — | ||||||||||||||||||||||||||
3/5/2007 | 9,898 | — | 1,039 | 32.00 | 3/5/2017 | — | — | |||||||||||||||||||||||||||
3/18/2010 | 62,500 | — | — | 18.40 | 3/18/2020 | — | — | |||||||||||||||||||||||||||
5/11/2011 | 56,250 | 18,750 | — | 30.19 | 5/11/2018 | — | — | |||||||||||||||||||||||||||
7/26/2012 | 40,000 | 40,000 | — | 27.98 | 7/26/2019 | 7,808 | 349,236 | |||||||||||||||||||||||||||
2/20/2013 | — | — | — | — | — | 25,000 | 1,118,250 | |||||||||||||||||||||||||||
7/25/2013 | — | — | — | — | — | 41,259 | 1,845,498 | |||||||||||||||||||||||||||
9/25/2013 | 11,750 | 35,250 | — | 36.56 | 9/25/2020 | 6,923 | 309,666 | |||||||||||||||||||||||||||
2/10/2014 | — | — | — | — | — | 4,808 | 215,062 | |||||||||||||||||||||||||||
2/20/2014 | — | — | — | — | — | 43,500 | 1,945,755 | |||||||||||||||||||||||||||
10/29/2014 | — | 141,000 | — | 41.92 | 10/29/2021 | 23,932 | 1,070,478 | |||||||||||||||||||||||||||
Jamere Jackson | 3/10/2014 | — | — | — | — | — | 82,408 | 3,686,110 | ||||||||||||||||||||||||||
3/10/2014 | — | — | — | — | — | 20,000 | 894,600 | |||||||||||||||||||||||||||
10/29/2014 | — | 65,000 | — | 41.92 | 10/29/2021 | 11,061 | 494,759 | |||||||||||||||||||||||||||
Brian West | 3/21/2007 | 212,499 | — | 44,532 | 16.00 | 3/21/2017 | — | — | ||||||||||||||||||||||||||
3/21/2007 | — | — | 7,421 | 32.00 | 3/21/2017 | — | — | |||||||||||||||||||||||||||
3/18/2010 | 62,500 | — | — | 18.40 | 3/18/2020 | — | — | |||||||||||||||||||||||||||
5/11/2011 | 31,250 | 31,250 | — | 30.19 | 5/11/2018 | — | — | |||||||||||||||||||||||||||
7/26/2012 | 37,500 | 75,000 | — | 27.98 | 7/26/2019 | 7,808 | 349,252 | |||||||||||||||||||||||||||
2/20/2013 | — | — | — | — | — | 30,000 | 1,341,900 | |||||||||||||||||||||||||||
7/25/2013 | — | — | — | — | — | 41,259 | 1,845,515 | |||||||||||||||||||||||||||
9/25/2013 | 13,750 | 41,250 | — | 36.56 | 9/25/2020 | 9,231 | 412,903 | |||||||||||||||||||||||||||
2/10/2014 | — | — | — | — | — | 8,485 | 379,534 | |||||||||||||||||||||||||||
2/20/2014 | — | — | — | — | — | 38,000 | 1,699,740 | |||||||||||||||||||||||||||
10/29/2014 | — | 122,500 | — | 41.92 | 10/29/2021 | 20,815 | 931,055 | |||||||||||||||||||||||||||
Stephen Hasker | 12/21/2009 | 23,437 | — | — | 16.00 | 12/21/2019 | — | — | ||||||||||||||||||||||||||
12/21/2009 | 19,531 | — | — | 32.00 | 12/21/2019 | — | — | |||||||||||||||||||||||||||
5/11/2011 | — | 18,750 | — | 30.19 | 5/11/2018 | — | — | |||||||||||||||||||||||||||
7/26/2012 | — | 40,000 | — | 27.98 | 7/26/2019 | 7,808 | 349,252 | |||||||||||||||||||||||||||
2/20/2013 | — | — | — | — | — | 22,000 | 984,060 | |||||||||||||||||||||||||||
7/25/2013 | — | — | — | — | — | 41,259 | 1,845,515 | |||||||||||||||||||||||||||
9/25/2013 | 11,000 | 33,000 | — | 36.56 | 9/25/2020 | 6,923 | 309,666 | |||||||||||||||||||||||||||
2/10/2014 | — | — | — | — | — | 4,950 | 221,414 | |||||||||||||||||||||||||||
2/20/2014 | — | — | — | — | — | 20,100 | 899,073 | |||||||||||||||||||||||||||
10/29/2014 | — | 65,000 | — | 41.92 | 10/29/2021 | 11,061 | 494,759 |
EXECUTIVE COMPENSATION
Options Awards | Stock Awards | |||||||||||||||||||||||||||||||||
Name | Grant Date | Number of (#) | Number of Securities Underlying Unexercised Options Unexercisable1 (#) | Equity Incentive (#) | Option Exercise ($) | Option Expiration Date | Number of Units of Stock That Have Not Vested2 (#) | Market Value of Units of Stock Not Vested2 ($) | ||||||||||||||||||||||||||
John Lewis | 2/2/2007 | — | — | 17,813 | 16.00 | 2/2/2017 | — | — | ||||||||||||||||||||||||||
2/2/2007 | 15,625 | — | 2,968 | 32.00 | 2/2/2017 | — | — | |||||||||||||||||||||||||||
5/11/2011 | 56,250 | 18,750 | — | 30.19 | 5/11/2018 | — | — | |||||||||||||||||||||||||||
7/26/2012 | 40,000 | 40,000 | — | 27.98 | 7/26/2019 | 7,808 | 349,252 | |||||||||||||||||||||||||||
2/20/2013 | — | — | — | — | — | 22,000 | 984,060 | |||||||||||||||||||||||||||
7/25/2013 | — | — | — | — | — | 41,259 | 1,845,515 | |||||||||||||||||||||||||||
9/25/2013 | 11,000 | 33,000 | — | 36.56 | 9/25/2020 | 6,923 | 309,666 | |||||||||||||||||||||||||||
2/10/2014 | — | — | — | — | — | 4,638 | 207,458 | |||||||||||||||||||||||||||
2/20/2014 | — | — | — | — | — | 19,600 | 876,708 | |||||||||||||||||||||||||||
10/29/2014 | — | 70,000 | — | 41.92 | 10/29/2021 | 11,865 | 530,721 | |||||||||||||||||||||||||||
James Cuminale | 2/2/2007 | — | — | 35,625 | 16.00 | 3/21/2017 | — | — | ||||||||||||||||||||||||||
2/2/2007 | — | — | 5,938 | 32.00 | 3/21/2017 | — | — | |||||||||||||||||||||||||||
5/11/2011 | 68,750 | 31,250 | — | 30.19 | 5/11/2018 | — | — | |||||||||||||||||||||||||||
7/26/2012 | 57,500 | 57,500 | — | 27.98 | 7/26/2019 | 5,206 | 232,864 | |||||||||||||||||||||||||||
2/20/2013 | — | — | — | — | — | 20,000 | 894,600 | |||||||||||||||||||||||||||
9/25/2013 | 11,000 | 33,000 | — | 36.56 | 9/25/2020 | 6,923 | 309,666 | |||||||||||||||||||||||||||
2/10/2014 | — | — | — | — | — | 5,233 | 234,072 | |||||||||||||||||||||||||||
2/20/2014 | — | — | — | — | — | 16,300 | 729,099 | |||||||||||||||||||||||||||
10/29/2014 | — | 52,500 | — | 41.92 | 10/29/2021 | 8,949 | 400,289 |
Option Awards5 | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable1 | Number of Securities Underlying Unexercised Options Unexercisable1 | Option Exercise Price | Option Date | Number of Shares or Units of That Vested2 | Market Value of Shares or Units of Stock | Equity Number of vested3 | Equity Incentive Plan or other rights | |||||||||||||||||||||||||||||||||||||||
(#) | (#) | ($) | (#) | ($) | (#) | ($) | ||||||||||||||||||||||||||||||||||||||||||
Mitch Barns | 7/26/2012 | 80,000 | — | 27.98 | 7/26/2019 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
9/25/2013 | 47,000 | — | 36.56 | 9/25/2020 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
10/29/2014 | 105,750 | 35,250 | 41.92 | 10/29/2021 | 6,493 | 236,345 | — | — | ||||||||||||||||||||||||||||||||||||||||
10/29/2015 | 88,757 | 88,758 | 47.95 | 10/29/2022 | 16,674 | 606,934 | — | — | ||||||||||||||||||||||||||||||||||||||||
2/18/2016 | — | — | — | — | 5,703 | 207,589 | — | — | ||||||||||||||||||||||||||||||||||||||||
2/18/2016 | — | — | — | — | — | — | 73,146 | 2,662,514 | ||||||||||||||||||||||||||||||||||||||||
10/20/2016 | 47,892 | 143,679 | 54.05 | 10/20/2023 | 21,683 | 789,261 | — | — | ||||||||||||||||||||||||||||||||||||||||
2/16/2017 | — | — | — | — | — | — | 83,613 | 3,043,513 | ||||||||||||||||||||||||||||||||||||||||
11/13/2017 | — | — | — | — | 104,609 | 3,807,768 | — | — | ||||||||||||||||||||||||||||||||||||||||
Jamere Jackson | 3/10/2014 | — | — | — | — | 22,477 | 818,163 | — | — | |||||||||||||||||||||||||||||||||||||||
10/29/2014 | 48,750 | 16,250 | 41.92 | 10/29/2021 | 3,001 | 109,236 | — | — | ||||||||||||||||||||||||||||||||||||||||
10/28/2015 | 29,249 | 29,249 | 48.35 | 10/28/2022 | 5,236 | 190,590 | — | — | ||||||||||||||||||||||||||||||||||||||||
2/18/2016 | — | — | — | — | 2,422 | 88,161 | — | — | ||||||||||||||||||||||||||||||||||||||||
2/18/2016 | — | — | — | — | — | — | 26,646 | 969,914 | ||||||||||||||||||||||||||||||||||||||||
10/20/2016 | 17,560 | 52,683 | 54.05 | 10/20/2023 | 7,951 | 289,416 | — | — | ||||||||||||||||||||||||||||||||||||||||
2/16/2017 | — | — | — | — | — | — | 28,429 | 1,034,816 | ||||||||||||||||||||||||||||||||||||||||
11/13/2017 | — | — | — | — | 35,567 | 1,294,639 | — | — | ||||||||||||||||||||||||||||||||||||||||
Steve Hasker6 | 10/29/2014 | 48,750 | 16,250 | 41.92 | 10/29/2021 | 3,001 | 109,236 | — | — | |||||||||||||||||||||||||||||||||||||||
10/28/2015 | 30,018 | 30,019 | 48.35 | 10/28/2022 | 5,375 | 195,650 | — | — | ||||||||||||||||||||||||||||||||||||||||
2/18/2016 | — | — | — | — | 2,768 | 100,755 | — | — | ||||||||||||||||||||||||||||||||||||||||
2/18/2016 | — | — | — | — | — | — | 31,348 | 1,141,067 | ||||||||||||||||||||||||||||||||||||||||
10/20/2016 | 20,753 | 62,261 | 54.05 | 10/20/2023 | 9,397 | 342,051 | — | — | ||||||||||||||||||||||||||||||||||||||||
2/16/2017 | — | — | — | — | — | — | 33,445 | 1,217,398 | ||||||||||||||||||||||||||||||||||||||||
11/13/2017 | — | — | — | — | 41,844 | 1,523,122 | — | — | ||||||||||||||||||||||||||||||||||||||||
Eric J. Dale | 10/28/2015 | 18,473 | 18,473 | 48.35 | 10/28/2022 | 3,309 | 120,448 | — | — | |||||||||||||||||||||||||||||||||||||||
2/18/2016 | — | — | — | — | 1,454 | 52,926 | — | — | ||||||||||||||||||||||||||||||||||||||||
2/18/2016 | — | — | — | — | — | — | 12,540 | 456,456 | ||||||||||||||||||||||||||||||||||||||||
10/20/2016 | 9,578 | 28,736 | 54.05 | 10/20/2023 | 4,338 | 157,903 | — | — | ||||||||||||||||||||||||||||||||||||||||
2/16/2017 | — | — | — | — | — | — | 13,378 | 486,959 | ||||||||||||||||||||||||||||||||||||||||
11/13/2017 | — | — | — | — | 16,737 | 609,227 | — | — | ||||||||||||||||||||||||||||||||||||||||
Nancy Phillips | 2/16/2017 | — | — | — | — | — | — | 14,493 | 527,545 | |||||||||||||||||||||||||||||||||||||||
11/13/2017 | — | — | — | — | 18,133 | 660,041 | — | — |
1 | The option awards |
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2018 PROXY STATEMENT 60 |
EXECUTIVE COMPENSATION |
2 | The RSU awards are subject to vesting schedules as follows: |
• |
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date. The |
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• |
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3 | The PRSUs are subject to vesting schedules as follows: |
• | The February 18, 2016 awards are scheduled to vest on December 31, 2018 based on the achievement of free cash flow and relative total shareholder return over a three-year performance period (January 1, 2016 – December 31, 2018). | |
• | The February 16, 2017 awards are scheduled to vest on December 31, 2019 based on the achievement of free cash flow and relative total shareholder return over a three-year performance period (January 1, 2017 – December 31, 2019). |
Provided that the NEO remains employed through the end of the applicable performance period, the PRSUs become vested, earned and non-forfeitable in |
In the table above, the number and market value of PRSUs that vest based on relative total shareholder return reflect maximum performance as actual performance during the performance period that has elapsed through December 31, 2017 was between target and maximum, and the number and market value of shares that vest based on free cash flow reflect target performance as actual performance during the performance period that has elapsed through December 31, 2017 was between threshold and target. The |
EXECUTIVE COMPENSATION
|
Market value is based on the closing price |
5 | For information on vesting upon specified termination events or a change in control, see “– Potential Payments Upon Termination or Change in Control.” |
6 | In connection with his departure, Mr. Hasker’s unvested stock options, RSUs and PRSUs were forfeited. |
2018 PROXY STATEMENT 61 |
EXECUTIVE COMPENSATION |
Option Exercises and Stock Vested in 20142017
The following table presents information regarding the value realized by each of our Named Executive OfficersNEOs upon the exercise of option awards or the vesting of stock awards during the fiscal year ended December 31, 2014.2017.
(a) | (b) | (c) | (d) | (e) | ||||||||||||||
Option Awards | Stock Awards | |||||||||||||||||
Name | Number of Shares (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||||||||||
Mitch Barns | — | — | 16,358 | 778,705 | ||||||||||||||
Jamere Jackson | — | — | — | — | ||||||||||||||
Brian West | 170,704 | 2,483,027 | 17,123 | 812,281 | ||||||||||||||
Stephen Hasker | 131,407 | 2,452,012 | 16,358 | 778,705 | ||||||||||||||
John Lewis | 59,844 | 1,480,613 | 16,358 | 778,705 | ||||||||||||||
James Cuminale | 283,437 | 7,517,510 | 4,868 | 224,772 |
Option Awards | Stock Awards | |||||||||||||||
Number of Shares Acquired on Exercise | Value Realized on Exercise1 | Number of Shares Acquired on Vesting2 | Value Realized on Vesting3 | |||||||||||||
Name | (#) | ($) | (#) | ($) | ||||||||||||
Mitch Barns
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| 62,500
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| 1,403,885
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| 115,752
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| 4,482,974
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Jamere Jackson
|
| —
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| —
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| 58,384
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| 2,397,628
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Steve Hasker
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| 145,718
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| 1,040,209
|
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| 56,807
|
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| 2,241,696
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Eric J. Dale
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| —
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| —
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| 11,876
|
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| 426,974
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Nancy Phillips
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| —
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| —
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| —
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| —
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1 | Reflects the difference between fair market value on the exercise date and the exercise price, multiplied by the number of options exercised. |
2 | Includes shares of Nielsen stock received from the vesting of previously granted RSUs and shares received from the vesting of PRSUs granted in 2015. These PRSUs vested on December 31, 2017 at the end of a three-year performance period, and the number of shares that vested were: 38,956 for Mr. Barns; 12,338 for Mr. Jackson; 12,013 for Mr. Hasker; and 7,401 for Mr. Dale. |
3 | Reflects the fair market value on the vesting date multiplied by the number of shares vested. |
Pension Benefits for 20142017
The following table presents information regarding the pension arrangements with each of our Named Executive OfficersNEOs during the fiscal year ended December 31, 2014.2017.
(a) | (b) | (c) | (d) | (e) | ||||||||||
Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | ||||||||||
Mitch Barns | Qualified Plan | 4.42 | 37,895 | — | ||||||||||
Excess Plan | 4.42 | 27,735 | — | |||||||||||
Jamere Jackson | — | — | — | — | ||||||||||
Brian West | — | — | — | — | ||||||||||
Stephen Hasker | — | — | — | — | ||||||||||
John Lewis | Qualified Plan | 3.92 | 20,270 | — | ||||||||||
Excess Plan | 3.92 | 35,589 | ||||||||||||
James Cuminale | — | — | — | — |
Name | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit | Payments During Last Fiscal Year | ||||||||||||
(#) | ($) | ($) | ||||||||||||||
Mitch Barns
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| Qualified Plan
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| 4.42
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| 47,989
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| —
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| Excess Plan
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| 4.42
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| 35,696
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| —
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Jamere Jackson
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| —
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| —
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| —
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| —
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Steve Hasker
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| —
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| —
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| —
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| —
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Eric J. Dale
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| —
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| —
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| —
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| —
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Nancy Phillips
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| —
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| —
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Assumptions for Present Value of Accumulated Benefit
Present values at December 31, 2014 are2017 were the present value of accumulated benefits as used under ASC960 and were calculated using an interest rate of 4.25%,3.73% for the Qualified Plan (as defined below) benefits and 3.65% for the Excess Plan (as defined below) benefits, an interest credit rate of 3.05% and the white collar retiree RP 2014 table backed off to 2007 mortality tables projected with mortality improvements based on the MMP2007 Scale.SOA scale MP2017. These assumptions are consistent with those used for the financial statements of the Company’s retirement plans.
United States RetirementPension Plans
Effective August 31, 2006, the Company froze its United States qualified andnon-qualified defined benefit retirement plans. No participants may be added and no further benefitsbasic credits (described below) may accrue after this date. The retirement plans, as in existence immediately prior to the freeze, are described below.
We maintain atax-qualified retirement plan (the “Qualified Plan”), a cash-balance pension plan that covers eligible United States employees who have completed at least one year of service. Prior to the freeze, we added monthly basic and investment credits to each participant’s account. The basic credit equalsequaled 3% of a participant’s eligible monthly compensation. At the point of freeze, all basic credits were stopped, but participants continue to receive investment credits.
2018 PROXY STATEMENT 62 |
EXECUTIVE COMPENSATION
Participants became fully vested in their accrued benefits after the earlier of five years of service or when the participant reached normal retirement age (which is the later of age 65 or the fifth anniversary of the date the participant first became eligible to participate in the plan). Unmarried participants receive retirement benefits as a single-life annuity, and married participants receive retirement benefits as a qualifiedjoint-and-survivor annuity. Participants can elect an alternate form of payment such as a straight-life annuity, ajoint-and-survivor annuity, yearscertain-and-life income annuity or a level income annuity option. Lump sum payment of accrued benefits is only available if the benefits do not exceed $5,000. Payment of benefits begins at the later of the participant’s termination of employment or reaching age 40. The definition of compensation includesW-2 earnings plus deferrals minus unusual payments (for example(e.g., stock awards, relocation and tuition reimbursement).
We also maintain anon-qualified retirement plan (the “Excess Plan”) for certain of our management and highly compensated employees. Prior to the freeze, the Excess Plan provided supplemental benefits to individuals whose benefits under the Qualified Plan are limited by the provisions of Section 415 and/or Section 401(a)(17) of the Code. The benefit payable to a participant under the Excess Plan is equal to the difference between the benefit actually paid under the Qualified Plan and the amount that would have been payable had the applicable Code limitations not applied. Although the Excess Plan is considered an unfunded plan and there is no current trust agreement for the Excess Plan, assets have been set aside in a “rabbi trust” fund. It is intended that benefits due under the Excess Plan will be paid from this rabbi trust or from the general assets of the Nielsen entity that employs the participants.
Messrs.Mr. Barns and Lewis areis the only Named Executive OfficersNEO who participateparticipates in the Qualified Plan and the Excess Plan.
Reduced early retirement benefits are available once the participant has reached age 40 and completed 5five years of service. Mr. Barns and Mr. Lewis are bothis eligible for early retirement .Theretirement. The early retirement benefits payable under both plans are cash-balance pension plan actuarially reduced to be equivalent to the benefit payable at normal retirement age for Mr. Barns. For Mr. Lewis, the early retirement benefits payable are the greater of the cash-balance pension plan actuarially reduced to be equivalent to the benefit payable at normal retirement age and the frozen Dun & Bradstreet benefit reduced 3% per year from normal retirement age to age at commencement. The early retirement benefit for the non-qualified plan is the same, with the exception being the frozen Dun & Bradstreet benefit is not reduced for early commencement when performing the comparison outlined above.age.
Nonqualified Deferred Compensation for 20142017
The Company offers a voluntary nonqualified deferred compensation plan in the United States, which allows selected executives the opportunity to defer a significant portion of their base salary and incentive payments to a future date. Earnings on deferred amounts are determined with reference to designated mutual funds. Mr. LewisDale is the only Named Executive Officer with a balance underNEO who participates in this plan. There is no above market rate of return given to executives as defined by the Securities and Exchange Commission. Eligible employees may contribute up to 75% of their base salary and up to 90% of their annual incentive award. Earnings on deferred amounts are determined with reference to designated mutual funds.
The following table presents information regardingnon-qualified deferred compensation arrangements with each of our Named Executive OfficersNEOs during the fiscal year ended December 31, 2014.2017.
(a) | (b) | (c) | (d) | (e) | (f) | |||||||||||||||
Name | Executive Contributions in Last FY1 ($) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY2 ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) | |||||||||||||||
Mitch Barns | — | — | — | — | — | |||||||||||||||
Jamere Jackson | ||||||||||||||||||||
Brian West | — | — | — | — | — | |||||||||||||||
Stephen Hasker | — | — | — | — | — | |||||||||||||||
John Lewis | 325,000 | — | 106,891 | — | 2,050,319 | |||||||||||||||
James Cuminale | — | — | — | — | �� | — |
Executive Contributions in Last FY1 | Registrant Contributions in Last FY | Aggregate Earnings in Last FY2 | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FYE3 | ||||||||||||||||
($) | ($) | ($) | ($) | ($) | ||||||||||||||||
Name (a)
| (b)
| (c)
| (d)
| (e)
| (f)
| |||||||||||||||
Mitch Barns
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| |||||
Jamere Jackson
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| |||||
Steve Hasker
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| |||||
Eric J. Dale
|
| 50,018
|
|
| —
|
|
| 2,896
|
|
| —
|
|
| 66,069
|
| |||||
Nancy Phillips
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
1 | Mr. |
2 |
|
3 | Of the amount reported in this column, $50,018 was previously reported in the Summary Compensation Table. |
2018 PROXY STATEMENT 63 |
EXECUTIVE COMPENSATION |
Potential Payments Upon Termination or Change in Control
The information in this section describes the potential payments and benefits that our NEOs would have received under the Nielsen Holdings plc Severance Policy for Section 16 Officers and United States-Based Senior Executives (the “Severance Policy”), the 2010 Plan and the applicable award agreements thereunder, assuming the specified triggering events occurred on the last business day of fiscal 2017 (December 29, 2017). The information regarding our CEO assumes that the Directors’ Compensation Policy subject to shareholder approval under Proposal No. 7 in this proxy statement was in effect as of such date.
The information below does not include: (1) payments and benefits to the extent they are provided generally to all salaried employees and do not discriminate in scope, terms or operation in favor of the NEOs; (2) distributions under our pension plans; and (3) distributions under our non-qualified deferred compensation plan.
Summary of Potential Payments Upon Termination or Change in Control
Compensation Element | Change in Control | Termination due to Death or Disability | Termination by the Company without Cause or by the NEO for Good Reason | Retirement3 | ||||
Salary outside of change in control protection period1,2 | The NEO is only entitled to base salary continuation during the severance period4 if the NEO is terminated without cause or resigns for good reason. | N/A | CEO – Pay continuation during the severance period consisting of two times the sum of base salary and the average of the annual incentive payment paid for the prior 3 years Other NEOs – Pay continuation during the severance period consisting of one times the sum of base salary and the average of the annual incentive payment paid for the prior 3 years | N/A | ||||
Salary during the change in control protection period1,2 | The NEO is only entitled to base salary continuation during the severance period if the NEO is terminated without cause or resigns for good reason. | N/A | CEO – Pay continuation during the severance period consisting of two times the sum of base salary and the average of the annual incentive payment paid for the prior 3 years Other NEOs – Pay continuation during the severance period consisting of two times the sum of base salary and the average of the annual incentive payment paid for the prior 3 years | N/A | ||||
Annual Incentive Award | The NEO is only entitled to apro-rata portion of his or her annual incentive award payable in a lump sum for the year of termination (based on actual performance) if the NEO is terminated without cause or resigns for good reason. | N/A | Apro-rata portion of the annual incentive award payable in a lump sum for the year in which the termination takes place (based on actual performance). | N/A | ||||
Health & Welfare Benefits | The NEO is only entitled to his or her health and welfare benefits for the NEO and his or her covered family members for the duration of the severance period if the NEO is terminated without cause or resigns for good reason. | N/A | Continued health and welfare benefits for the NEO and his or her covered family members for the duration of the severance period. | N/A | ||||
Stock Options | All unvested options will vest upon a change in control if the acquiring entity does not agree to assume such options. If the options are assumed, they will continue to vest in accordance with their terms. If, during the two-year period following a change in control, the NEO is terminated under circumstances that would give rise to his or her right to severance under any severance policy or agreement, the assumed options will fully vest. | Apro-rata portion of the options that were granted before 2015 and that are scheduled to vest on the next vesting date following the NEO’s termination will vest upon the date of termination, with suchpro-rata portion determined based on the number of days the NEO was employed from the immediately preceding vesting date through the date of termination, relative to 365 days. | Apro-rata portion of the options that are scheduled to vest on the next vesting date following the NEO’s termination will vest upon the date of termination, with suchpro-rata portion determined based on the number of days the NEO was employed from the immediately preceding vesting date through the date of termination, relative to 365 days. | Unvested options are forfeited |
2018 PROXY STATEMENT 64 |
EXECUTIVE COMPENSATION |
Compensation Element | Change in Control | Termination due to Death or Disability | Termination by the Company without Cause or by the NEO for Good Reason | Retirement | ||||
All unvested options that were granted in 2015 or after vest on the date of termination. | ||||||||
RSUs | All unvested RSUs will vest upon a change in control if the acquiring entity does not agree to assume such RSUs. If the RSUs are assumed, they will continue to vest in accordance with their terms. If, during the two-year period following a change in control, the NEO is terminated under circumstances that would give rise to his or her right to severance under any severance policy or agreement, the assumed RSUs will fully vest. | All unvested RSUs vest on the date of termination. | Apro-rata portion of the RSUs that are scheduled to vest on the next vesting date following the NEO’s termination will vest upon the date of termination, with suchpro-rata portion determined based on the number of days the NEO was employed from the immediately preceding vesting date through the date of termination, relative to 365 days. | Unvested RSUs are forfeited | ||||
PRSUs | All unvested PRSUs will vest upon a change in control (based on the target number of PRSUs subject to each outstanding award) if the acquiring entity does not agree to assume such PRSUs. If the PRSUs are assumed, then they will become vested at the target level of performance (without regard to the achievement of the applicable performance criteria) on the last day of the applicablethree-year performance period, if the NEO remains employed by the Company or its successor on such date, or, if earlier, upon the NEO’s termination of employment for any reason other than by the Company or its successor for Cause or by the NEO without Good Reason (and other than due to Retirement). | All unvested PRSUs vest on the date of termination (based on the target number of PRSUs subject to each outstanding award). | The NEO remains eligible to earn a number of PRSUs equal to the product of (i) the total number of PRSUs that would have become vested based on the level of attainment of the applicable performance goals if the NEO had remained employed through the end of thethree-year performance period, and (ii) a fraction, the numerator of which is the number of days in the performance period that have elapsed through the date of termination, and the denominator of which is 1095. As described under the column headed “Change in Control,” if the termination occurs following a change in control, then all PRSUs subject to the award will vest at the target level upon such termination. | The NEO remains eligible to earn a number of PRSUs equal to the product of (i) the total number of PRSUs that would have become vested based on the level of attainment of the applicable performance goals if the NEO had remained employed through the end of thethree-year performance period, and (ii) a fraction, the numerator of which is the number of days in the performance period that have elapsed through the date of termination, and the denominator of which is 1095. As described under the column headed “Change in Control,” if the termination occurs following a change in control, then all PRSUs subject to the award will vest at the target level upon such termination. |
1 | Change in control is defined in the Severance Policy and includes the acquisition of shares of the Company representing more than 40% of the Company’s capital stock; merger, consolidation or reorganization wherepre-transaction shareholders do not continue to hold at least 50% of the Company’s voting power; change in majority of the Board within a12-month period; and liquidation, dissolution or a material asset sale. |
2 | The change in control protection period is defined as the 24 month period following a change in control event. |
3 | “Retirement” means (i) any statutorily mandated retirement date required under applicable law or (ii) such other retirement date as may be approved by the Company. On a case by case basis, the Compensation Committee may approve the continuation of vesting of unvested equity awards upon an NEO’s retirement. |
4 | “Severance period” means (x) for the CEO, the 24-month period immediately following the termination date and (y) for the other NEOs, if the termination date falls outside of the change in control protection period, the 12-month period immediately following the date of termination and, if the termination date falls within the change in control protection period, the 24-month period immediately following the termination date. |
2018 PROXY STATEMENT 65 |
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION |
The severance payments and benefits consisting of salary continuation,Potential Payments Upon Termination or Change in Controlpro-rata
Except annual incentive award and health and welfare benefits continuation are provided pursuant to the terms of the U.S. Severance Policy for Mr. Jackson, if an NEO is terminated bySection 16 Officers and Senior Executives, which applies to the Company without cause or the NEO resigns for good reason (as those termsCEO, CFO and other NEOs. Such payments and benefits are defined in the form of Severance Agreement), subject to their compliance with certain restrictive covenants (as described under “–Restrictive Covenants”), and their execution (without revocation) of a general waiver and release of claims, they will be entitled to severance pay that includes:claims.
|
|
|
If, Mr. Jackson’s employment is terminated by the Company without cause or he resigns for good reason (as those terms are defined in his offer letter), Mr. Jackson is entitled to continue to receive his base salary and health benefits for himself and covered family members for a period of twelve months (with the cost of such health benefit premiums at the active employee rate deducted from his salary continuation payments on an after-tax basis).
IfDecember 29, 2017, an NEO’s employment had been terminated without cause by the Company, or anthe NEO had resigned for good reason, on December 31, 2014, each would have received total payments and benefits as shown in the following table:
Severance Payments and Benefits
Multiple of Base Salary | Base Salary x Multiple $ | Annual Incentive $ | Health & Welfare Benefits $ | Total $ | ||||||||||||||||
Mitch Barns | 1x | 1,000,000 | $ | 1,800,000 | 7,200 | 2,807,200 | ||||||||||||||
Jamere Jackson | 1x | 700,000 | — | 7,200 | 707,200 | |||||||||||||||
Brian West | 2x | 1,900,000 | $ | 1,750,000 | 14,400 | 3,664,400 | ||||||||||||||
Stephen Hasker | 1x | 900,000 | $ | 900,000 | 7,200 | 1,807,200 | ||||||||||||||
John Lewis | 2x | 1,540,000 | $ | 820,000 | 14,400 | 2,374,400 | ||||||||||||||
James Cuminale | 2x | 1,400,000 | $ | 925,000 | 14,400 | 2,339,400 |
Multiple of Base Salary and Average of Prior Three-Year Bonus paid2 | Base Salary x Multiple $ | Average of $ | Annual Incentive Award $ | Health & Welfare $ | Total $ | |||||||||
Mitch Barns
| 2x
| 2,000,000
| 3,640,000
|
| 1,700,000
|
| 7,300
| 7,347,300
| ||||||
Jamere Jackson
| 1x
| 750,000
| 745,000
|
| 680,000
|
| 7,300
| 2,182,300
| ||||||
Steve Hasker1
| —
| —
| —
|
| —
|
| —
| —
| ||||||
Eric J. Dale
| 1x
| 750,000
| 675,000
|
| 675,000
|
| 7,300
| 2,107,300
| ||||||
Nancy Phillips
| 1x
| 480,769
| 450,000
|
| 450,000
|
| 7,300
| 1,388,069
|
1 | Mr. Hasker was not entitled to severance payments and benefits in connection with his departure from the Company. |
2 | In the event of a termination by the Company without cause or by the NEO for good reason during the change in control protection period, the multiple of base salary and average of prior three-year bonus paid is 2x for all NEOs. |
2018 PROXY STATEMENT 66 |
EXECUTIVE COMPENSATION |
In addition, under the applicable form of award agreement under the 2010 Plan if, on December 29, 2017, the NEO’s employment had been terminated for one of the reasons set forth in the table below, the NEO would have been entitled to receive accelerated vesting and/or post-termination continued vesting with respect to the long-term incentive awards granted to such NEO prior to such date as described in the table below and the corresponding footnotes:
NEO
| Termination Due to $
| Termination by $
| Retirement
| |||||||||
Mitch Barns | ||||||||||||
Stock Options |
|
— |
(1) |
|
— |
(1) |
|
— |
| |||
RSUs |
|
5,452,345 |
(2) |
|
536,043 |
(2) |
|
— |
| |||
PRSUs |
|
8,103,332 |
(3,4) |
|
— |
(4) |
|
—(4) |
| |||
Total |
|
13,555,677 |
|
|
536,043 |
|
|
— |
| |||
Jamere Jackson | ||||||||||||
Stock Options |
|
— |
(1) |
|
— |
(1) |
|
— |
| |||
RSUs |
|
2,545,157 |
(2) |
|
863,716 |
(2) |
|
— |
| |||
PRSUs |
|
2,764,034 |
(3,4) |
|
— |
(4) |
|
—(4) |
| |||
Total |
|
5,309,191 |
|
|
863,716 |
|
|
— |
| |||
Steve Hasker5 | ||||||||||||
Stock Options |
|
— |
|
|
— |
|
|
— |
| |||
RSUs |
|
— |
|
|
— |
|
|
— |
| |||
PRSUs |
|
— |
|
|
— |
|
|
— |
| |||
Total |
| —
|
|
|
— |
|
|
— |
| |||
Eric J. Dale | ||||||||||||
Stock Options |
|
— |
(1) |
|
— |
(1) |
|
— |
| |||
RSUs |
|
940,503 |
(2) |
|
103,132 |
(2) |
|
— |
| |||
PRSUs |
|
1,398,888 |
(3) |
|
— |
(4) |
|
—(4) |
| |||
Total |
|
2,339,392 |
|
|
103,132 |
|
|
— |
| |||
Nancy Phillips | ||||||||||||
Stock Options |
|
— |
(1) |
|
— |
(1) |
|
— |
| |||
RSUs |
|
660,041 |
(2) |
|
32,548 |
(2) |
|
— |
| |||
PRSUs |
|
527,545 |
(3) |
|
— |
(4) |
|
—(4) |
| |||
Total |
|
1,187,586 |
|
|
32,548 |
|
|
— |
|
1 | The amount shown is calculated by multiplying (a) the total number of unvested options held by the NEO on December 29, 2017 that would have been accelerated on that date, as described in the “Summary of Potential Payments Upon Termination or Change in Control” table by (b) the difference between (i) $36.40, which was the closing price of a common share of the Company on December 29, 2017 and (ii) the applicable exercise price of the unvested options. Options that had an exercise price above the December 29, 2017 closing price are not reflected in the table. |
2 | The amount shown is calculated by multiplying (a) the total number of unvested RSUs held by the NEO on December 29, 2017 that would have been accelerated on that date, as described in the “Summary of Potential Payments Upon Termination or Change in Control” table by (b) $36.40, which was the closing price of a common share of the Company on December 29, 2017. |
3 | The amount shown is calculated by multiplying (a) the total target number of unvested PRSUs that were granted in 2015 or after, held by the NEO on December 31, 2017 that would have been accelerated on that date, as described in the “Summary of Potential Payments Upon Termination or Change in Control” table by (b) $36.40, which was the closing price of a common share of the Company on December 29, 2017. |
4 | No amount has been included for thepro-rata portion of the PRSUs that continue to be eligible to vest because, as of the date hereof, it is not known if, or at what level, the applicable performance metrics will be achieved. If such termination had occurred following a change in control the PRSUs would have vested at target. For these amounts, see table below “Accelerated Vesting of Equity Awards if Not Assumed in Change in Control”. |
5 | Mr. Hasker was not entitled to severance benefits in connection with his departure from the Company. |
2018 PROXY STATEMENT 67 |
EXECUTIVE COMPENSATION |
In addition, on a change in control, if the acquiring entity does not assume the awards or provide for the issuance of substitute awards on an equitable basis, any unvested options or RSUs granted in 2011, 2012, 20132014, 2015, 2016 and 20142017 under the 2010 Plan, as amended, would become vested and exercisable in full, and any unearned, unvested performance RSUsPRSUs under the LTPP would become vested at 100% of the target award. Messrs. Barns, West, Lewis and Cuminale have options granted to them in 2007 under the 2006 Plan that did not vest because the performance-vesting condition was not met. These options will expire in 2017 unless there is a change in control that meets specified return objectives for the Sponsors.
Mr. Cuminale’s severance agreement formerly provided that he may be entitled to receive an excise tax gross-up payment in the event that payments and benefits (including vesting of equity incentives) that he receives (whether or not his employment terminates) in connection with a change in control of the Company (as defined under Section 280G of the Code) become subject to an excise tax commonly referred to as a “golden parachute” excise tax. However, no tax-gross up will be paid if certain cash payments are reduced by an amount necessary so as not to give rise to such excise taxes, so long as the remaining cash payments due to Mr. Cuminale are at least 90% of all cash payments that would otherwise be payable. The potential payments and benefits due to Mr. Cuminale in the event of a change in control on December 31, 2014, with or without termination, would not have incurred an excise tax liability and therefore, no gross-up payment would have been due to Mr. Cuminale. Mr. Cuminale waived this provision on February 17, 2015.
EXECUTIVE COMPENSATION
As of December 31, 2014,2017, the value of any accelerated vesting of options and RSUs would be as set forth in the following table. This includes the value
Accelerated Vesting of options and RSUs awardedEquity Awards if Not Assumed in 2011, 2012, 2013 and 2014 which would vest if not assumed by the acquiring entity.Change in Control1
Name | Grant Date | Unvested Options | Exercise Price | Unvested RSUs | LTPP | FMV as of 12/31/2014 | Value of Accelerated Unvested Options & RSUs & LTPP | Grant
| Unvested Options
| Exercise Price
| Unvested RSUs
| Unvested PRSUs
| Fair Market Value as of
| Value of Accelerated Unvested Options & RSUs & PRSUs
| ||||||||||||||||||||||||||||||||||||||||
Mitch Barns | 3/5/2007 | 6,235 | 16.00 | — | — | $ | 44.73 | $ | 179,132 |
| 10/29/2014
|
|
| 35,250
|
|
| 41.92
|
|
| $36.40
|
|
| $ 0
|
| ||||||||||||||||||||||||||||||
| 10/29/2014
|
|
| 6,493
|
|
| $36.40
|
|
| $ 236,345
|
| |||||||||||||||||||||||||||||||||||||||||||
| 2/19/2015
|
|
| —
|
|
| —
|
|
| 65,860
|
|
| $36.40
|
|
| $ 2,397,304
|
| |||||||||||||||||||||||||||||||||||||
| 10/29/2015
|
|
| 88,758
|
|
| 47.95
|
|
| $36.40
|
|
| $ 0
|
| ||||||||||||||||||||||||||||||||||||||||
| 10/29/2015
|
|
| 16,674
|
|
| $36.40
|
|
| $ 606,934
|
| |||||||||||||||||||||||||||||||||||||||||||
| 2/18/2016
|
|
| —
|
|
| —
|
|
| 5,703
|
|
| $36.40
|
|
| $ 207,589
|
| |||||||||||||||||||||||||||||||||||||
3/5/2007 | 1,039 | 32.00 | — | — | $ | 44.73 | $ | 13,226 | ||||||||||||||||||||||||||||||||||||||||||||||
5/11/2011 | 18,750 | 30.19 | — | — | $ | 44.73 | $ | 272,625 |
| 2/18/2016
|
|
| —
|
|
| —
|
|
| —
|
|
| 73,146
|
|
| $36.40
|
|
| $ 2,662,514
|
| |||||||||||||||||||||||||
7/26/2012 | 40,000 | 27.98 | — | — | $ | 44.73 | $ | 670,000 | ||||||||||||||||||||||||||||||||||||||||||||||
7/26/2012 | — | — | 7,808 | — | $ | 44.73 | $ | 349,252 |
| 10/20/2016
|
|
| 143,679
|
|
| 54.05
|
|
| $36.40
|
|
| $ 0
|
| |||||||||||||||||||||||||||||||
2/20/2013 | — | — | — | 25,000 | $ | 44.73 | $ | 1,118,250 | ||||||||||||||||||||||||||||||||||||||||||||||
7/25/2013 | — | — | 41,259 | — | $ | 44.73 | $ | 1,845,515 |
| 10/20/2016
|
|
| 21,683
|
|
| $36.40
|
|
| $ 789,261
|
| ||||||||||||||||||||||||||||||||||
9/25/2013 | 35,250 | 36.56 | — | — | $ | 44.73 | $ | 287,993 | ||||||||||||||||||||||||||||||||||||||||||||||
9/25/2013 | — | — | 6,923 | — | $ | 44.73 | $ | 309,666 |
| 2/16/2017
|
|
| —
|
|
| —
|
|
| 83,613
|
|
| $36.40
|
|
| $ 3,043,513
|
| ||||||||||||||||||||||||||||
2/10/2014 | — | — | 4,808 | $ | 44.73 | $ | 215,062 | |||||||||||||||||||||||||||||||||||||||||||||||
2/20/2014 | — | — | — | 43,500 | $ | 44.73 | $ | 1,945,755 |
| 11/13/2017
|
|
| 104,609
|
|
| $36.40
|
|
| $ 3,807,768
|
| ||||||||||||||||||||||||||||||||||
10/29/2014 | 141,000 | 41.92 | — | — | $ | 44.73 | $ | 396,210 | ||||||||||||||||||||||||||||||||||||||||||||||
10/29/2014 | — | — | 23,932 | $ | 44.73 | $ | 1,070,478 |
| $13,751,228
|
| ||||||||||||||||||||||||||||||||||||||||||||
$ | 8,673,163 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Jamere Jackson | 3/10/2014 | — | — | 82,408 | — | $ | 44.73 | $ | 3,686,110 |
| 3/10/2014
|
|
| —
|
|
| —
|
|
| 22,477
|
|
| $36.40
|
|
| $ 818,163
|
| |||||||||||||||||||||||||||
3/10/2014 | — | — | — | 20,000 | $ | 44.73 | $ | 894,600 | ||||||||||||||||||||||||||||||||||||||||||||||
10/29/2014 | 65,000 | 41.92 | — | — | $ | 44.73 | $ | 182,650 |
| 10/29/2014
|
|
| 16,250
|
|
| 41.92
|
|
| $36.40
|
|
| $ 0
|
| |||||||||||||||||||||||||||||||
10/29/2014 | 11,061 | $ | 44.73 | $ | 494,759 | |||||||||||||||||||||||||||||||||||||||||||||||||
$ | 5,258,118 |
| 10/29/2014
|
|
| 3,001
|
|
| $36.40
|
|
| $ 109,236
|
| |||||||||||||||||||||||||||||||||||||||||
Brian West | 3/21/2007 | 44,532 | 16.00 | — | — | $ | 44.73 | $ | 1,279,404 | |||||||||||||||||||||||||||||||||||||||||||||
3/21/2007 | 7,421 | 32.00 | — | — | $ | 44.73 | $ | 94,469 | ||||||||||||||||||||||||||||||||||||||||||||||
5/11/2011 | 31,250 | 30.19 | — | — | $ | 44.73 | $ | 454,375 |
| 2/19/2015
|
|
| —
|
|
| —
|
|
| 20,860
|
|
| $36.40
|
|
| $ 759,304
|
| ||||||||||||||||||||||||||||
7/26/2012 | 75,000 | 27.98 | — | — | $ | 44.73 | $ | 1,256,250 | ||||||||||||||||||||||||||||||||||||||||||||||
7/26/2012 | — | — | 7,808 | — | $ | 44.73 | $ | 349,252 |
| 10/28/2015
|
|
| 29,249
|
|
| 48.35
|
|
| $36.40
|
|
| $ 0
|
| |||||||||||||||||||||||||||||||
2/20/2013- | — | — | — | 30,000 | $ | 44.73 | $ | 1,341,900 | ||||||||||||||||||||||||||||||||||||||||||||||
7/25/2013 | — | — | 41,259 | — | $ | 44.73 | $ | 1,845,515 |
| 10/28/2015
|
|
| 5,236
|
|
| $36.40
|
|
| $ 190,590
|
| ||||||||||||||||||||||||||||||||||
9/25/2013 | 41,250 | 36.56 | — | — | $ | 44.73 | $ | 337,013 | ||||||||||||||||||||||||||||||||||||||||||||||
9/25/2013 | — | — | 9,231 | — | $ | 44.73 | $ | 412,903 |
| 2/18/2016
|
|
| —
|
|
| —
|
|
| 2,422
|
|
| $36.40
|
|
| $ 88,161
|
| ||||||||||||||||||||||||||||
2/10/2014 | — | — | 8,485 | — | $ | 44.73 | $ | 379,534 | ||||||||||||||||||||||||||||||||||||||||||||||
2/20/2014 | — | — | — | 38,000 | $ | 44.73 | $ | 1,699,740 |
| 2/18/2016
|
|
| —
|
|
| —
|
|
| 26,646
|
|
| $36.40
|
|
| $ 969,914
|
| ||||||||||||||||||||||||||||
10/29/2014 | 122,500 | 41.92 | — | — | $ | 44.73 | $ | 344,225 | ||||||||||||||||||||||||||||||||||||||||||||||
10/29/2014 | — | — | 20,815 | — | $ | 44.73 | $ | 931,055 |
| 10/20/2016
|
|
| 52,683
|
|
| 54.05
|
|
| $36.40
|
|
| $ 0
|
| |||||||||||||||||||||||||||||||
$ | 10,725,635 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Stephen Hasker | 5/11/2011 | 18,750 | 30.19 | — | — | $ | 44.73 | $ | 272,625 | |||||||||||||||||||||||||||||||||||||||||||||
| 10/20/2016
|
|
| 7,951
|
|
| $36.40
|
|
| $ 289,416
|
| |||||||||||||||||||||||||||||||||||||||||||
| 2/16/2017
|
|
| —
|
|
| —
|
|
| 28,429
|
|
| $36.40
|
|
| $ 1,034,816
|
| |||||||||||||||||||||||||||||||||||||
| 11/13/2017
|
|
| 35,567
|
|
| $36.40
|
|
| $ 1,294,639
|
| |||||||||||||||||||||||||||||||||||||||||||
| $ 5,554,240
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Steve Hasker2
|
| 10/29/2014
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| |||||||||||||||||||||||||||||||||||||||
7/26/2012 | 40,000 | 27.98 | — | — | $ | 44.73 | $ | 670,000 | ||||||||||||||||||||||||||||||||||||||||||||||
7/26/2012 | — | — | 7,808 | — | $ | 44.73 | $ | 349,252 |
| 10/29/2014
|
|
| —
|
|
| —
|
|
| —
|
| ||||||||||||||||||||||||||||||||||
2/20/2013 | — | — | — | 22,000 | $ | 44.73 | $ | 984,060 | ||||||||||||||||||||||||||||||||||||||||||||||
7/25/2013 | — | — | 41,259 | — | $ | 44.73 | $ | 1,845,515 |
| 2/19/2015
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| ||||||||||||||||||||||||||||
9/25/2013 | 33,000 | 36.56 | — | — | $ | 44.73 | $ | 269,610 | ||||||||||||||||||||||||||||||||||||||||||||||
9/25/2013 | — | — | 6,923 | — | $ | 44.73 | $ | 309,666 |
| 10/28/2015
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| |||||||||||||||||||||||||||||||
2/10/2014 | — | — | 4,950 | — | $ | 44.73 | $ | 221,414 | ||||||||||||||||||||||||||||||||||||||||||||||
2/20/2014 | — | — | — | 20,100 | $ | 44.73 | $ | 899,073 |
| 10/28/2015
|
|
| —
|
|
| —
|
|
| —
|
| ||||||||||||||||||||||||||||||||||
10/29/2014 | 65,000 | 41.92 | — | — | $ | 44.73 | $ | 182,650 | ||||||||||||||||||||||||||||||||||||||||||||||
10/29/2014 | — | — | 11,061 | — | $ | 44.73 | $ | 494,759 |
| 2/18/2016
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| ||||||||||||||||||||||||||||
$ | 6,498,623 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/18/2016
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| |||||||||||||||||||||||||||||||||||||
| 10/20/2016
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| ||||||||||||||||||||||||||||||||||||||||
| 10/20/2016
|
|
| —
|
|
| —
|
|
| —
|
| |||||||||||||||||||||||||||||||||||||||||||
| 2/16/2017
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| —
|
| |||||||||||||||||||||||||||||||||||||
| 11/13/2017
|
|
| —
|
|
| —
|
|
| —
|
| |||||||||||||||||||||||||||||||||||||||||||
2018 PROXY STATEMENT 68 |
EXECUTIVE COMPENSATION |
EXECUTIVE COMPENSATION
Name
| Grant
| Unvested Options
| Exercise Price
| Unvested RSUs
| Unvested PRSUs
| Fair Market Value as of
| Value of Accelerated Unvested Options & RSUs & PRSUs
| |||||||||||||||||||||
Eric J. Dale
|
| 8/3/2015
|
|
| —
|
|
| —
|
|
| —
|
|
| 12,513
|
|
| $36.40
|
|
| $ 455,473
|
| |||||||
| 10/28/2015
|
|
| 18,473
|
|
| 48.35
|
|
| $36.40
|
|
| $ 0
|
| ||||||||||||||
| 10/28/2015
|
|
| 3,309
|
|
| $36.40
|
|
| $ 120,448
|
| |||||||||||||||||
| 2/18/2016
|
|
| —
|
|
| —
|
|
| 1,454
|
|
| $36.40
|
|
| $ 52,926
|
| |||||||||||
| 2/18/2016
|
|
| —
|
|
| —
|
|
| 12,540
|
|
| $36.40
|
|
| $ 456,456
|
| |||||||||||
| 10/20/2016
|
|
| 28,736
|
|
| 54.05
|
|
| $36.40
|
|
| $ 0
|
| ||||||||||||||
| 10/20/2016
|
|
| 4,338
|
|
| $36.40
|
|
| $ 157,903
|
| |||||||||||||||||
| 2/16/2017
|
|
| —
|
|
| —
|
|
| 13,378
|
|
| $36.40
|
|
| $ 486,959
|
| |||||||||||
| 11/13/2017
|
|
| 16,737
|
|
| $36.40
|
|
| $ 609,227
|
| |||||||||||||||||
| $ 2,339,392
|
| ||||||||||||||||||||||||||
Nancy Phillips
|
| 2/16/2017
|
|
| —
|
|
| —
|
|
| 14,493
|
|
| $36.40
|
|
| $ 527,545
|
| ||||||||||
| 11/13/2017
|
|
| 18,133
|
|
| $36.40
|
|
| $ 660,041
|
| |||||||||||||||||
| $ 1,187,586
|
|
Name | Grant Date | Unvested Options | Exercise Price | Unvested RSUs | LTPP | FMV as of 12/31/2014 | Value of Accelerated Unvested Options & RSUs & LTPP | |||||||||||||||||||
John Lewis | 2/2/2007 | 17,813 | 16.00 | — | — | $ | 44.73 | $ | 511,767 | |||||||||||||||||
2/2/2007 | 2,968 | 32.00 | — | — | $ | 44.73 | $ | 37,783 | ||||||||||||||||||
5/11/2011 | 18,750 | 30.19 | — | — | $ | 44.73 | $ | 272,625 | ||||||||||||||||||
7/26/2012 | 40,000 | 27.98 | — | — | $ | 44.73 | $ | 670,000 | ||||||||||||||||||
7/26/2012 | — | — | 7,808 | — | $ | 44.73 | $ | 349,252 | ||||||||||||||||||
2/20/2013 | — | — | — | 22,000 | $ | 44.73 | $ | 984,060 | ||||||||||||||||||
7/25/2013 | — | — | 41,259 | — | $ | 44.73 | $ | 1,845,515 | ||||||||||||||||||
9/25/2013 | 33,000 | 36.56 | — | — | $ | 44.73 | $ | 269,610 | ||||||||||||||||||
9/25/2013 | — | — | 6,923 | — | $ | 44.73 | $ | 309,666 | ||||||||||||||||||
2/10/2014 | — | — | 4,638 | — | $ | 44.73 | $ | 207,458 | ||||||||||||||||||
2/20/2014 | — | — | — | 19,600 | $ | 44.73 | $ | 876,708 | ||||||||||||||||||
10/29/2014 | 70,000 | 41.92 | — | — | $ | 44.73 | $ | 196,700 | ||||||||||||||||||
10/29/2014 | 11,865 | $ | 44.73 | $ | 530,721 | |||||||||||||||||||||
$ | 7,061,865 | |||||||||||||||||||||||||
James Cuminale | 2/2/2007 | 35,625 | 16.00 | — | — | $ | 44.73 | $ | 1,023,506 | |||||||||||||||||
2/2/2007 | 5,938 | 32.00 | — | — | $ | 44.73 | $ | 75,591 | ||||||||||||||||||
5/11/2011 | 31,250 | 30.19 | — | — | $ | 44.73 | $ | 454,375 | ||||||||||||||||||
7/26/2012 | 57,500 | 27.98 | — | — | $ | 44.73 | $ | 963,125 | ||||||||||||||||||
7/26/2012 | — | — | 5,206 | — | $ | 44.73 | $ | 232,864 | ||||||||||||||||||
2/20/2013 | — | — | — | 20,000 | $ | 44.73 | $ | 894,600 | ||||||||||||||||||
9/25/2013 | 33,000 | 36.56 | — | — | $ | 44.73 | $ | 269,610 | ||||||||||||||||||
9/25/2013 | — | — | 6,923 | — | $ | 44.73 | $ | 309,666 | ||||||||||||||||||
2/10/2014 | — | — | 5,233 | — | $ | 44.73 | $ | 234,072 | ||||||||||||||||||
2/20/2014 | — | — | — | 16,300 | $ | 44.73 | $ | 729,099 | ||||||||||||||||||
10/29/2014 | 52,500 | 41.92 | — | — | $ | 44.73 | $ | 147,525 | ||||||||||||||||||
10/29/2014 | — | — | 8,949 | — | $ | 44.73 | $ | 400,289 | ||||||||||||||||||
$ | 5,734,322 |
1 | If the awards were assumed and the NEO was terminated under circumstances entitling him or her to severance immediately following the change in control, the executive’s equity awards would receive the same accelerated vesting treatment as shown in the table above. |
2 | Mr. Hasker was not entitled to severance benefits in connection with his departure from the Company. |
Restrictive Covenants
Pursuant to the severance agreements of the Named Executive Officers, (except in Mr. Jackson’s case, pursuant to the terms of a restrictive covenant agreementagreements executed in conjunction with histheir offer letter), theyletters, the NEOs have agreed not to disclose any Company confidential information at any time during or after their employment with Nielsen. In addition, they have agreed that, for the duration of their severance period following a termination of their employment with Nielsen, they will not solicit Nielsen’s employees or customers or materially interfere with any of Nielsen’s business relationships. They have also agreed not to act as an employee, investor or in another significant function in any business that directly or indirectly competes with any business of the Company.
CEO Pay Compared to Median Employee
2017 Compensation | ||||
CEO, Mitch Barns | $10,202,194 | |||
Median Employee | $ 21,468 | |||
Compensation Ratio | 475:1 |
Methodology
To identify the median of the annual compensation of all of our employees and to determine the annual total compensation of the median employee, we used the following methodology.
We determined that, as of October 1, 2017, our employee population consisted of 47,614 individuals working across the globe. Our employee population, after excluding our non-U.S. employees (2,371) and an estimated number of employees from our recent acquistions (2,100), as permitted by the SEC’s rules, as described below, consisted of 43,143 individuals.
2018 PROXY STATEMENT 69 |
EXECUTIVE COMPENSATION |
Under the SEC’s rules, we are permitted to exclude from our employee population used to determine the median employee up to 5% of our non-US associates provided that all associates from that jurisdiction are excluded. We excluded the following jurisdictions and corresponding number of associates.
Country | Employee Count | |||
Algeria | 126 | |||
Belarus | 68 | |||
Kazakhstan | 220 | |||
Montenegro | 16 | |||
Nepal | 42 | |||
Nicaragua | 39 | |||
Sri Lanka | 187 | |||
Tanzania | 33 | |||
Tunisia | 25 | |||
Uganda | 34 | |||
Venezuela | 158 | |||
Vietnam | 1,423 |
We excluded from our employee population those who became employees as a result of our acquisitions of Gracenote, Rhiza, vBrand and Visual IQ and estimate that we excluded approximately 2,100 individuals.
After applying the permitted adjustments to our employee population, we applied a compensation measure of base salary for the annual period from October 1, 2016 through September 30, 2017 and determined that our median employee is located in Latin America.
In order to calculate the ratio, we used the CEO’s 2017 total compensation reported in the Summary Compensation Table and determined the median employee’s 2017 total compensation assuming that employee’s compensation would have been reportable in the Summary Compensation Table. Such median employee’s total compensation for 2017 included base salary, annual incentive payments, the fair value of equity grants made in 2017, allowances received and Company contributions towards retirement plans.
Approximately 9% of our global employees are part-time and/or temporary/seasonal workers.
Nielsen employs approximately 22,000 employees in data operations including those who are engaged in field acquisition of data in areas where data cannot be electronically obtained and in panel administration (field and call centers). These field auditors visit smaller retail stores to measure and record inventory movement and perform price checks. Approximately 80% of these data operations employees work outside of the U.S., throughout the world.
No exemptions from our calculation were taken based on data privacy or cost of living.
If we were to calculate the CEO pay compared to the median employee of our global workforce excluding the field workers the ratio would be 208:1. The ratio of our CEO’s compensation to the median employee located in the United States is 122:1.
This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
2018 PROXY STATEMENT 70 |
In accordance with the requirements of the UK Companies Act 2006, the UK Annual Report and Accounts contains:
1. | a statement by the Chairperson of the Compensation Committee of the Board of Directors (the “Chairperson’s Statement”); |
2. | a directors’ compensation policy (the “Directors’ Compensation Policy”); and |
3. | the annual report on directors’ compensation (the “Annual Report on Directors’ Compensation”), setting out directors’ compensation for the year ended December 31, 2017. |
The Chairperson’s Statement and the Annual Report on Directors’ Compensation (collectively the “Directors’ Compensation Report”) is reproduced in Annex A to this proxy statement. An annualnon-binding advisory shareholder vote is required on the Directors’ Compensation Report. While the results of this vote arenon-binding and advisory in nature (which means the Directors’ entitlements to compensation are not conditional upon the resolution being passed), the Board intends to carefully consider the results of this vote. The affirmative vote of a majority of the votes cast at the Annual Meeting is required to approve this proposal.
The Directors’ Compensation Policy (referred to in Item 2 above), is subject to a separate binding shareholder vote as set forth in Proposal 7 of this proxy statement.
![]() | The Board of Directors recommends that the shareholders vote “FOR” the approval of the Directors’ Compensation Report (items 1 and 3 above). |
2018 PROXY STATEMENT 71 |
In accordance with the requirements of the UK Companies Act 2006, companies incorporated in the UK whose shares are publicly listed (whether in or outside of the UK) must submit their Directors’ Compensation Policy to a binding shareholders’ vote at least once every three years. The Company’s Directors’ Compensation Policy was previously approved by shareholders at the Company’s 2016 annual meeting of shareholders, but as the Company is proposing to make changes to the Directors’ Compensation Policy, it is being put to a shareholder vote at the Annual Meeting. The Company’s Directors’ Compensation Policy (including details of the proposed changes) is set out in the UK Annual Report and Accounts and is reproduced in Annex B to this proxy statement.
The Directors’ Compensation Policy sets out the Company’s forward-looking policy on directors’ compensation and all directors’ compensation must be paid in accordance with the Directors’ Compensation Policy. If the Directors’ Compensation Policy is approved, it will be valid without requiring additional shareholder approval until December 31, 2021. It is intended that, unless required earlier, the Company’s shareholders will next be asked to approve the Directors’ Compensation Policy at the 2021 annual general meeting of shareholders.
If the Directors’ Compensation Policy is not approved by the affirmative vote of a majority of shareholders at this Annual Meeting, the Company will, if and to the extent permitted by the UK Companies Act 2006, continue to make payments to directors in accordance with existing obligations and will seek shareholder approval for a revised policy as soon as practicable after this Annual Meeting.
![]() | The Board of Directors recommends that the shareholders vote “FOR” the approval of the Directors’ Compensation Policy. |
2018 PROXY STATEMENT 72 |
This section is provided in accordance with applicable SEC rules. The Compensation Committee reviews director compensation. The Compensation Committee’s objectives are to compensate our directors in a manner that attracts and retains highly qualified directors and aligns their interests with those of our long-term shareholders.
In 2017, the Compensation Committee engaged its independent compensation advisory firm, Meridian, to assist the Compensation Committee in its review of the competitiveness and structure of the Company’s compensation to independent directors. This review included a benchmark of our director compensation against 20 companies, including the companies that our Compensation Committee examines as a source of benchmarking data when examining the competitiveness of our executive compensation practices. After completing its review, the Compensation Committee recommended no change in director compensation for 2018.
Director CompensationDIRECTOR COMPENSATION FOR THE 2017 FISCAL YEAR
The following table provides information on the 2017 compensation ofnon-management directors who served for all or a part of 2017. We also reimburse directors for reasonableout-of-pocket expenses attendant to their Board service.
Name |
| Fees Earned or Paid in Cash1
($) |
|
| Stock Awards2
($) |
|
| Total
($) |
| |||
James A. Attwood Jr. |
|
— |
|
|
390,000 |
|
|
390,000 |
| |||
David L. Calhoun3 |
|
— |
|
|
31,556 |
|
|
31,556 |
| |||
Guerrino De Luca |
|
16,044 |
|
|
84,603 |
|
|
100,647 |
| |||
Karen M. Hoguet |
|
105,000 |
|
|
160,000 |
|
|
265,000 |
| |||
James M. Kilts4 |
|
52,088 |
|
|
160,000 |
|
|
212,088 |
| |||
Harish Manwani |
|
84,000 |
|
|
160,000 |
|
|
244,000 |
| |||
Kathryn Marinello3 |
|
— |
|
|
39,444 |
|
|
39,444 |
| |||
Robert C. Pozen |
|
— |
|
|
255,000 |
|
|
255,000 |
| |||
Vivek Ranadivé3 |
|
— |
|
|
31,556 |
|
|
31,556 |
| |||
David Rawlinson |
|
80,000 |
|
|
160,000 |
|
|
240,000 |
| |||
Javier G. Teruel |
|
— |
|
|
240,000 |
|
|
240,000 |
| |||
Lauren Zalaznick |
|
— |
|
|
240,000 |
|
|
240,000 |
|
1 | In 2017, each of our independent directors were entitled to receive an annual cash retainer of $80,000. In addition to this annual cash retainer, the Board Chairperson was also entitled to receive annual compensation in the amount of $150,000, with either (a) half payable in quarterly cash installments and the other half payable in quarterly installments in the form of Deferred Stock Units (“DSUs”) or (b) the entire amount payable in DSUs. Chairpersons of the Audit Committee, the Compensation Committee and the Nomination and Corporate Governance Committee were also entitled to receive an additional annual cash retainer of $25,000, $20,000 and $15,000, respectively. All cash fees are payable quarterly. |
Under the Directors Deferred Compensation Plan (the “DCP”), a director is eligible to defer any or all of the amount of his or her cash retainer in the form of DSUs. The number of DSUs credited to the director’s DSU account in lieu of his or her deferred fees is based on the closing trading price of a Nielsen share on the date the cash fees would otherwise be payable. |
In 2017, Messrs. Attwood, Calhoun, Pozen, Ranadivé and Teruel and Mses. Marinello and Zalaznick elected to defer 100% of their cash retainers under the DCP. Messrs. Attwood, Calhoun, Pozen, Ranadivé and Teruel and Mses. Marinello and Zalaznick deferred cash fees in the amount of $230,000, $31,556, $95,000, $31,556, $80,000, $39,444 and $80,000, respectively, and were credited in respect of such fees 5,846, 780, 2,415, 780, 2,033, 975 and 2,033 DSUs, respectively. Pursuant to the SEC’s disclosure rules, these DSUs are reflected in the Stock Awards column. |
2018 PROXY STATEMENT 73 |
DIRECTOR COMPENSATION |
2 | In 2017, independent directors were entitled to annual equity grants in the form of DSUs with a fair market value of $160,000. The amount in this column reflects the aggregate grant date fair value of the award calculated in accordance with FASB ASC Topic 718. The awards reported in this column include (a) the annual DSU grants made to each independent director in May 2017 for services to be performed from May 2017 through April 2018 and (b) DSUs credited to the director’s deferred compensation account in 2017 for fees the director deferred under the DCP. In accordance with the SEC’s rules, dividend equivalents that accrued on the director’s DSUs are not reported above because dividends were factored into the grant date fair value of these awards. The equity awards in the form of DSUs are granted at fair market value on the grant date and vest over one year in four substantially equal quarterly installments. In the event of a director’s departure, he or she is entitled to receive a prorated portion of the next installment of his or her equity award. |
All DSUs, whether received in respect of deferred cash fees or in respect of the director’s annual equity award, represent an unfunded and unsecured right to receive one Nielsen share following the director’s termination of service with Nielsen. DSUs accrue dividend equivalents in the form of additional DSUs when dividends are paid on Nielsen shares and with the same vesting schedule as the DSUs to which these are attributed. Shares to be issued in respect of DSUs will be distributed 60 days following a director’s termination of service from the Board. A director’s right to a deferred amount of compensation may not be forfeited at any time. |
Effective January 1, 2014,
3 | Messrs. Calhoun and Ranadivé and Ms. Marinello did not stand for re-election at our 2017 annual general meeting of shareholders. |
4 | Mr. Kilts resigned from the Board, effective August 31, 2017. |
Each of Ms. Hoguet and Messrs. Pozen and Teruel had an aggregate of 12,500, 40,335 and 34,172 options to acquire our shares, respectively, outstanding on December 31, 2017. As of December 31, 2017, each of our non-executive directors who are independentMses. Hoguet and Zalaznick and Messrs. Attwood, De Luca, Manwani, Pozen, Rawlinson and Teruel had an aggregate of 31,085, 9,597, 40,828, 1,958, 10,408, 228,326, 3,913 and 27,437 DSUs, respectively, which include DSUs received in lieu of cash Board fees, DSUs awarded annually under applicable NYSE rules, other than the directors affiliated with any of the Sponsors (as defined on page 128), (the “Independent Directors”) receives an annual cash retainer of $80,000. Independent Directors who are chairpersons of the Audit Committee, the Compensation Committeeequity plan and the Nomination and Corporate Governance Committee receive additional annual compensation of $20,000, $15,000 and $15,000, respectively. Fees are paid quarterly unless deferred as described below. Annual equity grants were also made to the Independent Directorsdividend equivalents accrued in the form of Deferred Stock Units (“DSUs”) with a fair market value of $135,000. ADSUs (as described above). Of these DSU represents an unfundedamounts, 1,013, 1,013, 1,013, 589, 1,013, 1,013, 1,232 and unsecured right to receive one share of Nielsen common stock following the termination of the director’s services with Nielsen. The DSUs vest in four substantially equal quarterly installments. The Board of Directors previously adopted a deferred compensation plan for Independent Directors under which they may defer the receipt of their cash payments into DSUs. DSUs accrue dividend equivalents (in the form of additional DSUs).
Effective January 1, 2015, Directors affiliated with any of the Sponsors who are independent under applicable NYSE rules also receive the compensation discussed above, except for Mr. Attwood, who has declined to receive compensation to date. Also effective1,013, respectively, were not vested as of January 1, 2015, the Company’s lead independent director receives an additional annual feeDecember 31, 2017. Neither Messrs. Calhoun, Kilts or Ranadivé or Ms. Marinello held any unvested DSUs as of $30,000 payable in quarterly installments.December 31, 2017.
Share Ownership Guidelines
In June 2011, our Board of Directors adopted share ownership guidelines pursuant to which directors who receive fees for their servicesservice are required to maintain equity ownership in our Company equivalent to at least five times their annual cash fees. Shares beneficially owned by these directors, including vested and unvested DSUs and jointly-owned shares, are included in the calculation. These directorsDirectors are expected to meet thethese guidelines within five years from the later of the adoption of the guidelines, their appointment as a director or the commencement of the receipt of director fees. The
Effective February 16, 2017, the Compensation Committee resetapproved changes tore-set the share ownership guidelines for Ms. Hoguet and Messrs. Ranadivé and Teruel effective January 1, 2014all members of the Board on an annual basis to reflect the latest director fee schedule as described above. The guidelines were reset usingcurrent compensation and stock price levels. Using a share price of $45.89,$36.40, the price at close of market on December 31, 2013. The guidelines were not reset for Mr. Pozen since he had previously met them. Effective January 1, 2015,29, 2017, the Compensation Committee set the share ownership guidelines for Ms. Marinello (whose Board membership began on October 31, 2014) and Messrs. Navab and Kilts (who began receiving Board fees on January 1, 2015) using a share price of $44.73, the price at close on December 31, 2014. It also reset the guidelines for Mr. Teruel on that date to reflect his additional fees for 2015 as chairman of the Compensation Committee. No share ownership guidelines have been set for Mr. Attwood because he is currently not receiving director fees. The current guidelines and share ownership for this purpose as of MayMarch 1, 20152018 are set forth below.
Guideline Shares | Share Ownership | |||||
Ms. Hoguet | 11,000 | 16,609 | ||||
Mr. Kilts | 9,000 | 255 | ||||
Mr. Manwani | 9,000 | 210 | ||||
Ms. Marinello | 9,000 | 1,554 | ||||
Mr. Navab | 9,000 | 704 | ||||
Mr. Ranadivé | 9,000 | 12,508 | ||||
Mr. Pozen | 13,000 | 193,115 | ||||
Mr. Teruel | 11,000 | 14,995 |
Guideline Shares
| Share Ownership
| |||||||
Mr. Attwood
|
| 32,000
|
|
| 40,261
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| ||
Mr. De Luca1
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| 11,000
|
|
| 3,729
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| ||
Ms. Hoguet
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| 14,000
|
|
| 32,099
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| ||
Mr. Manwani2
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| 14,000
|
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| 11,421
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| ||
Mr. Pozen
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| 13,000
|
|
| 228,687
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| ||
Mr. Rawlinson3
|
| 11,000
|
|
| 4,927
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| ||
Mr. Teruel
|
| 11,000
|
|
| 27,901
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| ||
Ms. Zalaznick4
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| 11,000
|
|
| 10,061
|
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1. | Mr. De Luca has until 10/19/2022 to be in compliance with our stock ownership guidelines. |
2. | Mr. Manwani has until 1/22/2020 to be in compliance with our stock ownership guidelines. |
3. | Mr. Rawlinson has until 2/8/2022 to be in compliance with our stock ownership guidelines. |
4. | Ms. Zalaznick has until 4/28/2021 to be in compliance with our stock ownership guidelines. |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION FOR THE 2014 FISCAL YEAR
The 2014 compensation of non-employee directors who served on the Board in 2014 is displayed in the table below:
Name | Fees Earned or Paid ($) | Stock Awards 1 ($) | Total ($) | |||||||||
James A. Attwood Jr. 2 | — | — | — | |||||||||
David L. Calhoun2 3 | — | — | — | |||||||||
Karen M. Hoguet | — | 235,000 | 235,000 | |||||||||
James M. Kilts 2 | — | — | — | |||||||||
Kathryn Marinello 4 | — | 80,833 | 80,833 | |||||||||
Alexander Navab 2 | — | — | — | |||||||||
Robert C. Pozen | — | 230,000 | 230,000 | |||||||||
Vivek Ranadivé | — | 215,000 | 215,000 | |||||||||
Ganesh Rao 2 | — | — | — | |||||||||
Javier G. Teruel | — | 215,000 | 215,000 |
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Each of Ms. Hoguet and Messrs. Pozen, Ranadivé and Teruel has an aggregate of 31,120, 40,335, 4,941 and 34,172 options to acquire shares of our common stock, respectively, outstanding on December 31, 2014. Also on that date, each of Mses. Hoguet and Marinello and Messrs. Pozen, Ranadivé and Teruel have an aggregate of 11,979, 1,898, 11,850, 11,990 and 11,076 DSUs, respectively, which comprises DSUs received in lieu of cash board fees, DSUs awarded annually under the equity plan and dividend equivalents accrued in the form of DSUs (as described above). Of these DSU amounts, 1,455, 1,600 1,455, 1,455 and 1,455, respectively, were not vested as of December 31, 2014. Each of Mses. Hoguet and Marinello and Messrs. Pozen, Ranadivé and Teruel has, at December 31, 2014, an aggregate of 4,000, 0, 10,364, 0 and 3,855 shares of common stock, respectively, received in lieu of cash board fees or otherwise granted to them by the Company during their tenure as director. As of December 31, 2014, Mr. Calhoun holds 4,097,114 options to acquire shares of our common stock of which 1,334,375 were not vested as of that date and 138,522 shares of restricted stock which were not vested as of that date.
Transition Agreement
In connection with his departure as the Company’s Chief Executive Officer and his appointment as the Executive Chairman of the Company’s Board of Directors effective January 1, 2014, the Company entered into a Transition Agreement with Mr. Calhoun, dated as of November 5, 2013, reflecting Mr. Calhoun’s change in status.
Pursuant to the Transition Agreement, Mr. Calhoun has agreed to devote between 15% and 20% of his business time (determined on a quarterly basis) from January 1, 2014 through December 31, 2015 (or such earlier date as the Board decides to end his service) to provide guidance and advice to Mr. Barns with respect to all aspects of his duties and responsibilities as the new Chief Executive Officer of the Company (the “Additional Services”).
DIRECTOR COMPENSATION
Other than as set forth in the Transition Agreement (which provides for the continued right of Mr. Calhoun to earn certain compensation granted to him in his position as Chief Executive Officer, as described below), Mr. Calhoun has not received any compensation for serving as the Executive Chairman of the Board.
Mr. Calhoun received his annual bonus with respect to the 2013 fiscal year. 25% of the award was denominated in restricted shares which will vest equally on the first and second anniversaries of the date of grant based on his continued service as a non-employee member of the Board. If Mr. Calhoun ceases to serve as a non-employee member of the Board because he was not nominated to serve for an additional term or he is not elected to the Board, then all such restricted shares will vest on the date he ceases to serve as non-employee director of the Board.
Mr. Calhoun was paid his accrued benefit of $2,000,000 under his additional supplemental executive retirement plan on July 2, 2014 in a lump sum cash payment.
The LTPP performance shares granted to Mr. Calhoun on February 20, 2013 and stock options that remain outstanding and unvested as of January 1, 2014 will be eligible to vest for so long as Mr. Calhoun continues to serve as the Executive Chairman of the Board (which reflects an amendment to the terms of these stock awards pursuant to the Transition Agreement, as they would otherwise have continued to be eligible to vest so long as Mr. Calhoun served as non-employee member of the Board). The vesting of the performance shares is conditional on the Company’s achievement against the performance metrics established within the plan and on Mr. Calhoun’s provision of Additional Services. If the Board terminates the Additional Services prior to December 31, 2015 without Mr. Calhoun’s prior consent, and Mr. Calhoun is willing and able to perform the Additional Services at such time, then Mr. Calhoun shall be treated as having continued to perform the Additional Services through December 31, 2015 for the purposes of earning the performance shares.
In addition, in accordance with the terms of the Company’s 2010 Stock Incentive Plan, the post-termination exercise period for the stock options held by Mr. Calhoun that were granted under such plan will not commence until he ceases to serve as a non-employee member of the Board. In order to encourage Mr. Calhoun to continue to hold such options and to maintain his significant ownership stake in the Company, the stock options held by Mr. Calhoun that were granted under the Company’s 2006 Stock Acquisition and Option Plan were amended to provide that the post-termination exercise period for such options will not commence until he ceases to serve as a non-employee member of the Board.
Equity Compensation Plan Information
The following table sets forth information as of December 31, 2017, regarding the Company’s equity compensation plan information regarding options to acquireplans and shares of the Company’s common stock, restricted stock units, deferred stock units and performance restricted shares at December 31, 2014.underlying outstanding equity awards.
(a) | (b) | (c) | ||||||||||||||||||||||
Plan category | Number of securities to be issued upon exercise of outstanding options and rights | Weighted-average exercise price of outstanding options and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | Number of securities to be issued upon exercise of outstanding options and rights | Weighted-average exercise price of outstanding options and rights | Number of securities remaining issuance under equity compensation plans | ||||||||||||||||||
Plan category
| (a)
| (b)
| (c)
| |||||||||||||||||||||
Equity compensation plans approved by security holders 1 | 16,817,289 | 2 | $ | $28,75 | 11,146,516 |
| 8,929,013
| 2
|
| 41.58
|
|
| 8,321,289
|
| ||||||||||
Equity compensation plans not approved by security holders | 0 | 0 | 0 |
| 0
|
|
| 0
|
|
| 0
|
| ||||||||||||
Total | 16,817,289 | 2 | $ | $28,75 | 11,146,516 |
| 8,929,013
| 2
|
| 41.58
|
|
| 8,321,289
|
|
1 | These shares may be issued pursuant to the |
2 | Includes |
2018 PROXY STATEMENT 75 |
The following table sets forth certain information regarding beneficial ownership of Nielsen’s capital stockshares as of MayMarch 1, 20152018 (except as indicated in the footnotes) with respect to:
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|
|
|
Percentage computations are based on 368,593,992 shares356,273,560 of our common stockshares outstanding as of MayMarch 1, 2015.2018.
Shares of Common Stock Beneficially Owned | ||||||||||
Name of Beneficial Owner | Number | Percentage | ||||||||
Capital Research Global Investors1 | 38,922,940 | 10.6% | ||||||||
The Vanguard Group, Inc.2 | 23,264,714 | 6.3% | ||||||||
GIC Private Limited 3 | 18,788,010 | 5.1% | ||||||||
James A. Attwood, Jr. | — | — | ||||||||
Karen M. Hoguet 4 | 47,729 | * | ||||||||
James M. Kilts 5 | 255 | * | ||||||||
Harish Manwani 6 | 210 | * | ||||||||
Kathryn V. Marinello 7 | 1,554 | * | ||||||||
Alexander Navab8 | 704 | * | ||||||||
Robert Pozen 9 | 252,050 | * | ||||||||
Vivek Ranadivé 10 | 17,449 | * | ||||||||
Javier G. Teruel 11 | 49,167 | * | ||||||||
David L. Calhoun 12 | 4,180,026 | 1.1% | ||||||||
Mitch Barns 13 | 257,934 | * | ||||||||
Brian J. West14 | 493,057 | * | ||||||||
Jamere Jackson | 10,958 | * | ||||||||
Stephen Hasker 15 | 83,226 | * | ||||||||
John Lewis 16 | 171,213 | * | ||||||||
James W. Cuminale 17 | 261,468 | * | ||||||||
All Directors and Executive Officers as a group (19 persons) 18 | 6,211,080 | 1.7% |
Nielsen Shares Beneficially Owned
| ||||||||
Name of Beneficial Owner
| Number
| Percentage
| ||||||
Capital Research Global Investors1
|
| 41,156,419
|
|
| 11.6
| %
| ||
The Vanguard Group, Inc.2
|
| 35,974,778
|
|
| 10.1
| %
| ||
BlackRock, Inc.3
|
| 28,657,103
|
|
| 8.0
| %
| ||
James A. Attwood, Jr.4
|
| 40,828
|
|
| *
|
| ||
Guerrino De Luca5
|
| 1,958
|
|
| *
|
| ||
Karen M. Hoguet6
|
| 43,585
|
|
| *
|
| ||
Harish Manwani7
|
| 10,408
|
|
| *
|
| ||
Robert C. Pozen8
|
| 268,661
|
|
| *
|
| ||
David Rawlinson9
|
| 3,913
|
|
| *
|
| ||
Javier G. Teruel10
|
| 53,871
|
|
| *
|
| ||
Lauren Zalaznick11
|
| 9,597
|
|
| *
|
| ||
Mitch Barns12
|
| 593,194
|
|
| *
|
| ||
Jamere Jackson13
|
| 122,175
|
|
| *
|
| ||
Steve Hasker14
|
| 121,055
|
|
| *
|
| ||
Eric J. Dale15
|
| 38,101
|
|
| *
|
| ||
Nancy Phillips
|
| —
|
|
| *
|
| ||
All Directors and Executive Officers as a group (14 persons)16
|
| 1,242,640
|
|
| *
|
|
* | less than 1% |
1 | Based on the Schedule 13G filed by Capital Research Global Investors on February |
2 | Based on the Schedule 13G filed by The Vanguard Group, Inc. on February |
3 | Based on the Schedule 13G filed by BlackRock, Inc. on |
4 |
OWNERSHIP OF SECURITIES
Of the shares shown as beneficially owned, |
5 | Of the shares shown as beneficially owned, |
2018 PROXY STATEMENT 76 |
OWNERSHIP OF SECURITIES |
6 | Of the shares shown as beneficially owned, |
7 | Of the shares shown as beneficially owned, |
8 | Of the shares shown as beneficially owned, |
|
Of the shares shown as beneficially owned, |
Of the shares shown as beneficially owned, |
Of the shares shown as beneficially owned, |
|
|
|
|
|
|
12 | Of the shares shown as beneficially owned, 369,339 represent rights to acquire shares through the exercise of options. Includes amounts vested as of March 1, 2018 and amounts that vest within 60 days thereafter. |
13 | Of the shares shown as beneficially owned, 95,559 represent rights to acquire shares through the exercise of options. Includes amounts vested as of March 1, 2018 and amounts that vest within 60 days thereafter. |
14 | Mr. Hasker departed the Company as of December 31, 2017. Of the shares shown as beneficially owned, 50,771 represent rights to acquire shares upon the exercise of options. These options were cancelled effective March 31, 2018. |
15 | Of the shares shown as beneficially owned, 28,051 represent rights to acquire shares through the exercise of options. Includes amounts vested as of March 1, 2018 and amounts that vest within 60 days thereafter. |
16 | Of the shares shown as beneficially owned, 602,287 represent rights to acquire shares through the exercise of options. Includes amounts vested as of March 1, 2018 and amounts that vest within 60 days thereafter. As Mr. Hasker was not an executive officer at the time of the filing of this proxy statement, Nielsen shares he beneficially owned as of March 1, 2018 are not included in this line item. |
2018 PROXY STATEMENT 77 |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive officers, directors, persons who own more than 10% of a registered class of our equity securities and certain entities associated with the foregoing (the “Reporting Persons”) to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC. Reporting Persons are required by SEC rules to furnish us with copies of all Forms 3, 4 and 5, and amendments thereto, that they file with the SEC.
Based solely on our review of copies of such reports and written representations from the Reporting Persons, we believe that the Reporting Persons complied with all Section 16(a) filing requirements during 2014,2017, except that the Company filed one late Form 4 for one transaction(1) on behalf of Mr. Habib,Charlton we filed a Form 4 late in respect of a sale transaction, (2) on behalf of Mr. Rawlinson we filed a Form 4 late in respect of a grant of deferred stock units, and (3) on behalf of several officers and directors, we filed Forms 4 late in respect of a quarterly dividend accrual, the Company’s former Chief Operating Officer.
Certain Relationshipsamount of which was immaterial except as related to Messrs. Barns, Hasker, Jackson, Powell, Pozen, Ranadive, Teruel and Related Party TransactionsMs. Hoguet.
LETTER AGREEMENTS WITH SPONSORS
On August 14, 2013, Nielsen entered into separate letter agreements with affiliates of each of The Blackstone Group, The Carlyle Group, Kohlberg Kravis Roberts & Co. and Thomas H. Lee Partners, each of which provides such counterparty with the right to nominate one director to Nielsen’s Board of Directors directly, rather than through Valcon Acquisition Holding (Luxembourg) S.ar.l. (“Luxco”), if such counterparty holds, directly or indirectly, at least 3% of Nielsen’s voting power. On October 30, 2014, Thomas H. Lee Partners relinquished this right. As of April 28, 2015, each of The Blackstone Group, The Carlyle Group and Kohlberg Kravis Roberts & Co held less than 3% of Nielsen’s voting power. As a result, they no longer have the right to nominate directors to Nielsen’s Board of Directors.
REGISTRATION RIGHTS AGREEMENT
In connection with our initial public offering in January 2011, we entered into a registration rights agreement with each of AlpInvest Partners, The Blackstone Group, The Carlyle Group, Centerview Partners, Hellman & Friedman, Kohlberg Kravis Roberts & Co. and Thomas H. Lee Partners (collectively, the “Sponsors”) and Luxco. Pursuant to this registration rights agreement, the Sponsors collectively have the right to an unlimited number of demand registrations, which may be exercised by Luxco at any time and from time to time after the expiration of lock-up agreements. Pursuant to such demand registration rights, we are required to register the shares of common stock beneficially owned by them directly or through Luxco with the SEC for sale by them to the public, provided that any demand that will result in the imposition of a lock-up on us and the Sponsors may not be made unless the shares requested to be sold by the demanding shareholders in such offering have an aggregate market value of at least $100 million. In addition, in the event that we are registering additional shares of common stock for sale to the public, whether on our own behalf or on behalf of the Sponsors or other shareholders with registration rights, the Sponsors have piggyback registration rights providing them with the right to have us include the shares of common stock owned by them in any such registration. In each such event, the Company is required to pay the registration expenses.
SPONSOR-HELD DEBT
A portion of the borrowings under our senior secured credit facility have been purchased by certain of the Sponsors in market transactions not involving the Company. Based on information made available to the Company, amounts held by the Sponsors and their affiliates was $222 million as of December 31, 2014. Interest expense associated with amounts held by the Sponsors and their affiliates approximated $6 million during the year ended December 31, 2014. Of the $222 million of debt held by the Sponsors and their affiliates, Kohlberg Kravis Roberts & Co. and its affiliates held $64 million, The Blackstone Group and its affiliates held $140 million and The Carlyle Group and its affiliates held $19 million. The Sponsors, their subsidiaries, affiliates and controlling shareholders may, from time to time, depending on market conditions, seek to purchase debt securities issued by Nielsen or its subsidiaries or affiliates in open market or privately negotiated transactions or by other means. We make no undertaking to disclose any such transactions except as may be required by applicable laws and regulations.
EQUITY HEALTHCARE ARRANGEMENT
Effective January 1, 2009, we entered into an employer health program arrangement with Equity Healthcare LLC (“Equity Healthcare”). Equity Healthcare negotiates with providers of standard administrative services for health benefit plans and other related services for cost discounts, quality of service monitoring, data services and clinical consulting and oversight by Equity Healthcare. Because of the combined purchasing power of its client participants, Equity Healthcare is able to negotiate pricing terms from providers that are believed to be more favorable than the companies could obtain for themselves on an individual basis. Equity Healthcare is an affiliate of The Blackstone Group with whom Mr. Calhoun, the Executive Chairman of the Board of Directors of the Company, is affiliated and in which he may have an indirect interest.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In consideration for Equity Healthcare’s provision of access to these favorable arrangements and its monitoring of the contracted third parties’ delivery of contracted services to us, we have paid Equity Healthcare a fee per participating employee per month (“PEPM”). As of December 31, 2014, we had approximately 8,170 employees enrolled in our self-insured health benefit plans in the United States. Equity Healthcare may also receive a fee from one or more of the health plans with whom Equity Healthcare has contractual arrangements if the total number of employees joining such health plans from participating companies exceeds specified thresholds. The PEPM fee for 2014 was $2.70.
COMMERCIAL RELATIONSHIP WITH TIBCO
Mr. Ranadivé, who has served on Nielsen’s Board of Directors since July 26, 2012, was the Chief Executive Officer and Chairman of the Board of Directors of TIBCO and owned shares of TIBCO’s capital stock. Effective December 5, 2014, TIBCO was acquired, Mr. Ranadivé sold all of his shares in TIBCO and stepped down as Chief Executive Officer and Chairman. He remains a board member of TIBCO and will assist it with strategic projects.
During the year ended December 31, 2014, the Company paid approximately $9.8 million to TIBCO. Of that amount, $2.0 million was for the purchase of software licenses and $7.8 million was for the purchase of related IT tech support services and training.
The disinterested members of the Board of Directors and our Audit Committee have approved our transactions with TIBCO from the date Mr. Ranadivé began serving on our Board of Directors in accordance with our Related Person Transaction Policy described below. Our Audit Committee has preapproved the purchases of products and services from TIBCO in the amount of $11 million in any calendar year or, if less, the limits imposed by the NYSE listing rules relating to director independence.
In 2013, the Audit Committee also approved a revenue-sharing agreement between TIBCO and Nielsen under which TIBCO paid to Nielsen a one-time license fee for certain Nielsen data. In the event TIBCO sells Nielsen data to its customers, Nielsen receives 40% of such revenue. This agreement, effective December 20, 2013, will remain in effect for three years, but it will renew for an additional two years if Nielsen’s share of the revenue during the initial term exceeds $400,000. Nielsen may elect to terminate the agreement at the end of the initial term if Nielsen establishes that it has lost or will lose an agreed-upon revenue amount from clients that have terminated their license with Nielsen for Nielsen’s data and elected instead to license the data from TIBCO. No revenue was realized by Nielsen from this revenue-sharing agreement through December 31, 2014.
INVESTMENT IN THE PEREG FUND
On December 3, 2012, we entered into certain agreements (the “Agreements”) with Pereg Venture Fund I, LP (“Pereg Fund”), an investment vehicle focused on investments primarily in marketing, media and advertising related to early stage technology innovations. Itzhak Fisher, who served as our Executive Vice President until September 30, 2014, serves as the Chairman of both Pereg Ventures LLC, the investment manager of Pereg Fund (the “Investment Manager”), and Pereg Ventures GP LP, the general partner of Pereg Fund (the “General Partner”). As of December 31, 2014, Mr. Fisher owned approximately 89% of each of the Investment Manager and the General Partner. Additionally, Mr. Fisher is an investor in Pereg Fund.
Pursuant to the Agreements, we became a limited partner of Pereg Fund and committed to make an investment in Pereg Fund in the amount of the lesser of (a) 19.9% of total commitments in Pereg Fund; and (b) $10,000,000. On June 19, 2014, we entered into amendments to the Agreements, pursuant to which we committed to make an investment in Pereg Fund in the amount of the lesser of (a) 45% of the capital contributions of all partners in Pereg Fund; and (b) $10,000,000. We are not obligated to fund our investment until such time as Pereg Fund has accepted subscriptions for commitments of $25,000,000 or more (inclusive of our commitment). As of April 17, 2015, we have funded approximately $1.3 million of our investment in Pereg Fund.
The Agreements provide us with the following rights (among others): (a) Pereg Fund will apply the most favorable terms that it offers to any investor to our investment; (b) the General Partner will not accept commitments from, nor allow transfers to, any person identified by us as our competitor without our prior written consent; (c) the General Partner and Pereg Fund will give us a right of first refusal to pursue any investment in a portfolio company considered by Pereg Fund which operates in a business in which we currently operate or desire to operate (a “Nielsen Business”); and (d) we will have the opportunity to
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
make an offer to acquire Pereg Fund’s interest in a portfolio company which Pereg Fund seeks to dispose of and which is engaged in a Nielsen Business. Notwithstanding the foregoing rights, we have no role in the management of Pereg Fund nor in the selection of or the decision by Pereg Fund to invest in or dispose of any of Pereg Fund’s investments. Additionally, we have no oversight authority with respect to Pereg Fund, nor will we be a sponsor or manager of Pereg Fund.
The Investment Manager will charge Pereg Fund a management fee of 2% per year of each investor’s committed capital in Pereg Fund. Additionally, the General Partner will receive 20% of the profits which are distributable from Pereg Fund (payable after Pereg Fund has returned invested capital to investors) (the “Carried Interest”). Under certain circumstances, Mr. Fisher may receive a portion of the management fee, but he did not receive any form of compensation from Pereg Fund, the General Partner or the Investment Manager in the year ended December 31, 2014. He is expected to receive his share of the Carried Interest and any amounts payable to him as a result of his investment in Pereg Fund.
On July 26, 2012 and May 1, 2014, our Board of Directors (composed entirely of disinterested members) approved our investment in Pereg Fund pursuant to the Agreements and their amendments.
REVIEW, APPROVAL OR RATIFICATION OF CERTAIN TRANSACTIONS WITH RELATED PERSONS
We have adopted a written Related Person Transaction Policy which requires that all Related Person Transactions (defined as all transactions that would be required to be disclosed pursuant to Item 404(a) of RegulationS-K in which the Company was or is to be a participant and the amount involved exceeds $120,000 and in which any Related Person (defined as any person described in paragraph (a) of Item 404 of RegulationS-K) will have a direct or indirect material interest) be approved or ratified by a committee of the Board composed solely of independent directors who are disinterested or by the disinterested members of the Board. We have complied with the Policy since its adoption.
2018 PROXY STATEMENT 78 |
Shareholder Proposals for the 2016 Annual Meeting of Shareholders
If any shareholder wishes to propose a matter for consideration at our 2016 Annual Meeting2019 annual general meeting of Shareholders,shareholders under the SEC’s shareholder proposal rule (Rule14a-8(e) of the Exchange Act), the proposal should be mailed by certified mail return receipt requested, to the CorporateCompany Secretary, Nielsen N.V.,Holdings plc, 40 Danbury Road, Wilton, Connecticut 06897. To be eligible under the SEC’s shareholder proposal rule (Rule 14a-8(e) of the Exchange Act) for inclusion in our 2016 Annual Meeting Proxy Statement2019 annual general meeting proxy statement and form of proxy, athe proposal must be received by the CorporateCompany Secretary on or before February 5, 2016.December 10, 2018.
For a shareholder to requestShareholder(s) meeting the Board to place a matter on the agendarequirements of the UK Companies Act 2006 and our articles of association are able to propose a resolution to be considered at the 2019 annual general meeting of shareholders. In order to do so, the qualifying shareholder(s) must adhere to certain procedural requirements set out in the UK Companies Act 2006 and our articles of association, including notifying us in writing of such proposed resolution at least six weeks prior to the 2019 annual general meeting of shareholders including director nominations,or, if later, the time the notice of the 2019 annual general meeting of shareholders who qualify to do so under applicable lawis given. Such written notification must have given timely notice thereofidentify the proposed resolution and must be authorized by the person(s) making it. The notification may be delivered in writinghard copy form to the Corporate Secretary and such request must be accompanied by reasons. To be timely, a shareholder’s notice complying with the requirements set forth in our articles of association and Advance Notice Policy must be delivered to the CorporateCompany Secretary at 40 Danbury Road, Wilton, Connecticut 06897 or in hard copy or electronically to our Company Secretary at least 60 days priorcompanysecretary@nielsen.com. We may decide to include such proposed resolution in the date of the relevant general meeting of shareholders. Our Advance Notice Policy has other requirements that must be followed in connection with submitting requests to place matters on the agenda. The Boardproxy statement or circulate it separately. In addition, we may decide not to place any such proposal oncirculate a resolution proposed by shareholder(s) at the agenda of a shareholders’ meeting if the request by the relevant shareholders is, in the given circumstances, unacceptable pursuant to the standards of reasonableness and fairness (which may include circumstances where the Board, acting reasonably, is of the opinion that putting such item on the agenda would be detrimental to a vital interestineffective (whether by reason of the Company).inconsistency with any enactment or our articles of association) or is otherwise defamatory, frivolous or vexatious.
Householding of Proxy Materials
SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and notices with respect to two or more shareholders sharing the same address by delivering a single proxy statement or a single notice addressed to those shareholders. This process, which is commonly referred to as “householding,” provides cost savings for companies. Some brokers household proxy materials, delivering a single proxy statement or notice to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, or if your household is receiving multiple copies of these documents and you wish to request that future deliveries be limited to a single copy, please notify your broker. You can also request, prompt delivery ofand the Company will promptly deliver, a separate copy of the Proxy Materialsnotice or the proxy materials by contacting the CorporateCompany Secretary Nielsen N.V., 40 Danbury Road, Wilton, Connecticut 06897, at companysecretary@nielsen.com or by calling(203) 563-3500.
Available atwww.proxyvote.com (use the16-digit control number included on your Notice or proxy card) and atwww.nielsen.com/investors.
2018 PROXY STATEMENT 79 |
Where You Can Find More Information
Nielsen-Netherlands is subject to the informational requirements of the U.S. Securities Exchange Act of 1934 and in accordance therewith files annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Nielsen-Netherlands’s SEC filings also are available to the public from commercial document retrieval services and at the World Wide Web site maintained by the SEC at http://www.sec.gov. You may also inspect those reports, proxy statements and other information concerning Nielsen-Netherlands at the NYSE offices, 20 Broad Street, New York, New York 10005.
Nielsen-Netherlands’s web site is located at http://www.nielsen.com . Nielsen-Netherlands’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the SEC are available, free of charge, through its web site, as soon as reasonably practicable after those reports or filings are electronically filed with or furnished to the SEC. Information on Nielsen-Netherlands’s web site or any other web site is not incorporated by reference in this proxy statement/prospectus and does not constitute a part of this proxy statement/prospectus.
Nielsen-UK has filed a Registration Statement on Form S-4 with the SEC to register its Nielsen-UK Ordinary Shares in connection with the Merger. This proxy statement/prospectus is a part of that registration statement and constitutes a prospectus of Nielsen-UK under applicable U.S. securities laws in addition to being the proxy statement of Nielsen-Netherlands for the annual meeting. This proxy statement/prospectus is not intended to be and is not a prospectus for purposes of the E.U. Prospectus Directive and/or the UK Financial Conduct Authority’s Prospectus Rules.
The SEC allows Nielsen-Netherlands and Nielsen-UK to “incorporate by reference” information into this proxy statement/prospectus, which means that Nielsen-Netherlands can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this proxy statement/prospectus, except for any information superseded by information in this proxy statement/prospectus. Except to the extent that therein information is deemed furnished and not filed pursuant to securities laws and regulations, this proxy statement/prospectus incorporates by reference the documents set forth below that Nielsen-Netherlands previously filed with the SEC. These documents contain important information about Nielsen-Netherlands. Information that Nielsen-Netherlands files later with the SEC will automatically update and supersede this information.
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We are also incorporating by reference all additional documents that we file with the SEC under Sections 13(a), 13 (c), 14 or 15(d) of the U.S. Exchange Act (excluding any information “furnished” but not “filed”) following the date of this document, but prior to the date of the meeting of shareholders.
Documents incorporated by reference in this proxy statement/prospectus, including copies offiled our Annual Report on FormForm 10-K for the year ended December 31, 2014, as well as2017 with the SEC on February 8, 2018. All of our filings that are made electronically with the SEC, including Forms10-K,10-Q and8-K, are available free of charge on our website,www.nielsen.com/investors under SEC Filings.Copies of our Annual Report on Form10-K for the year ended December 31, 2017, including financial statements and schedules thereto, filed with the SEC, are also available without charge to shareholders upon written request addressed to:
Harris BlackCompanysecretary@nielsen.com or
CorporateCompany Secretary
40 Danbury Road,
Wilton, Connecticut 06897
In order to ensure timely delivery of these documents, you should make such request no later than five days prior to the date of the annual meeting.
You should rely only on the information contained in or incorporated by reference in this proxy statement/prospectus. We have not authorized anyone else to provide you with different information. The information contained or incorporated by reference in this proxy statement/prospectus is accurate only as of the date thereof (unless the information specifically indicates that another date applies), or in the case of information incorporated by reference, only as of the date of such information, regardless of the time of delivery of this proxy statement/prospectus. Our business, financial condition, results of operations and prospects may have changed since such dates.
Therefore, you should not rely upon any information that differs from or is in addition to the information contained in this proxy statement/prospectus or in the documents incorporated by reference.
The Board of Directors does not know of any other matters to be brought before the meeting. If other matters are presented, the proxy holders have discretionary authority to vote all proxies in accordance with their best judgment.
By Order of the Board of Directors,
Emily Epstein
Company Secretary
2018 PROXY STATEMENT 80 |
The following questions and answers are intended to address briefly some commonly asked questions regarding our Annual Meeting. They may not address all questions that may be important to you. Please refer to the more detailed information contained elsewhere in this proxy statement, its annexes and the documents referred to in this proxy statement for more information.
Q: | WHY AM I BEING PROVIDED WITH THESE PROXY MATERIALS? |
A: | We are providing these proxy materials to you in connection with the solicitation by the Board of proxies to be voted at our Annual Meeting, and at any postponements or adjournments of the Annual Meeting. A Notice of Annual General Meeting of Shareholders required under the UK Companies Act 2006 is also included in this proxy statement. We have either (1) delivered to you a Notice and made these proxy materials available to you on the Internet or (2) delivered printed versions of these materials, including a proxy card, to you by mail. We encourage you to read the proxy statement carefully. |
Q: | WHY DID I RECEIVE AONE-PAGE NOTICE IN THE MAIL REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS INSTEAD OF A FULL SET OF PROXY MATERIALS? |
A: | Pursuant to SEC rules, we have elected to provide shareholders access to our proxy materials over the Internet. We believe that thise-proxy process will expedite our shareholders’ receipt of proxy materials, lower the costs, and reduce the environmental impact of our Annual Meeting. Accordingly, we sent a Notice on or about April 9, 2018 to shareholders of record entitled to vote at the Annual Meeting. All shareholders will have the ability to access the proxy materials on a website referred to in the Notice and to download printable versions of the proxy materials or to request and receive a printed set of the proxy materials from us. Instructions on how to access the proxy materials over the Internet or to request a printed copy from us may be found in the Notice. We encourage you to read the proxy statement carefully. |
Q: | WHAT WILL I NEED IN ORDER TO ATTEND THE ANNUAL MEETING? |
A: | We will be hosting the Annual Meeting live via the Internet and in person. Any shareholder who owns shares as of the Record Date can attend the Annual Meeting live via the Internet atnielsen.onlineshareholdermeeting.com or in person at 50 Danbury Road, Wilton, CT 06897. The Annual Meeting will start at 9:00 a.m. (Eastern Time) on May 22, 2018. |
TO ATTEND ONLINE: |
You will need your 16-digit control number included on your Notice or proxy card. Instructions on how to attend and participate via the Internet are posted atwww.proxyvote.com (before the meeting) andnielsen.onlineshareholdermeeting.com (during the meeting). |
TO ATTEND IN PERSON: |
You must have a government-issued photo identification along with either your admission ticket (which is included in your Notice or proxy card) or proof of ownership of Nielsen shares as of the Record Date. Proof of ownership may be any of the following: |
For directions to attend the Annual Meeting in person, go to:http://ir.nielsen.com/investor-relations/shareholder-information/annual-meeting/default.aspx or contact our Company Secretary at companysecretary@nielsen.com. |
2018 PROXY STATEMENT 81 |
GENERAL INFORMATION AND FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING |
We will be unable to admit anyone who does not present valid identification or refuses to comply with our security procedures. Cameras, videotaping equipment and other recording devices and large packages, banners, placards and signs will not be permitted at the Annual Meeting. |
Q: | WHAT AM I VOTING ON? |
A: | You are being asked to vote on the following proposals scheduled to be voted on at the Annual Meeting: |
![]() | To elect orre-elect the directors of the Board as listed herein; |
![]() | To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2018; |
![]() | To reappoint Ernst & Young LLP as the Company’s UK statutory auditor to audit the Company’s UK statutory annual accounts for the year ending December 31, 2018 and to hold office from the completion of this Annual Meeting until the completion of the next annual general meeting of the shareholders at which the UK statutory accounts are presented; |
![]() | To authorize the Audit Committee to determine the compensation of Ernst & Young LLP in its capacity as the Company’s UK statutory auditor; |
![]() | To approve on anon-binding, advisory basis the compensation of the Company’s named executive officers as disclosed in the proxy statement pursuant to the SEC rules; |
![]() | To approve on anon-binding, advisory basis the Directors’ Compensation Report for the year ended December 31, 2017, which is set out in the UK Annual Report and Accounts of the Company and this proxy statement; and |
![]() | To approve the Directors’ Compensation Policy, which is set out in the Directors’ Compensation Report in the UK Annual Report and Accounts of the Company for the year ended December 31, 2017 and this proxy statement. |
Shareholders may also be asked to consider such other business as may properly come before the Annual Meeting or any adjournments or postponement thereof.
Q: | WHO IS ENTITLED TO VOTE? |
A: | Holders of shares in the Company as of the close of business on March 23, 2018, the Record Date, may vote at the Annual Meeting. |
Q: | WHAT CONSTITUTES A QUORUM? |
A: | Generally, two shareholders present at the meeting and entitled to vote are a quorum. |
Q: | HOW MANY VOTES DO I HAVE? |
A: | You are entitled to one vote at our Annual Meeting for each share held by you at the close of business on March 23, 2018. As of March 23, 2018, the Company had 356,319,072 shares outstanding. |
Q: | HOW MANY VOTES ARE REQUIRED TO APPROVE EACH PROPOSAL? |
A: | Each proposal scheduled to be voted on at the Annual Meeting will be proposed as an ordinary resolution and requires the affirmative vote of a simple majority of the votes cast at the Annual Meeting in person or by proxy. It is important to note that votes on Proposal nos. 2, 5 and 6 arenon-binding and advisory. Therefore, the |
2018 PROXY STATEMENT 82 |
GENERAL INFORMATION AND FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING |
Company and/or the Board may determine to act in a manner inconsistent with the outcomes of such votes. However, the Board values the opinions of the Company’s shareholders as expressed through their advisory votes and, accordingly, the Board intends to review and consider the voting results on such resolutions. |
Q: | HOW DOES THE BOARD OF DIRECTORS RECOMMEND THAT I VOTE? |
A: | Our Board recommends that you vote “For” Proposal Nos. 1 through 7. |
Q: | HOW DO I VOTE MY SHARES WITHOUT ATTENDING THE ANNUAL MEETING? |
A: | If you are a shareholder of record on March 23, 2018, you may vote by granting a proxy: |
• | By Internet: You may submit your proxy by going towww.proxyvote.com (before the meeting) or atnielsen.onlineshareholdermeeting.com (during the meeting) and by following the instructions on how to complete an electronic proxy card. You will need the16-digit control number included in your Notice or proxy card in order to vote by Internet. |
• | By Telephone: You may submit your proxy by dialing1-800-690-6903 and by following the recorded instructions. You will need the16-digit control number included in your Notice or proxy card in order to vote by telephone. |
• | By Mail: You may submit your proxy by completing, signing and dating your proxy card (if you received one) where indicated and sending it back in the envelope provided. You should sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity (for example, as guardian, executor, trustee, custodian, attorney or officer of a corporation), indicate your name and title or capacity. |
For shares held in “street name,” you may vote by submitting voting instructions to your bank, broker or nominee.
Internet and telephone voting facilities will close at 11:59 p.m. (Eastern Time) on May 21, 2018 for the voting of shares held by shareholders of record or held in “street name” and 11:59 p.m. (Eastern Time) on May 17, 2018 for the voting of shares held through Nielsen’s 401(k) plan.
Mailed proxy cards with respect to shares held by shareholders of record or in “street name” must be received no later than 9:00 a.m. (Eastern Time) May 18, 2018. Mailed proxy cards with respect to shares held through Nielsen’s 401(k) plan must be received no later than 11:59 p.m. (Eastern Time) May 17, 2018.
Q: | MAY I VOTE AT THE ANNUAL MEETING RATHER THAN BY PROXY? |
A: | Although we encourage you to vote through the Internet or the telephone or to complete and return a proxy card (if you received one) by mail prior to the Annual Meeting to ensure that your vote is counted, you can attend the Annual Meeting online or in person and vote your shares during the meeting, unless you hold your shares through Nielsen’s 401(k) plan, which cannot be voted at the Annual Meeting. |
If you plan to vote in person, bring your printed proxy card if you received one by mail. Otherwise, the Company will give shareholders of record a ballot at the Annual Meeting. If you are a beneficial owner, you must obtain a legal proxy from the organization that holds your shares if you wish to attend the Annual Meeting and vote in person.
2018 PROXY STATEMENT 83 |
GENERAL INFORMATION AND FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING |
Q: | WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE NOTICE OR MORE THAN ONE SET OF PROXY MATERIALS ON OR ABOUT THE SAME TIME? |
A: | It generally means you hold shares registered in more than one account. To ensure that all your shares are voted, please sign and return each proxy card (if you received one) or, if you vote by Internet or telephone, vote once for each Notice or proxy card you receive. |
Q: | MAY I CHANGE MY VOTE OR REVOKE MY PROXY? |
A: | Yes. Whether you have voted by Internet, telephone or mail, if you are a shareholder of record, you may change your vote and revoke your proxy by: |
If you hold shares through the Nielsen 401(k) plan, you may change your vote and revoke your proxy by any of the first three methods listed above if you do so no later than 11:59 p.m. (Eastern Time) on May 17, 2018. You cannot, however, revoke or change your proxy with respect to shares held through the Nielsen 401(k) plan after that date, and you cannot vote those shares at the Annual Meeting.
If you hold shares in “street name,” you may submit new voting instructions by contacting your bank, broker or other nominee. You may also change your vote or revoke your proxy by attending the Annual Meeting online or in person.
We will honor the proxy with the latest date. However, no revocation will be effective unless we receive notice of such revocation at or prior to the deadlines mentioned above. For those shareholders who submit a proxy electronically or by telephone, the date on which the proxy is submitted in accordance with the instructions listed on the Notice or the proxy card is the date of the proxy.
Q: | HOW ARE VOTES COUNTED? |
A: | Abstentions: Votes may be cast in favor of or against or you may abstain from voting. If you intend to abstain from voting for any director nominee or any other proposal, you will need to check the abstention box for such director nominee or proposal, in which case your vote will not have any effect on the outcome of the election of such director nominee or on the outcome of such proposal. |
BrokerNon-Votes: Brokernon-votes occur when shares held by a bank, broker or other nominee are not voted with respect to a proposal because (1) the bank, broker or other nominee has not received voting instructions from the shareholder who beneficially owns the shares and (2) the bank, broker or other nominee lacks the authority to vote the shares at its/his/her discretion. Proposals Nos. 1, 5, 6 and 7 are considered to benon-routine matters under NYSE rules. Accordingly, any bank, broker or other nominee holding your shares will not be permitted to vote on those proposals at the meeting without receiving voting instructions from you.
If you sign and submit your proxy card (if you received one) without giving specific voting instructions, this will be construed as an instruction to vote the shares as recommended by the Board, so your shares will be voted “FOR” each director nominee listed herein (Proposal No. 1), “FOR” Proposal Nos. 2 through 7, and in accordance with the discretion of the holders of the proxy with respect to any other matters that may be voted on.
Abstentions and brokernon-votes will not affect the voting results.
2018 PROXY STATEMENT 84 |
GENERAL INFORMATION AND FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING |
Q: | WHO WILL COUNT THE VOTES? |
A: | Representatives of Broadridge Financial Solutions, Inc. will tabulate the votes and act as inspectors of election. |
Q: | COULD OTHER MATTERS BE DECIDED AT THE ANNUAL MEETING? |
A: | At the date this proxy statement went to press, we did not know of any matters to be raised at the Annual Meeting other than those referred to in this proxy statement. |
If other matters are properly presented to be considered and voted on at the Annual Meeting for consideration and if you are a shareholder of record and have submitted a proxy card (if you received one), the persons named in your proxy card will have the discretion to vote on those matters for you.
Q: | WHO IS SOLICITING MY PROXY? |
A: | Proxies are being solicited by and on behalf of our Board. Proxies may be solicited by directors, officers or employees (for no additional compensation) in person or by telephone, internet and facsimile transmission. In addition, we have hired Morrow Sodali LLC to assist in soliciting proxies. |
Q: | WHO WILL PAY FOR THE COST OF THIS PROXY SOLICITATION? |
A: | We will pay the cost of soliciting proxies. We expect to pay approximately $10,000 plus reasonableout-of-pocket expenses for Morrow Sodali LLC to assist in soliciting proxies. |
ExpertsCOMPANY INFORMATION AND MAILING ADDRESS
Nielsen Holdings plc is a public limited company incorporated under the laws of England and Wales.
Our shares trade in U.S. dollars on the NYSE under the symbol “NLSN.” Our principal executive offices in the United States are located at 85 Broad Street, New York, NY 10004. Our telephone number is 1(646) 654-5000. Our website address iswww.nielsen.com. Information on our website is not incorporated into this proxy statement.
Ernst & Young LLP, independent registered public accounting firm, has auditedIMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 22, 2018
This proxy statement, our consolidated financial statements and schedules included in our Annual Report on Form 10-Kannual report for the year ended December 31, 2014,2017 (including the Annual Report onForm 10-K for the year ended December 31, 2017), our UK Annual Report and Accounts for the year ended December 31, 2017, which consists of the UK statutory accounts, the UK statutory directors’ report, the UK statutory directors’ compensation report, the UK statutory strategic report and the effectivenessUK statutory auditor’s report and related information prepared in connection with the Annual Meeting are available atwww.proxyvote.com andwww.nielsen.com/investors. You will need the16-digit control number included on your Notice or proxy card in order to access the proxy materials onwww.proxyvote.com. In addition, if you have not received a copy of our internalproxy materials and would like one, you may download an electronic copy of our proxy materials or request a paper copy atwww.proxyvote.com, or by telephone at1-800-579-1639 or by email tosendmaterial@proxyvote.com. If requesting materials by email, please send a blank email with the16-digit control over financial reporting asnumber included on your Notice. You will also have the opportunity to request paper or email copies of our proxy materials for all future shareholder meetings.
2018 PROXY STATEMENT 85 |
This report sets out the relevant disclosures in relation to directors’ remuneration for the year ended December 31, 2014, as set forth2017. The report has been prepared in their reports,accordance with the requirements of the U.K. Large and Medium sized Companies and Groups (Accounts & Reports) (Amendment) Regulations 2013 (the “Regulations”) which are incorporatedapply to the Company. The relevant sections of the report have been audited by reference in this prospectus/proxy statement and elsewhere in the registration statement. Our financial statements and schedules are incorporated by reference in reliance on Ernst & Young LLP’s reports, givenLLP.
For avoidance of doubt please note that in the U.S. the term “compensation” is used instead of “remuneration”.
The Annual Report on their authority as experts in accountingDirectors’ Compensation is divided into the following sections:
STATEMENT FROM THE COMPENSATION COMMITTEE CHAIRPERSON
Compensation Philosophy
Executive Directors
Nielsen’s executive compensation program which applies to our Executive Director, Mitch Barns as Chief Executive Officer (“CEO”), is designed to incent and reward the executive team to deliver sustained financial performance and long-term value to shareholders. The primary objectives of Nielsen’s executive compensation program are to:
Legal MattersNon-Executive Directors
Our compensation program forNon-Executive Directors is designed to attract and retain Directors who possess the requisite knowledge, skills, and experience to support and oversee the Company. Our policy is to deliver a substantial portion of Directors’ compensation in the form of Deferred Stock Units (“DSUs”) in order to align rewards to Nielsen’s long-term performance and create shareholder value. A DSU represents an unfunded and unsecured right to receive one Nielsen share following the termination of the Director’s services. Each Director is required to acquire and maintain a threshold level of share ownership. Our share ownership guidelines for Directors are described in more detail onpageA-9 of this report.
2017 Compensation Program Changes and Highlights
Executive Director Program
Our Directors’ Compensation Policy applies to our Executive Director, as CEO.
2018 PROXY STATEMENT A-1 |
Clifford Chance, LLP, London, England, will pass upon certain UK legal matters
DIRECTORS’ COMPENSATION REPORT |
In 2017, our shareholders continued to show confidence in Nielsen’s executive compensation program with respect to the Merger, including legal matters with respect to the validityapproximately 98% of the Ordinary Sharesvotes cast at our shareholder meeting affirming our executive compensation program on an advisory basis. In addition, 98% approved our Directors’ Compensation Policy on a binding basis when it was last approved in 2016. In 2017, we continued a robust outreach program to be issued pursuantour shareholders to discuss topics including Company performance, our executive compensation program, and how we disclose information in our proxy statement. Each meeting, which was led by the Merger. Simpson Thacher & Bartlett LLP, New York, New York, will pass upon certain U.S. federal income tax consequencesChairperson of the Merger. Clifford Chance, LLP, Amsterdam,Board, resulted in valuable feedback that we used to strengthen the Netherlands, will pass upon certain Dutch tax consequencesdisclosure of our compensation programs. We continue to strive to keep our programs simple and focused on meaningful performance metrics.
The Compensation Committee took actions consistent with the Merger.Company’s philosophy and commitment to align with shareholder value, promote meritocracy and ensure good corporate governance. Notable highlights and/or changes made by the Committee are set out in the following table.
Annual Incentive Plan | In 2017, the Compensation Committee, aligned with future strategic priorities, made the decision to add revenue growth as a performance metric for the 2018 annual incentive plan. In 2018, 75% of the total fund payout will be based on Adjusted EBITDA performance against target and 25% will be based on revenue performance against target. The Committee also determined to remove the provision allowing for discretion to reduce the bonus fund by up to 30% if free cash flow falls short of objectives. However, free cash flow remains a key financial performance metric in the long term performance plan (as shown under “How Pay Decisions Are Made – Long-term Incentives (LTI).” These changes took effect on January 1, 2018. | |||
Performance Restricted Stock Unit Awards (“PRSUs”) in the Long-Term Performance Plan (“LTPP”) | Given future strategic priorities of the Company, in 2017 the Committee made the decision to add3-year revenue compounded annual growth rate (“CAGR”) as a performance metric for 2018 PRSU awards. For the 2018 PRSU awards, 50% of the payout will be based on free cash flow performance against target, 25% will be based on relative total shareholder return and 25% on3-year revenue CAGR. Following a review of compensation strategy in July, the Committee decided to increase the proportion of LTI value subject to performance vesting criteria from 50% to 60%, effective from the grant of Performance-based Restricted Stock Units (“PRSUs”) in February, 2018 and to denominate the remaining proportion in Restricted Stock Units (“RSUs”), which were effective from the grant of time-based equity in November, 2017. Since 2013 our practice had been to split the time-based equity evenly between stock options and RSUs. The Committee made this change to align with market practice in the digital marketplace in which we compete for top talent and in recognition of our belief that RSUs incent executives to improve performance via share price appreciation as well as provide a powerful retention effect. | |||
Severance Policy | In July 2017, the Compensation Committee approved a U.S. severance plan applicable to all Section 16 officers and other senior executives which applies to the Company’s CEO, CFO and other named executive officers. In relation to the CEO, this change was approved subject to shareholder approval and will not take effect until shareholder approval has been obtained. The terms of this plan, described in further detail under “Potential Payments Upon Termination or Change in Control”, supersede the terms of prior severance arrangements provided through our 2006 Stock Acquisition and Option Plan for Key Employees for Mr. Barns, or through the terms stated in offer letters for Messrs. Jackson and Dale and Ms. Phillips. Mr. Hasker’s termination was voluntary and so was not affected by this change. This change was undertaken in order to formalize a policy to replace legacy individual agreements or offer letters and also to incent retention in a competitive marketplace. The new severance plan increases the payout to Mr. Barns as our CEO from one year base salary to two times the sum of the annual base salary and the average of the prior three annual bonus payouts. | |||
LTPP peer group | The LTPP Peer Group is used to benchmark our relative Total Shareholder Return performance for PRSU awards. Based on its annual review, the Compensation Committee made significant changes to the peer group for 2017. Seven media and consumer product companies were removed from the peer group as it was determined that their business characteristics and economic drivers were not similar to the Company’s. The companies were Coca-Cola Company, Colgate-Palmolive Company, The Procter & Gamble Company, Time Warner Inc., Twenty-First Century Fox, Inc., Unilever N.V., and Viacom, Inc. Three companies were added to the peer group - Gartner Inc., Publicis Groupe, and Verisk Analytics Inc. These companies operate in similar businesses to, or serve similar clients to, the Company and are influenced by similar macroeconomic factors. The full peer group is disclosed in our 2017 Proxy Statement under “How Pay Decisions are Made – Performance Restricted Stock Units Awarded Under the Long-Term Performance Plan (“LTPP”). |
| 2018 PROXY STATEMENT A-2 |
MERGER PROPOSAL
COMMON DRAFT TERMS OF THE CROSS-BORDER LEGAL MERGER
(“Merger Proposal”)
of
NIELSEN N.V.
and
NIELSEN HOLDINGS LIMITED
26 MARCH 2015
DIRECTORS’ COMPENSATION REPORT |
ANNEX AWe believe that the individual components and levels of compensation paid to Nielsen’s Executive Director are consistent with our philosophy and are serving their purposes well – Merger Proposalmotivate accomplishment of annual performance goals that drive long-term business objectives and deliver sustainable long-term value to our shareholders. We will continue to monitor the design and effectiveness of our executive compensation program as it applies to our Executive Director annually and make modifications as appropriate.
Non-Executive Director Program
No changes were made toNon-Executive Director compensation.
On October 19, 2017 Guerrino De Luca was added to the Board as aNon-Executive Director.
On May 23, 2017 David Calhoun, Kathryn Marinello and Vivek Ranadive terminated their service from the Board asNon-Executive Directors.
On August 25, 2017 James Kilts terminated service from the Board as aNon-Executive Director.
/s/ Harish Manwani
Compensation Committee Chairperson
CONTENTSANNUAL REPORT ON DIRECTORS’ COMPENSATION
The following is provided on an audited basis.
Compensation of Executive Director
The following table sets forth the compensation of Mitch Barns, our CEO, who is our Executive Director, during 2016 and 2017:
Base
| Benefits and Other1
| Annual
| Long Term Incentives2
| Pensions3
| Total
| |||||||||||||||||||
2017
|
| 1,000,000
|
|
| 26,041
|
|
| 1,700,000
|
|
| 3,269,725
|
|
| 8,100
|
|
| 6,003,866
|
| ||||||
2016
|
| 1,000,000
|
|
| 24,327
|
|
| 1,700,000
|
|
| 4,548,242
|
|
| 7,950
|
|
| 7,280,519
|
|
1 | Taxable benefits paid to Mr. Barns include but are not limited to financial planning, healthcare benefits and Company paid life insurance benefits. |
2 | The amounts disclosed in this column represent the vesting date fair market value of awards and include any dividend equivalents paid. |
Values for awards vested in 2017 were due to the CEO’s ongoing employment with the Company: |
Stock Options: 9/25/2017 ($53,698), 10/20/2017 ($0), 10/29/2017 ($0) and 10/29/2017 ($0) |
RSUs: 2/12/2017 ($242,823), 2/18/2017 ($248,481), 7/25/2017 ($637,114), 9/25/2017 ($102,167), 10/20/2017 ($299,085), 10/29/2017 ($248,198) and 10/29/2017 ($318,704) |
Performance Restricted Shares: 2/16/2017 ($1,119,456) |
3 | The amounts indicated for Mr. Barns represent 401(k) employer matching contributions in 2016 and 2017. |
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
|
DIRECTORS’ COMPENSATION REPORT |
ANNEX A – Merger ProposalCompensation ofNon-Executive Directors
The following table sets forth the compensation of ourNon-Executive Directors during 2016 and 2017:
The undersigned:
Board Fees | Board Chairperson Fee | Committee Chairperson Fees | Equity Vesting | Total | ||||||||||||||||
James A. Attwood
| ||||||||||||||||||||
2017
|
| 80,000
|
|
| 150,000
|
|
| 142,858
|
|
| 372,858
|
| ||||||||
2016
|
| 80,000
|
|
| 150,000
|
|
| —
|
|
| 167,891
|
|
| 397,891
|
| |||||
David Calhoun1
| ||||||||||||||||||||
2017
|
| 31,556
|
|
| 73,623
|
|
| 105,179
|
| |||||||||||
2016
|
| 80,000
|
|
| —
|
|
| —
|
|
| 7,584,715
|
|
| 7,664,715
|
| |||||
Guerrino De Luca2
| ||||||||||||||||||||
2017
|
| 16,044
|
|
| —
|
|
| 16,044
|
| |||||||||||
Karen M. Hoguet
| ||||||||||||||||||||
2017
|
| 80,000
|
|
| 25,000
|
|
| 142,858
|
|
| 247,858
|
| ||||||||
2016
|
| 80,000
|
|
| —
|
|
| 25,000
|
|
| 152,891
|
|
| 257,891
|
| |||||
James Kilts3
| ||||||||||||||||||||
2017
|
| 52,088
|
|
| 106,537
|
|
| 158,625
|
| |||||||||||
2016
|
| 80,000
|
|
| —
|
|
| —
|
|
| 165,378
|
|
| 245,378
|
| |||||
Harish Manwani
| ||||||||||||||||||||
2017
|
| 80,000
|
|
| 20,000
|
|
| 142,858
|
|
| 242,858
|
| ||||||||
2016
|
| 80,000
|
|
| —
|
|
| —
|
|
| 163,176
|
|
| 243,176
|
| |||||
Kathryn Marinello4
| ||||||||||||||||||||
2017
|
| 31,556
|
|
| 7,888
|
|
| 63,763
|
|
| 103,207
|
| ||||||||
2016
|
| 80,000
|
|
| —
|
|
| —
|
|
| 152,891
|
|
| 232,891
|
| |||||
Robert C. Pozen
| ||||||||||||||||||||
2017
|
| 80,000
|
|
| 15,000
|
|
| 142,858
|
|
| 237,858
|
| ||||||||
2016
|
| 80,000
|
|
| —
|
|
| 15,000
|
|
| 152,891
|
|
| 247,891
|
| |||||
Vivek Ranadive5
| ||||||||||||||||||||
2017
|
| 31,556
|
|
| 63,763
|
|
| 95,319
|
| |||||||||||
2016
|
| 80,000
|
|
| —
|
|
| —
|
|
| 152,891
|
|
| 232,891
|
| |||||
David Rawlinson
| ||||||||||||||||||||
2017
|
| 80,000
|
|
| 80,000
|
| ||||||||||||||
Javier G. Teruel | ||||||||||||||||||||
2017
|
| 80,000
|
|
| 142,858
|
|
| 222,858
|
| |||||||||||
2016
|
| 80,000
|
|
| —
|
|
| 20,000
|
|
| 152,891
|
|
| 252, 891
|
| |||||
Lauren Zalaznick
| ||||||||||||||||||||
2017
|
| 80,000
|
|
| 142,858
|
|
| 222,858
|
| |||||||||||
2016
|
| 60,000
|
|
| —
|
|
| 75,893
|
|
| 135,893
|
|
Mr. Calhoun terminated service on May 23, 2017. |
together constituting the entire board of directors of Nielsen Holdings Limited, a company limited by shares incorporated under the laws of England and Wales, with registered number 9422989, having its registered office at AC Nielsen House, London Road, Oxford, Oxfordshire, OX3 9RX, United Kingdom (“Nielsen-UK” and also the “Acquiring Company”);
and
Mr. Kilts terminated service on August 25, 2017. |
Ms. Marinello terminated service on May 23, 2017. |
Mr. Ranadive terminated service on May 23, 2017. |
together constituting the entire board of directors of Nielsen N.V., a public company (naamloze vennootschap) incorporated under the laws of The Netherlands, having its seat (statutaire zetel) in Amsterdam, The Netherlands, and its registered office at Diemerhof 2, 1112 XL Diemen, The Netherlands, and registered with the Dutch Commercial Register (Handelsregister) under number 34248449 (“Nielsen-Netherlands” and also the “Disappearing Company” and together with Nielsen-UK, the “Merging Companies” and each individually, a “Merging Company”)
WHEREAS:
|
DIRECTORS’ COMPENSATION REPORT |
ANNEX A – Merger ProposalFollowing its annual review ofNon-Executive Director compensation the Board agreed that no changes were to be made toNon-Executive Director compensation.
Compensation Component (Annual)
| 2017
| Future
| ||||||
Board Fees1
|
| $ 80,000
|
|
| $ 80,000
|
| ||
Board Chairperson Fee2
|
| 150,000
|
|
| $150,000
|
| ||
Committee Chairperson Fee |
| Governance: $ 15,000 Compensation: $ 20,000 Audit: $ 25,000
|
|
| Governance: $ 15,000 Compensation: $ 20,000 Audit: $ 25,000
|
| ||
Equity Grant3
|
| $160,000
|
|
| $160,000
|
|
1 | Directors may elect to receive Board fees in cash or in DSUs. |
Performance Against Performance Targets for Annual Incentive for our Executive Director
A maximum annual incentive payout fund for the CEO is determined by a formula which calculates 2% of Adjusted EBITDA performance and allocates it to each executive officer in proportions ranging between 10% and 20% of the fund. This yielded a maximum potential award of $8,140,000 for the CEO. The Committee exercises negative discretion to determine final payouts using the Annual Incentive Plan Formula (described below). This approach is intended to qualify payouts under the plan as tax deductible under US tax code Section 162(m).
Annual Incentive Plan Formula
The funding/initial payout formula (shown below) is based on Adjusted EBITDA growth (as defined onpage B-2 of the Directors’ Compensation Policy). For 2017, a funding/initial payout of 100% would be achieved when Adjusted EBITDA performance meets a 5.5% growth target. Maximum funding and individual payouts are capped at 200% of target. Threshold performance yields a payout/initial funding of 70%. If performance falls below the threshold, no payouts are funded.
2017 Performance-Payout Formula
Performance Milestones
| Growth vs Prior Year
| Funding/ Initial Payout %
| ||||||
Maximum
|
| 158%
|
|
| 200%
|
| ||
Exceptional
|
| 126%
|
|
| 120%
|
| ||
Target
|
| 105%
|
|
| 100%
|
| ||
Minimum
|
| 95%
|
|
| 70%
|
| ||
< Minimum
|
| <95%
|
|
| Zero
|
|
Additionally, the Compensation Committee considers total Company financial performance and the Executive Director’s contribution to that performance, prior to determining final awards. Performance against objectives is assessed and consideration given to qualitative factors such as degree of difficulty, extraordinary market circumstances and leadership impact. As a result, the initial payout may be adjusted up or down to ensure that total performance is reflected in the final payout.
2018 PROXY STATEMENT A-5 |
DIRECTORS’ COMPENSATION REPORT |
2017 Results
Performance Against Performance Targets for Long Term Incentive Vesting for our Executive Director
2017 Awards
The following table shows the aggregate grant date fair value (based on the share price on the grant date) and the number of the RSUs and stock options granted in 2017 to our Executive Director under the Nielsen 2010 Stock Incentive Plan.
Date | Time Vested RSUs | Performance Vested RSUs | Options | Vesting Date1 | Total | |||||||||||||||||||||||||||||||||||||||
Share | Grant | # of | Grant | # of | % Receivable if | Grant | # of | Exercise | ||||||||||||||||||||||||||||||||||||
11/13/2017
| $
| 36.17
|
|
| 3,749,997
|
|
| 103,677
|
|
| 3,717,434
|
|
| 83,613
|
|
| 50%
|
|
| 0
|
|
| 0
|
| $
| 0
|
|
| 10/18/2021
|
|
| 7,467,431
|
|
1 | Vesting of these awards will |
Time-Vested Restricted Stock Unit Awards
The following table provides information regarding the time-vested RSUs outstanding at the beginning and end of the year ended December 31, 2017 for our Executive Director:
Award Date | End of | Unvested at 1/1/20171 | RSUs | RSUs | Unvested 12/31/20171 | Market Price | Market Price | |||||||||||||||||||||
7/25/2013
|
| 7/25/2017
|
|
| 16,237
|
|
| —
|
|
| 16,497
|
|
| —
|
|
| $33.25
|
|
| $38.62
|
| |||||||
9/25/2013
|
| 9/25/2017
|
|
| 2,423
|
|
| —
|
|
| 2,484
|
|
| —
|
|
| $36.56
|
|
| $41.13
|
| |||||||
10/29/2014
|
| 10/29/2018
|
|
| 12,557
|
|
| —
|
|
| 6,435
|
|
| 6,493
|
|
| $41.92
|
|
| $38.57
|
| |||||||
2/12/2015
|
| 2/12/2017
|
|
| 5,480
|
|
| —
|
|
| 5,480
|
|
| —
|
|
| $43.57
|
|
| $44.31
|
| |||||||
10/29/2015
|
| 10/29/2019
|
|
| 24,186
|
|
| —
|
|
| 8,263
|
|
| 16,674
|
|
| $47.95
|
|
| $38.57
|
| |||||||
2/18/2016
|
| 2/18/2020
|
|
| 11,027
|
|
| —
|
|
| 5,512
|
|
| 5,703
|
|
| $47.85
|
|
| $45.08
|
| |||||||
10/20/2016
|
| 10/20/2020
|
|
| 27,955
|
|
| —
|
|
| 7,162
|
|
| 21,683
|
|
| $54.05
|
|
| $41.76
|
| |||||||
11/13/2017
|
| 10/18/2021
|
|
| —
|
|
| 103,677
|
|
| —
|
|
| 104,609
|
|
| $36.17
|
|
| N/A
|
|
1. Corporate Information of the Merging Companies
| ||
| ||
| ||
| ||
| ||
| ||
| ||
|
DIRECTORS’ COMPENSATION REPORT |
ANNEX A – Merger ProposalPerformance-Vested Restricted Stock Unit Awards
The following provides information regarding the PRSUs outstanding at the beginning and end of the year ended December 31, 2017 for our Executive Director:
Award | Vest Date | Measurement | Unvested | RSUs | RSUs | RSUs | Unvested | Fair | Market | Value on Vesting | ||||||||||||||||||||||||||||||
2/20/2014
|
| February 2017
|
|
| 2014-2016
|
|
| 43,500
|
|
| —
|
|
| 24,960
|
|
| —
|
|
| —
|
| $
| 46.40
|
| $
| 44.85
|
| $
| 1,119,456
|
| ||||||||||
2/19/2015
|
| February 2018
|
|
| 2015-2017
|
|
| 65,860
|
|
| —
|
|
| —
|
|
| —
|
|
| 65,860
|
| $
| 45.55
|
|
| N/A
|
|
| N/A
|
| ||||||||||
2/18/2016
|
| February 2019
|
|
| 2016-2018
|
|
| 73,146
|
|
| —
|
|
| —
|
|
| —
|
|
| 73,146
|
| $
| 47.85
|
|
| N/A
|
|
| N/A
|
| ||||||||||
2/16/2017
|
| February 2020
|
|
| 2017-2019
|
|
| —
|
|
| 83,613
|
|
| —
|
|
| —
|
|
| 83,613
|
| $
| 44.85
|
|
| N/A
|
|
| N/A
|
|
LTPP participants are awarded a target number of PRSUs that are earned subject to the Company’s performance against two cumulative three-year performance metrics, Relative Total Shareholder Return (“Relative TSR”) and Free Cash Flow (“FCF”), with assigned ratings of 40% and 60% respectively. The Committee decided to assign more weight to the FCF metric over which executives have relatively more direct control. Our Committee has decided not to disclose the actual FCF target because it is commercially sensitive information.
The following sets forth the LTPP performance thresholds for PRSU grants made in 2014 through 2017.
Relative TSR | Weighting | Performance | 30th Percentile Relative | 50th Percentile Relative | 75th Percentile Relative | |||||||||||||||
| 40%
|
|
| Payout
|
|
| 50%
|
|
| 100%
|
|
| 200%
|
| ||||||
Free Cash Flow | Weighting | Performance | 85% of target | 100% of target | 120% of target | |||||||||||||||
| 60%
|
|
| Payout
|
|
| 50%
|
|
| 100%
|
|
| 200%
|
|
Time vested Stock Option Awards
The following provides information regarding the time-vested stock options outstanding at the beginning and end of the year ended December 31, 2017 for our Executive Director:
Award Date | Outstanding | Granted | Exercised | Outstanding | # of | # of | Exercise | Expiration | ||||||||||||||||||||||||
3/18/2010
|
| 62,500
|
|
| —
|
|
| 62,500
|
|
| —
|
|
| —
|
|
| —
|
| $
| 18.40
|
|
| 3/18/2020
|
| ||||||||
7/26/2012
|
| 80,000
|
|
| —
|
|
| —
|
|
| 80,000
|
|
| 80,000
|
|
| —
|
| $
| 27.98
|
|
| 7/26/2019
|
| ||||||||
9/25/2013
|
| 47,000
|
|
| —
|
|
| —
|
|
| 47,000
|
|
| 47,000
|
|
| —
|
| $
| 36.56
|
|
| 9/25/2020
|
| ||||||||
10/29/2014
|
| 141,000
|
|
| —
|
|
| —
|
|
| 141,000
|
|
| 105,750
|
|
| 35,250
|
| $
| 41.92
|
|
| 10/29/2021
|
| ||||||||
10/29/2015
|
| 177,515
|
|
| —
|
|
| —
|
|
| 177,515
|
|
| 88,757
|
|
| 88,758
|
| $
| 47.95
|
|
| 10/29/2022
|
| ||||||||
10/20/2016
|
| 191,571
|
|
| —
|
|
| —
|
|
| 191,571
|
|
| 47,892
|
|
| 143,679
|
| $
| 54.05
|
|
| 10/20/2023
|
|
The gain on exercised options for the |
| ||
| ||
| ||
| ||
| ||
| ||
| ||
|
|
DIRECTORS’ COMPENSATION REPORT |
ANNEX A – Merger ProposalPensions
Pension Benefits for 2017
The following table presents information regarding the pension benefits for our Executive Director during the fiscal year ended December 31, 2017.
Name | Plan Name | Number of Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments Last Fiscal ($) | ||||||||||||
Mitch Barns
|
| Qualified Plan
|
|
| 4.42
|
|
| 47,989
|
|
| —
|
| ||||
| Excess Plan
|
|
| 4.42
|
|
| 35,696
|
|
| —
|
|
For details on the assumptions used to determine the present value of the accumulated benefit and on our US Retirement Plans, please refer to Note 14 in the consolidated financial statements.
Participants in the Qualified Plan become fully vested in their accrued benefits after the earlier of five years of service or when the participant reaches normal retirement age (which is the later of age 65 or the fifth anniversary of the date the participant first became eligible to participate in the plan).
Reduced early retirement benefits are available to Mr. Barns under the Excess Plan once he reached age 40 and completed 5 years of service. Mr. Barns is eligible for early retirement. The early retirement benefits payable are actuarially reduced to be equivalent to the benefit payable at normal retirement age for Mr. Barns.
Non-Executive Directors do not receive pension benefits.
Effective August 31, 2006, the Company froze its United States qualified andnon-qualified defined benefit retirement plans.
Payments to Past/Former Directors
There were no payments to past/former Directors for the year ended December 31, 2017.
Payments for Loss of Office
There were no payments for loss of office for the year ended December 31, 2017.
2. Measures in connection with Exchange of Share Ownership
|
3. Designation and Valuation of the Assets and Liabilities of Nielsen-Netherlands to be Transferred to Nielsen-UK A-8
4. Consideration for the Merger, Exchange Ratio and terms of allotment of Nielsen-UK Shares
DIRECTORS’ COMPENSATION REPORT |
ANNEXStatement of the Directors’ Shareholdings and Share Interests
In 2011, our Board adopted share ownership guidelines, pursuant to which our Directors who receive fees for their services are required to maintain equity ownership in our Company. The share ownership guidelines for our Executive Director are six times his base salary and for ourNon-Executive Directors is five times their annual fees (including Board Retainer, Board Chairperson, and Committee Chairperson Fees). Shares beneficially owned by these Directors, including vested DSUs and jointly-owned shares, unvested DSUs, and unvested RSUs in the case of our Executive Director, are included in the calculation. These Directors are expected to meet the guidelines within five years from the later of the adoption of the guidelines or their appointment as a Director or the commencement of the receipt of Director fees. A – Merger ProposalDirector may not sell or dispose of shares for cash unless the share ownership guidelines are satisfied. The share ownership guidelines are reviewed annually generally in the first Compensation Committee meeting of the year. As of December 31, 2017, five of the Directors have met the guidelines and four of the Directors were still working toward meeting the guidelines. The following table provides details on the Directors’ shareholdings as at December 31, 2017:
Director
| Beneficially
| %
| Vested but
| Exercised
| RSU Awards
| RSU Awards
|
Weighted
| |||||||||||||||||||||
James A. Attwood |
|
40,828 |
|
|
100% |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||
Mitch Barns1 |
|
200,478 |
|
|
100% |
|
|
369,399 |
|
|
62,500 |
|
|
222,619 |
|
|
155,162 |
|
|
41.24 |
| |||||||
Guerrino De Luca |
|
1,958 |
|
|
18% |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||
Karen M. Hoguet |
|
31,085 |
|
|
100% |
|
|
12,500 |
|
|
— |
|
|
— |
|
|
— |
|
|
28.57 |
| |||||||
Harish Manwani |
|
10,408 |
|
|
74% |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||
Robert C. Pozen |
|
228,326 |
|
|
100% |
|
|
40,335 |
|
|
— |
|
|
— |
|
|
— |
|
|
25.32 |
| |||||||
David Rawlinson |
|
3,913 |
|
|
36% |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||
Javier G. Teruel |
|
27,436 |
|
|
100% |
|
|
34,172 |
|
|
— |
|
|
— |
|
|
— |
|
|
26.87 |
| |||||||
Lauren Zalaznick |
|
9,597 |
|
|
87% |
|
|
0 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
1 | Beneficially owned shares includes 194,775 of shares owned at December 31, 2017 and 5,703 unvested RSUs as of March 1, 2018. |
The following information is provided on an unaudited basis.
5. Determination of the Merger Exchange Ratio
The selected Exchange Ratio provides for the issue of one new Nielsen-UK ordinary share for one Nielsen-Netherlands common share, corresponding to a resulting parity of 1:1.
6. Accounts
The Merger shall take place on the basis of the audited non-adopted annual accounts of Nielsen-Netherlands for the financial year ended 31 December 2014 (the “Merger Accounts”) set out in Schedule 6 of this Merger Proposal and the relevant financial statements of Nielsen-UK for the period ended 28 February 2015. The audited annual accounts of Nielsen-Netherlands for the financial years ended 31 December 2013, 31 December 2012 and 31 December 2011 are filed with the Dutch Commercial Register (Handelsregister) and available to shareholders of Nielsen-Netherlands as of the date hereof.
2018 PROXY STATEMENT A-9 7. Consequences of the Merger7.1As soon as practicable following the date hereof, the board of directors of Nielsen-Netherlands (or, if appropriate, any committee thereof administering the 2006 Stock Acquisition and Option Plan for Key Employees of Nielsen N.V. and its Subsidiaries, the Amended and Restated Arbitron Inc. 2008 Equity Compensation Plan or the Amended and Restated Nielsen 2010 Stock Incentive Plan, (collectively, the “Company Equity Incentive Plans”)), shall adopt such resolutions and take such other actions (including adopting any plan amendments) as are required to provide that:
DIRECTORS’ COMPENSATION REPORT |
ANNEX A – Merger ProposalPerformance Graph
The chart below shows the cumulative TSR of Nielsen stock assuming an initial $100 investment over the period beginning on January 26, 2011 and ending December 31, 2017. We have compared our performance to the S&P 500 and to a marketcap-weighted composite of the peer group we use to measure total shareholder return in our LTPP. We believe these two indices are key to measuring our performance in our industry.
NIELSEN HOLDINGS PLC—CUMULATIVE TOTAL SHAREHOLDER RETURN SINCE IPO
Chief Executive Officer’s Compensation in the Past Seven Years4
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 | ||||||||||||||||||||||
CEO Single Figure1,2 |
$ |
10,871,106 |
|
$ |
11,139,245 |
|
$ |
18,270,945 |
|
$ |
4,071,634 |
|
$ |
4,774,121 |
|
$ |
7,280,519 |
|
$ |
6,003,866 |
| |||||||
Bonus (% of maximum awarded)3 |
|
56% |
|
|
49% |
|
|
53% |
|
|
51% |
|
|
52% |
|
|
43% |
|
|
43% |
| |||||||
Performance based LTI (% of maximum vesting) |
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
125% |
|
|
57% |
|
Percentage Change in the Chief Executive Officer’s Compensation Compared to Employees
The table below shows the percentage year on year change on salary and bonus earned by the CEO between the year ended December 31, 2017 and the year ended December 31, 2016 compared to the average salary and bonus for senior participants in our global annual incentive plan. The comparator group was chosen as the makeup and calculation of their compensation for the categories in the table below most closely resemble that of our CEO.
% change |
Base Salary |
Bonus |
Total Cash | |||||||||
CEO |
|
0% |
|
|
0% |
|
|
0% |
| |||
Employee Comparator |
|
-2% |
|
|
9% |
|
|
1% |
|
Following the Merger, the composition of the board of directors of Nielsen-UK will be as follows:
2018 PROXY STATEMENT A-10
DIRECTORS’ COMPENSATION REPORT |
ANNEX A – Merger ProposalRelative Importance of Spend on Pay
The table below shows the total pay for all employees compared to other key financial metrics and indicators:
($ in millions1) |
Year Ended: | |||||||||||
December 31, 2016 |
December 31, 2017 |
% Change2 | ||||||||||
Personnel Costs |
|
$ 2,520 |
|
|
$ 2,685 |
|
|
6.3% |
| |||
Dividends paid |
|
$ 434 |
|
|
$ 474 |
|
|
9.2% |
| |||
Share Buybacks |
|
$ 418 |
|
|
$ 140 |
|
|
(66.5% |
) | |||
Average number of employees |
|
43,003 |
|
|
44,594 |
|
|
3.7% |
| |||
Revenues |
|
$ 6,309 |
|
|
$ 6,572 |
|
|
3.8% |
| |||
EBITDA |
|
$ 1,921 |
|
|
$ 2,011 |
|
|
4.0% |
|
The numbers presented above were selected to provide a broad but reasonable context against which to compare the growth of value provided to the CEO, all employees and shareholders. The figures are reported in our 2017 UK Annual Report.
8. Tax ProvisionsConsideration by the Directors of Matters Relating to Directors’ Compensation
In 2017, the Compensation Committee consisted of the following members:
The Committee and the Board are responsible for determining the compensation of our Directors and regularly review the philosophy and goals of the Director compensation program and assess the effectiveness of compensation practices and processes. The Compensation Committee sets performance goals and assesses performance against these goals. The Compensation Committee and the Board operate independently of management and consider the recommendations and market data provided by the Compensation Committee’s independent consultant when reviewing and making compensation decisions. The CEO does not participate in the Committee and Board discussions regarding his own compensation. The Compensation Committee and the Board make their decisions based on their assessment of both Nielsen and individual performance against goals, market data provided by the Compensation Committee’s independent compensation consultant, and on their judgment as to what is in the best interests of Nielsen and its shareholders.
The Compensation Committee is empowered to study or investigate any matter of interest or concern that the Compensation Committee deems appropriate and shall have the sole authority to retain, oversee the work of, obtain advice from and terminate any compensation consultant, independent legal counsel or other adviser. The Company shall provide appropriate funding, as determined by the Compensation Committee, for payment of reasonable compensation to any compensation consultant, independent legal counsel or other advisers retained by the Compensation Committee, as well as funding for the payment of ordinary administration expenses of the Compensation Committee that are necessary or appropriate in carrying out its duties.
The Compensation Committee undertakes an independence assessment prior to selecting any compensation consultant, legal counsel or other advisors that will provide advice to the Compensation Committee (other thanin-house legal counsel) taking into account such factors as may be required by the New York Stock Exchange, the UK Companies Act 2006 and any other relevant legislation or regulation from time to time.
2018 PROXY STATEMENT A-11 |
DIRECTORS’ COMPENSATION REPORT |
ANNEX A – Merger ProposalAny compensation consultant retained by the Compensation Committee to assist it in connection with setting the amount or form of Director compensation (other than any role limited to consulting on any broad-based plan that does not discriminate in scope, terms, or operation, in favor of executive officers or Directors of the Company, and that is available generally to all salaried employees; or providing information that either is not customized for the Company or that is customized based on parameters that are not developed by the compensation consultant, and about which the compensation consultant does not provide advice) shall not provide any other services to the Company or its subsidiaries, unless such services arepre-approved by the Compensation Committee. The Compensation Committee shall evaluate, on at least an annual basis, whether any work provided by the Compensation Committee’s compensation consultant raised any conflict of interest.
The Compensation Committee retains Meridian Compensation Partners, LLC (“Meridian”) as its compensation consultant. Meridian has provided market data and perspective on Executive andNon-Executive Director compensation and related governance. Meridian and its affiliates did not provide any services to Nielsen or its affiliates in 2017 other than executive and Director compensation consulting to the Compensation Committee. Discussions between Meridian and Nielsen management are limited to those necessary to complete work on behalf of the Committee.
The Compensation Committee determined that Meridian and its lead consultant for Nielsen satisfy the independence factors described in the NYSE listing rules. The Compensation Committee also determined that the work performed by Meridian in 2017 did not raise any conflict of interest issues.
In 2017, Nielsen paid $323,110.04 to Meridian for services rendered.
Implementation of Policy in 2018
The Company’s shareholders will be asked to approve a new Directors’ Compensation Policy at the annual meeting of shareholders in 2018 (disclosed in Annex B). If approved, Directors’ pay in 2018 will be in line with this policy.
Statement of Voting at General Meeting
At the Annual General Meeting of Shareholders on May 23, 2017, the shareholder advisory vote on the Directors’ Compensation Report received the following votes:
Votes |
% of Total Votes | |||||||
Votes Cast in Favor |
|
301,207,593 |
|
|
98.2% |
| ||
Votes Cast Against |
|
5,594,145 |
|
|
1.8% |
| ||
Total Votes Cast |
|
306,801,738 |
|
|
100% |
| ||
Votes Withheld1 |
|
14,763,722 |
|
|
N/A |
|
1 | For purposes of calculating our overall voter approval, we have excluded votes withheld. |
The Directors’ Compensation Policy was not put to a vote of shareholders at the 2017 Annual General Meeting of Shareholders.
|
An unconditional agreement to transfer Nielsen-UK Shares that are not within the DTC system will normally give rise to a charge to SDRT at the rate of 0.5% of the amount or value of the consideration for the shares. However, where within six years of the date of the agreement an instrument of transfer is executed and duly stamped, the SDRT liability will be cancelled and any SDRT which has been paid may be reclaimed. SDRT is normally the liability of the purchaser of the shares.
If Nielsen-UK Shares not held within the DTC system are transferred (a) to, or to a nominee for, a person whose business is or includes the provision of clearance services (including the DTC) or (b) to, or to a nominee or agent for, a person whose business is or includes issuing depositary receipts, stamp duty or SDRT may be payable at a rate of 1.5% of the amount or value of the consideration payable or, in certain circumstances, the value of the shares. This liability for stamp duty or SDRT will strictly be accountable by the depositary or clearance service operator or their nominee, as the case may be, but will in practice generally be reimbursed by participants in the clearance service or depositary receipt scheme.
Repurchase of Nielsen-UK Shares
The repurchase of Nielsen-UK Shares by Nielsen-UK (whether held within the DTC system or not) will attract a charge to stamp duty of 0.5% of the consideration paid by Nielsen-UK in respect of the repurchase.
9. Withdrawal Right A-12
ANNEX A – Merger Proposal
an average closing price per share provided on a daily basis by the New York Stock Exchange over a period of twenty (20) trading days prior to the date the merger becomes effective.”
|
ANNEX A – Merger Proposal
The aforementioned compensation shall be paid in accordance with the terms and conditions of the aforementioned merger proposal.”
10. Results of the Merger
ANNEX A – Merger Proposal
As a result, Nielsen-UK (i) shall bear all taxes, charges, premiums, contributions or equivalent as well as all ordinary and extraordinary costs and expenses which encumber or shall encumber the transferred properties or which are attached to their ownership or management, and (ii) serve, where necessary and in timely manner, all notices and steps with all authorities required for the transfer of the assets;
Any agreement entered into between the Acquiring Company and the Disappearing Company shall, as a result of this Merger, be automatically terminated as from the Effective Time. However, any agreements to which any third party is also a party shall continue to apply with regards the Acquiring Company including the assumption by Nielsen-UK of (i) all guarantees of subsidiary indebtedness made by Nielsen-Netherlands and (ii) all indemnification agreements between Nielsen-Netherlands and its executive officers and directors, in each case to the extent outstanding at the time of the Merger.
11. Conditions Precedent
|
ANNEX A – Merger Proposal
|
ANNEX A – Merger Proposal
12. Employee Participation
Given that Nielsen-UK and Nielsen-Netherlands are not subject to employee participation as referred to in article 2:333k paragraph DCC and part 4 of the UK Regulations, no procedure for the establishment of rules concerning employee participation in respect of Nielsen-UK needs to be followed and the provisions of article 16 of the Directive 2005/56/EC of the European Parliament and of the Council of 26 October 2005 on cross-border mergers of limited liability companies shall not apply.
13. Appointment of Independent Expert and the Independent Expert’s Report
In accordance with article 2:328 paragraph 1 and article 2:333g of the DCC and regulation 9(2) of the UK Regulations, the boards of directors of the Merging Companies appointed independent experts in the Netherlands and England and Wales to examine this Merger Proposal, to give the declarations referred to in article 2:328 paragraph 1 DCC and regulation 9(5) of the UK Regulations and to each draw up a report as referred to in article 2:328 paragraph 2 DCC and regulation 9 of the UK Regulations that will be filed with the Dutch Commercial Register (Handelsregister) at the same time as this Merger Proposal.
14. Miscellaneous
ANNEX A – Merger Proposal
Signature page to the Merger Proposal of Nielsen N.V. as the disappearing company
and Nielsen Holdings Limited as the surviving company
Board of directors of Nielsen Holdings Limited:
|
| |||
Our Directors’ Compensation Policy applies to our Executive Director, as CEO (as well as any individual who may become an Executive Director while this policy is in effect) and ourNon-Executive Directors.
Signature page to the Merger Proposal of Nielsen N.V. as the disappearing companyCOMPENSATION POLICY FOR EXECUTIVE DIRECTORS
and Nielsen Holdings Limited as the surviving companyPhilosophy
BoardFoster meritocracy
Pay competitively
Emphasize variable, at risk pay subject to performance – the executive compensation framework
Target Compensation Framework | ||||||||
Pay Component |
(Total Pay) | Guaranteed/At Risk | ||||||
Base Salary |
| |||||||
Guaranteed | ||||||||
Target Annual Incentive | Up to 30% | |||||||
Total Cash | Not to exceed 50% | |||||||
Target LTI Performance Awards | 30 – 50% | At Risk | ||||||
Target LTI Time-Vested Awards | 20 – 35% | At Risk | ||||||
Total Equity | No less than 50% |
|
| |||||||
|
| |||||||
|
| |||||||
|
| |||||||
| ||||||||
DIRECTORS’ COMPENSATION POLICY |
ANNEX A – Merger Proposal
SCHEDULE 1
ARTICLES OF ASSOCIATION OF NIELSEN HOLDINGS LIMITED
ANNEX A – Merger Proposal
SCHEDULE 2
ARTICLES OF ASSOCIATION OF NIELSEN N.V.Compensation Policy for Executive Directors
Element | Purpose | How Component Operates | ||
Annual Base Salary | Attract and retain top talent | •Reviewed in intervals of24-36+ months •When reviewing base salary levels and determining increases, the Compensation Committee and the Board consider a variety of factors including: (1) our pay for performance philosophy, (2) market benchmark compensation data, (3) the Director’s individual performance and contributions to the success of the business in the prior year, (4) Company performance, (5) current pay mix, and (6) role changes | ||
Annual Incentive Plan (“AIP”) | Motivate Executive Directors to accomplish short-term business performance goals that contribute to long-term business objectives | •Annual incentive target opportunities are established each year with reference to (1) our pay for performance philosophy, (2) market benchmark compensation data, (3) the Director’s individual performance and contributions to the success of the business in the prior year, (4) Company performance, (5) current pay mix, (6) role changes, and (7) prior year target •The Compensation Committee determines individual payout using the annual incentive plan design applicable to all managerial employees •A combination of Adjusted EBITDA performance and revenue performance, weighted 75% and 25% respectively, formulaically determines incentive plan funding and the initial payout percentage for all participants. The metrics and their contribution to the plan funding operate independently of one another •100% Adjusted EBITDA performance to target = 100% contribution to the incentive pool funding and 100% initial individual payout for the Adjusted EBITDA metric • 100% revenue performance to target = 100% contribution to the incentive pool and 100% initial individual payout for the revenue metric •The initial payout percentage may be adjusted up or down based on a quantitative and qualitative assessment of individual performance vs objectives | ||
•Threshold performance will result in an initial payout/funding of 50% for the Adjusted EBITDA and revenue metrics with zero funding for below threshold performance •Additionally, Adjusted EBITDA performance must meet the minimum threshold for the revenue segment to fund •Annual incentive plan funding and payouts are subject to a maximum limit of 200% of target •Actual payouts and the performance metrics used to determine them will be disclosed in the Directors’ Compensation Report in the year payouts are made •The calculation of EBITDA and revenue performance for annual incentive plan purposes differs from reported Adjusted EBITDA and reported revenue because it is calculated using a standard foreign currency exchange rate established at the beginning of the year in order to eliminate the impact of currency exchange volatility on the performance assessment •Payout is intended to be delivered 100% in cash but may be delivered in a mixture of cash and restricted stock units at the Compensation Committee’s discretion •Payouts are subject to recoupment under the terms of Nielsen’s Clawback Policy | ||||
Long-Term Incentive (“LTI”) | Deliver long-term sustainable performance and align Executive Director rewards with long-term returns delivered to shareholders | •LTI award values are determined each year by reference to (1) our pay for performance philosophy, (2) market benchmark compensation data, (3) the Director’s individual performance and contributions to the success of the business in the prior year, (4) Company performance, (5) current pay mix, (6) role changes, and (7) prior year award | ||
Performance Restricted Stock Units (“PRSUs”) | Alignment with long-term shareholder return | •Subject to performance against three three-year cumulative performance metrics, free cash flow, relative total shareholder return and revenue CAGR with assigned weighting of 50%, 25% and 25%, respectively | ||
•Specific threshold, target and maximum performance metrics for three-year cumulative free cash flow performance will not be disclosed for competitive reasons but targets are designed to be aggressive and achievable and are fully aligned with our approved three-year strategic plan and long-term guidance issued to investors at the beginning of the performance period |
2018 PROXY STATEMENT B-2 |
ANNEX A – Merger Proposal
SCHEDULE 3
PROPOSED ARTICLES OF ASSOCIATION OF NIELSEN HOLDINGS PLC
Company No. 9422989
INCORPORATED UNDER THE COMPANIES ACT 2006
THE COMPANIES ACT 2006
PUBLIC COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
of
NIELSEN HOLDINGS PLC
Incorporated on 4 February 2015
Adopted on
DIRECTORS’ COMPENSATION POLICY |
Element | Purpose | How Component Operates | ||
•Targets and actual results used to determine payouts will be disclosed in the Director’s Compensation Report in the year that payouts are approved • Relative total shareholder return (TSR) is measured against a peer group used solely for this purpose. Companies in this peer group are selected to represent a comparable investment profile to Nielsen by virtue of their being in comparable businesses, and having a similar financial profile and stock price correlation. • Revenue is measured based on compounded annual growth rate (CAGR) over the three year period. Revenue targets are designed to be aggressive and achievable and are fully aligned with our approved three-year strategic plan and long-term guidance issued to investors at the beginning of the period. •Represents approximately 60% of the annual LTI value • Zero payout for performance below threshold • For performance at threshold, the payout opportunity is 50% and for performance at target, 100% • Maximum payout opportunity is capped at 200% of target • For the relative TSR component, payouts capped at target if absolute total shareholder return is negative • No dividend equivalents on unearned performance RSUs • Subject to recoupment under the terms of Nielsen’s Clawback Policy | ||||
Restricted Stock Units (“RSUs”) | Alignment with shareholder return and retention | •Four-year time-vested •Represents approximately 40% of LTI value •Dividend-equivalents on RSU awards are accrued and delivered as additional RSUs upon vesting •Maximum payout not to exceed 100% of shares at the end of the vesting period, plus any earned dividends equivalents (if applicable, whether on vested or unvested) | ||
Health And Welfare Plans, Perquisites | Promote overall well-being and avoid distractions caused by unforeseen health/financial issues | •Health and Welfare plans generally available to other employees, including medical insurance and savings accounts •De minimis financial planning and wellness allowances •Other benefits may include provision of transport • The cost of the Health and Welfare plans and perquisites provided changes in accordance with market conditions and will, therefore, determine the maximum amount that would be paid in the form of benefits during the period of this policy | ||
Pension | Provide additional income in retirement and promote overall financial wellbeing | Qualified Cash Balance Pension Plan (the “Qualified Plan”) •Plan frozen on August 31, 2006 •Prior to the freeze we added monthly basic and investment credits to each participants account •The basic credit equaled 3% of a participants eligible monthly compensation •At the point of freeze, all basic credits were stopped, but participants continue to receive investment credits •Participants became vested in the accrued benefits on the earlier of five years of service or when the participant reached normal retirement age (which is the later of age 65 or the fifth anniversary of the date the participant first became eligible to participate in the plan) Non-qualified Retirement Plan (the “Excess Plan”) • Plan frozen on August 31, 2006 • Available to certain management and highly compensated individuals • Prior to the freeze, the plan provided supplemental benefits to individuals whose benefits under the qualified plan are limited by the provisions of Section 415 and/or Section 401(a)(17) of the US tax code • The amount payable under the Excess Plan is equal to the difference between the benefit actually paid under the qualified plan and the amount that would have been payable had the applicable US tax code limitations not applied | ||
Other Retirement | Attract and retain top talent | 401(k) Savings Plan •Qualified plan available to all eligible employees, enables participants to save for retirement throughtax-advantaged combination of employee contributions and a company matching contribution •The company matching contribution matches $.50 per $1.00 of employee contribution up to 6% of pay and subject to IRS annual limits. Full vesting occurs after 2 years of service |
2018 PROXY STATEMENT B-3 |
ANNEX A – Merger Proposal
CONTENTS
DIRECTORS’ COMPENSATION POLICY |
Element | Purpose | How Component Operates | ||
Relocation/Expat Assistance | ||||
Attract top talent and provide | •Expatriate and relocation benefits are regularly benchmarked against other companies. Current benefits offered include, but are not limited to: •Shipment of goods and services •Home sale/lease termination •House hunting trips •Temporary housing •Housing allowance •Automobile disposition •Goods and services differential allowance •Car/driver allowance •Education fees and expenses for dependent children to age 19 •Home leave •Tax equalization •Tax preparation •Language and cultural training •Destination acclimation services |
Performance Measure Selection
The measures used under the AIP and the LTPP are reviewed and approved by the Compensation Committee annually. The other elements in the table above are not subject to the accomplishment of specific performance targets.
Nielsen’s culture reflects our core values of Open, Connected, Useful, and Personal. Our compensation programs reinforce the values by connecting all of our employees to core business objectives. To that end, the CEO and other executives participate in the same annual incentive plan applicable to managerial employees. Beginning in 2018, the plan will be funded based on the achievement of Company EBITDA performance and Company revenue performance. The Adjusted EBITDA target for incentive plan funding purposes is the equivalent of the EBITDA target approved in our annual operating plan. The target is intended to offer a challenging yet achievable goal for participants. The revenue target is designed to be aggressive and achievable and is fully aligned with our annual operating plan and guidance issued to investors. Nielsen’s business EBITDA and revenue growth are highly correlated to the creation of shareholder value and are effective measures of the Executive Director’s contributions to short-term Company performance.
Three cumulative three-year performance metrics measure performance under the LTPP. Free Cash Flow (“FCF”), relative TSR and revenue CAGR were chosen due to their strong alignment with the long-term returns experienced by our shareholders. FCF is assigned a weighting of 50% and both TSR and revenue CAGR are assigned a weighting of 25% each. Specific FCF targets cannot be disclosed for competitive reasons. Both FCF and revenue CAGR targets are aligned with the aggressive targets approved in thethree-year strategic plan and with our long-term guidance issued to investors.
Under the rules governing the design and operation of the AIP and LTPP, the Compensation Committee has the discretion to select other performance metrics and alter their weighting as business conditions may dictate in the future.
Remuneration Policy for Other Employees
The remuneration policy for other employees is based on the same philosophy and principles that govern the remuneration policy for Executive Directors. Annual salary reviews take into account Company and individual performance, local pay and market conditions, and salary levels for similar roles in the relevant geographies. Senior executives are eligible to participate in the AIP and in LTI programs on similar terms as the Executive Directors. Managerial and professional employees are eligible to participate in the AIP provided for executives; opportunities vary by organizational level and an individual’s role. Some employees below the executive level are eligible to participate in the stock option and RSU components of the LTI program; opportunity levels are commensurate with organizational level.
| ||||
DIRECTORS’ COMPENSATION POLICY |
Loss of Office and Service Agreements
In general we do not provide employment agreements for Executive Directors. The principal terms of employment for Executive Directors are as provided to other eligible employees with the exception of certain de minimis benefits (described within) and certain payments provided in the event the Executive Director is terminated not for cause or resigns for good reason (as defined in the documents referenced below under “Potential Payments Upon Termination or Change In Control”). In certain circumstances the Compensation Committee may provide employment agreements for Executive Directors where it is essential for continued sound governance.
Potential Payments Upon Termination or Change In Control
Severance terms for Executive Directors are defined in the U.S. Severance policy for Section 16 Officers and Senior Executives (the “Severance Policy”) approved by the Committee on July 20, 2017.
The following is a summary of the material terms of the Severance Policy:
A) | Qualifying Termination Outside of the Change in Control Protection Period: If the Executive Director subject to the Severance Policy is terminated by the Company without Cause or resigns for Good Reason (as such terms are defined in the Severance Policy) at any time other than during the24-month period following a change in control (the “Change in Control Protection Period”), such individual has the right to payments equal to, with respect to the CEO, two times, or with respect to other Executive Directors, one times the sum of the Executive Director’s annual base salary and the average of the annual incentive payments paid to the Executive Director in the prior three years. |
B) | Qualifying Termination During the Change in Control Protection Period: If the Executive Director subject to the Severance Policy is terminated by the Company without Cause or resigns for Good Reason during the Change in Control Protection Period, the Executive Director has the right to payments equal to two times the sum of the Executive Director’s annual base salary and the average of the annual incentive payments paid to the Executive Director in the prior three years. |
Change in control is defined in the Severance Policy and includes the acquisition of shares of the Company representing more than 40% of the Company’s capital stock, merger, consolidation or reorganization wherepre-transaction shareholders do not continue to hold at least 50% of the Company’s voting power, change in majority of the Board within a12-month period, and liquidation, dissolution or a material asset sale. The Severance Policy provides for a 280Gbest-after-tax cutback, which applies to any payments or benefits that individuals subject to the Severance Policy are entitled to receive that are “excess parachute payments” under the “golden parachute” excise tax rules of the Internal Revenue Code.
Additionally, under the terms of the 2010 Nielsen Holdings Stock Incentive Plan (“2010 Plan”) if the Executive Director is terminated by the Company without “Cause” or the Executive Director resigns for “Good Reason” (as such terms are defined in the plan document) they will forfeit all unvested equity as of the date of termination with the following exceptions:
The Committee has the discretion to adjust the above payments in the event of extraordinary circumstances including but not limited to approved retirements, death, and permanent disability.
Change In Control Policy
Under the 2010 Plan, as amended, unvested options and RSUs do not vest automatically in the event of a change in control.
2018 PROXY STATEMENT B-5 |
ANNEX A—MERGER PROPOSAL
DIRECTORS’ COMPENSATION POLICY |
Clawback Policy
Our clawback policy requires the Executive Director, in all appropriate cases, to repay or forfeit any bonus, short-term incentive award or amount, or long-term incentive award or amount awarded to the Executive Director, and anynon-vested equity-based awards previously granted to the Executive Director if:
![]() | The amount of the incentive compensation was calculated based upon the achievement of certain financial results that were subsequently the subject of a restatement or the correction of a material error; | |
![]() | The Executive Director engaged in intentional misconduct that caused or partially caused the need for the restatement or caused or partially caused the material error; and | |
![]() | The amount of the incentive compensation that would have been awarded to the Executive Director, had the financial results been properly reported, would have been lower than the amount actually awarded. |
Recruitment of Executive Directors
The compensation package for a new Executive Director will be set in accordance with the terms of the Directors’ Compensation Policy as set forth above or in force at the time of appointment or hiring. In determining the appropriate remuneration structure and levels, the Compensation Committee will take into consideration all relevant factors to ensure that arrangements are in the best interests of the Company and its shareholders.
In addition, to facilitate the recruitment of an individual to an Executive Director position, the Compensation Committee can use cash and/or LTI awards tobuy-out previously-granted incentive awards and no limits will apply under this policy.
For external hires and internal appointments the Company may provide certain relocation reimbursements or allowances including expatriate benefits within limits set by the Compensation Committee that fairly reimburse Executive Directors for expenses incurred and provide for a smooth transition free of unnecessary distractions.
Consideration of Conditions Elsewhere in the Company
The Compensation Committee does not consult with employees specifically on its Executive Director compensation policy and framework however, when determining pay for Executive Directors, the Committee takes into account several data elements including but not limited to:
Consideration of Shareholder Views
On a regular basis, the Compensation Committee engages with shareholders to solicit direct input regarding its Executive Director compensation programs. Input provided during these meetings and from shareholder advisory firms is used to shape our compensation programs. The majority of shareholders continue to express support for our compensation programs.
Illustration of Application of Compensation Policy for Executive Directors
The estimated compensation amounts received by the Executive Directors which group currently includes only our CEO are shown in the following graph.
The amounts show payments at three levels of performance-threshold, target and maximum
2018 PROXY STATEMENT B-6 |
DIRECTORS’ COMPENSATION POLICY |
For the purpose of this illustration the following components’ values are constant at each level of performance:
• | Restricted stock units: planned grant date fair value in 20181 |
The following components’ values vary by each level of performance:
• | LTPP: reflects the fair value1 of PRSUs at grant date at target and percentage payouts of target in accordance with the plan design at threshold and maximum levels of performance. |
($,000)
1 | Calculated in accordance with IFRS 2, Share-based Payments. For a discussion of the assumptions and methodologies used to value the awards granted in 2017 please see Note 16 “Share-Based compensation” to our audited consolidated financial statements, included in our Annual Report for the year ended December 31, 2017. In all cases the values reported assume no share price change relative to closing price of a Nielsen share on the date of grant. |
2018 PROXY STATEMENT B-7 |
DIRECTORS’ COMPENSATION POLICY |
Compensation Policy forNon-Executive Directors
As of the effective date of this Policy, all of our Directors, with the exception of Mitch Barns, our CEO, areNon-Executive Directors.
Purpose
Nielsen’s Compensation Policy for ourNon-Executive Directors is designed to:
2018 PROXY STATEMENT B-8 |
DIRECTORS’ COMPENSATION POLICY |
Practice
The Compensation Committee reviews theNon-Executive Director compensation program annually taking account of market benchmarking data to establish compensation levels that are competitive and serve the stated purpose. Market adjustments may be made toNon-Executive Director compensation following these reviews. Otherwise, the Compensation Committee generally intends to make adjustments every three years unless special circumstances require otherwise. The values quoted in each category are fixed, do not vary subject to a performance condition and therefore represent the current maximum payout opportunity.
Compensation Element | ||||
How Component Operates | Current Fee Structure (per annum) | |||
Board Fees | ||||
• Annual retainer paid on a quarterly basis • Director may elect to receive fees in cash or in DSUs1 • DSUs accrue dividend equivalents in the form of additional DSUs | $80,000 | |||
Board Chair Fee | ||||
• Annual retainer payable on a quarterly basis; 50% in DSUs and 50% in cash • Director may elect to receive cash fees in DSUs1 • DSUs accrue dividend equivalents in the form of additional DSUs | $150,000 | |||
Committee Chair Fees | ||||
• Annual retainer payable on a quarterly basis • Director may elect to receive fees in cash or in DSUs1 • DSUs accrue dividend equivalents in the form of additional DSUs | • Audit Committee: $25,000 • Compensation Committee: $20,000 • Nomination and Corporate Governance Committee: $15,000 | |||
Lead Independent Director Fee | ||||
• Annual retainer payable on a quarterly basis • Director may elect to receive fees in cash or in DSUs1 • DSUs accrue dividend equivalents in the form of additional DSUs | $30,000 | |||
Annual Equity Grant | ||||
• Executive compensation peer group plus general industry benchmark provided by Meridian are used as benchmarks • Annual equity grant delivered in DSUs vests in four equal quarterly installments • DSUs accrue dividend equivalents in the form of additional DSUs | $160,000 |
Non-Executive Directors will only receive compensation for those services outlined in this Policy. There are no contracts or agreements that provide guaranteed amounts payable for service as a Non-Executive Director of Nielsen, and there are no similar arrangements that provide for any guaranteed compensation (other than for any accrued or deferred amounts, if applicable, for services rendered as a Non-Executive Director) upon a Non-Executive Director’s termination of service from our Board of Directors. The Compensation Committee may in exceptional circumstances provide compensation that exceeds or is different from that payable to Non-Executive Directors but is aligned with the policy for Executive Directors. An example may include when an Executive Director transitions from Company employee to Non-Executive Director. In these cases, the Committee may find it appropriate to elect to continue components of the Executive Director compensation program for the former employee. When recruiting for a new external Non-Executive Director, the Committee or Board will structure pay in line with the existing policy for Non-Executive Directors set out above.
| ||||
Constant Currency Presentation
We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is anon-GAAP financial measure, excludes the impact of period-over-period fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our results of operations, thereby facilitatingperiod-to-period comparisons of our business performance and is consistent with how management evaluates the Company’s performance. We calculate constant currency percentages by converting our prior-period local currency financial results using the current period exchange rates and comparing these adjusted amounts to our current period reported results. No adjustment has been made to foreign currency exchange transaction gains or losses in the calculation of constant currency net income. This calculation may differ from similarly-titled measures used by others and, accordingly, the constant currency presentation is not meant to be a substitution for recorded amounts presented in conformity with GAAP nor should such amounts be considered in isolation.
The below table presents a reconciliation from revenue on a reported basis to revenue on a constant currency basis for the year December 31, 2017.
(IN MILLIONS) (UNAUDITED)
| Year Ended December 31, 2017 Reported
| Year Ended
| % Variance
|
Year Ended
| % Variance
| |||||||||||||||
Revenues by segment | ||||||||||||||||||||
Developed Markets |
|
$1,999 |
|
|
$2,096 |
|
|
(4.6)% |
|
|
$2,108 |
|
|
(5.2)% |
| |||||
Emerging Markets |
|
1,164 |
|
|
1,063 |
|
|
9.5% |
|
|
1,070 |
|
|
8.8% |
| |||||
Core Buy |
|
$3,163 |
|
|
$3,159 |
|
|
0.1% |
|
|
$3,178 |
|
|
(0.5)% |
| |||||
Corporate |
|
$ 68 |
|
|
$ 163 |
|
|
(58.3)% |
|
|
$ 163 |
|
|
(58.3)% |
| |||||
Buy |
|
$3,231 |
|
|
$3,322 |
|
|
(2.7)% |
|
|
$3,341 |
|
|
(3.3)% |
| |||||
Audience Measurement (Video and Text) |
|
$2,308 |
|
|
$1,978 |
|
|
16.7% |
|
|
$1,984 |
|
|
16.3% |
| |||||
Audio |
|
501 |
|
|
500 |
|
|
0.2% |
|
|
500 |
|
|
0.2% |
| |||||
Marketing Effectiveness |
|
350 |
|
|
287 |
|
|
22.0% |
|
|
289 |
|
|
21.1% |
| |||||
Core Watch |
|
$3,159 |
|
|
$2,765 |
|
|
14.2% |
|
|
$2,773 |
|
|
13.9% |
| |||||
Corporate/Other Watch |
|
182 |
|
|
222 |
|
|
(18.0)% |
|
|
218 |
|
|
(16.5)% |
| |||||
Watch |
|
$3,341 |
|
|
$2,987 |
|
|
11.9% |
|
|
$2,991 |
|
|
11.7% |
| |||||
Total Core Buy and Watch |
|
$6,322 |
|
|
$5,924 |
|
|
6.7% |
|
|
$5,951 |
|
|
6.2% |
| |||||
Total |
|
$6,572 |
|
|
$6,309 |
|
|
4.2% |
|
|
$6,332 |
|
|
3.8% |
|
Net Income to Adjusted EBITDA Reconciliation
We define Adjusted EBITDA as net income or loss from our consolidated statements of operations before interest income and expense, income taxes, depreciation and amortization, restructuring charges, stock-based compensation expense and othernon-operating items from our consolidated statements of operations as well as certain other items considered outside the normal course of our operations specifically described below.
Restructuring charges: We exclude restructuring expenses, which primarily include employee severance, office consolidation and contract termination charges, from our Adjusted EBITDA to allow more accurate comparisons of the financial results to historical operations and forward-looking guidance. By excluding these expenses from
2018 PROXY STATEMENT C-1 |
ANNEX A—MERGER PROPOSAL
ournon-GAAP measures, we are better able to evaluate our ability to utilize our existing assets and estimate the long-term value these assets will generate for us. Furthermore, we believe that the adjustments of these items more closely correlate with the sustainability of our operating performance.
Stock-based compensation expense: We exclude the impact of costs relating to stock-based compensation. Due to the subjective assumptions and a variety of award types, we believe that the exclusion of stock-based compensation expense, which is typicallynon-cash, allows for more meaningful comparisons of our operating results to peer companies. Stock-based compensation expense can vary significantly based on the timing, size and nature of awards granted.
Othernon-operating (expense)/income, net: We exclude foreign currency exchange transaction gains and losses primarily related to intercompany financing arrangements as well as othernon-operating income and expense items, such as gains and losses recorded on business combinations or dispositions, sales of investments, net income attributable to noncontrolling interests and early redemption payments made in connection with debt refinancing. We believe that the adjustments of these items more closely correlate with the sustainability of our operating performance.
Other items: To measure operating performance, we exclude certain expenses and gains that arise outside the ordinary course of our operations. Such costs primarily include legal settlements, acquisition related expenses, business optimization costs and other transactional costs. We believe the exclusion of such amounts allows management and the users of the financial statements to better understand our financial results.
Adjusted EBITDA is not a presentation made in accordance with GAAP, and our use of the term Adjusted EBITDA may vary from the use of similarly-titled measures by others in our industry due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation.
We use Adjusted EBITDA to measure our performance from period to period both at the consolidated level as well as within our operating segments, to evaluate and fund incentive compensation programs and to compare our results to those of our competitors. In addition to Adjusted EBITDA being a significant measure of performance for management purposes, we also believe that this presentation provides useful information to investors regarding financial and business trends related to our results of operations and that whennon-GAAP financial information is viewed with GAAP financial information, investors are provided with a more meaningful understanding of our ongoing operating performance.
Adjusted EBITDA should not be considered as an alternative to net income or loss, operating income, cash flows from operating activities or any other performance measures derived in accordance with GAAP as measures of operating performance or cash flows as measures of liquidity. Adjusted EBITDA has important limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.
| ||||
INFORMATION REGARDING NON-GAAP FINANCIAL MEASURES |
ANNEX A – Merger Proposal
The below table presents a reconciliation from net income to Adjusted EBITDA for the years ended December 31, 2017, 2016 and 2015:
Year Ended December 31, | ||||||||||||
(IN MILLIONS) |
2017 |
2016 |
2015 | |||||||||
Net income attributable to Nielsen stockholders |
$ |
429 |
|
$ |
502 |
|
$ |
570 |
| |||
Interest expense, net |
|
370 |
|
|
329 |
|
|
307 |
| |||
Provision for income taxes |
|
388 |
|
|
309 |
|
|
383 |
| |||
Depreciation and amortization |
|
640 |
|
|
603 |
|
|
574 |
| |||
EBITDA |
|
1,827 |
|
|
1,743 |
|
|
1,834 |
| |||
Equity in net loss of affiliates |
|
— |
|
|
— |
|
|
3 |
| |||
Othernon-operating expense/(income), net |
|
38 |
|
|
3 |
|
|
(170 |
) | |||
Restructuring charges |
|
80 |
|
|
105 |
|
|
51 |
| |||
Stock-based compensation expense |
|
45 |
|
|
51 |
|
|
48 |
| |||
Other items(a) |
|
45 |
|
|
36 |
|
|
92 |
| |||
Adjusted EBITDA |
$ |
2,035 |
|
$ |
1,938 |
|
|
$1,858 |
|
(a) | For the year ended December 31, 2017, other items primarily consisted of transaction related costs and business optimization costs. For the year ended December 31, 2016, other items primarily consisted of business optimization costs. For the year ended December 31, 2015, other items primarily consisted of a $36 million donation to the Nielsen Foundation, a $14 million charge for the partial settlement of certain U.S. pension plan participants and business optimization costs. |
PART 1Net Income and Adjusted EBITDA on constant currency basis
The table below presents a reconciliation of Net income and Adjusted EBITDA on a reported basis to a constant currency basis for the year ended December 31, 2017.
(IN MILLIONS) (UNAUDITED)
| Year Ended
| Year Ended
| % Variance
|
Year Ended
| % Variance
| |||||||||||||||
Net Income attributable to Nielsen Stockholders |
|
$ 429 |
|
|
$ 502 |
|
|
(14.5)% |
|
|
$ 512 |
|
|
(16.2)% |
| |||||
Adjusted EBITDA |
|
$2,035 |
|
|
$1,938 |
|
|
5.0% |
|
|
$1,951 |
|
|
4.3% |
|
INTERPRETATION AND LIMITATION OF LIABILITYFree cash flow
1. Defined TermsWe define free cash flow as net cash provided by operating activities, less capital expenditures, net. We believe providing free cash flow information provides valuable supplemental liquidity information regarding the cash flow that may be available for discretionary use by us in areas such as the distributions of dividends, repurchase of common stock, voluntary repayment of debt obligations or to fund our strategic initiatives, including acquisitions, if any. However, free cash flow does not represent residual cash flows entirely available for discretionary purposes; for example, the repayment of principal amounts borrowed is not deducted from free cash flow. Key limitations of the free cash flow measure include the assumptions that we will be able to refinance our existing debt when it matures and meet other cash flow obligations from financing activities, such as principal payments on debt. Free cash flow is not a presentation made in accordance with GAAP.
2018 PROXY STATEMENT C-3 |
INFORMATION REGARDING NON-GAAP FINANCIAL MEASURES | ||||
ANNEX A – Merger Proposal
Normalized Cash Flow
The reconciliation of normalized free cash flow to net cash provided by operating activities in the last three years is provided below:
Free Cash Flow1 ($ in millions – as reported) |
2017 |
2016 |
2015 | |||||||||
Net cash provided by operating activities |
$ |
1,310 |
|
$ |
1,296 |
|
$ |
1,209 |
| |||
Capital expenditures, net |
|
(447 |
) |
|
(391 |
) |
|
(401 |
) | |||
Free Cash Flow |
$ |
863 |
|
$ |
905 |
|
$ |
808 |
| |||
Non-recurring contribution to the Nielsen Foundation |
|
— |
|
|
36 |
|
|
— |
| |||
Normalized Free Cash Flow |
$ |
863 |
|
$ |
941 |
|
$ |
808 |
|
1 |
Measures Excluding Impact of Enactment of Tax Cuts and Jobs Act (“TCJA”)
During the fourth quarter of 2017, the Company recorded a provisionalnon-cash tax charge of $104 million, or $0.29 per share related to the enactment of the TCJA. The provisional tax charge was incurred as a result of the TCJA and includes aone-time repatriation tax. This provisional amount is subject to adjustment during a measurement period of one year following the enactment of TCJA, as provided by recent SEC guidance. Net income, net income per share on a diluted basis, provision for income taxes and the effective tax rate are all measures for which Nielsen provides the reported GAAP measure and an adjusted measure. The adjusted measures are not in accordance with, nor are they a substitute for, GAAP measures. The Company considered thesenon-GAAP measures in evaluating and managing the Company’s operations and believes that discussion of results adjusted for this item is meaningful to investors as it provides useful analysis of ongoing underlying operating trends. The determination of this item may not be comparable to similarly titled measures used by other companies.
The below tables present a reconciliation of net income attributable to Nielsen stockholders, net income per share of common stock on diluted basis, provision for income taxes, and the effective tax rate to theNon-GAAP measures adjusted to exclude the impact of the enactment of the TCJA, for the year ended December 31, 2017 and 2016.
(IN MILLIONS) (UNAUDITED)
|
Year Ended
|
Year Ended
|
Adjustment
|
Adjusted
| ||||||||||||
Operating incomes |
|
$ 1,143 |
|
|
$ 1,225 |
|
|
$ — |
|
|
$ 1,225 |
| ||||
Income from continuing operations before taxes |
|
$ 816 |
|
|
$ 828 |
|
|
$ — |
|
|
$ 828 |
| ||||
Provision for income taxes |
|
$ 309 |
|
|
$ 388 |
|
|
$(104 |
) |
|
$ 284 |
| ||||
Effective tax rate |
|
37.9% |
|
|
46.9% |
|
|
34.3% |
| |||||||
Net income attributable to Nielsen stockholders |
|
$ 502 |
|
|
$ 429 |
|
|
$ 104 |
|
|
$ 533 |
| ||||
Net income per share of common stock, diluted |
|
$ 1.39 |
|
|
$ 1.20 |
|
|
0.29 |
|
|
$ 1.49 |
| ||||
Net income per share of common stock, diluted percent change |
|
(13.7)% |
|
|
$ |
|
|
7.2% |
|
|
NIELSEN HOLDINGS PLC 40 DANBURY ROAD WILTON, CT 06897-4445 | VOTE BY INTERNET |
ANNEX A – Merger Proposal
2. Model Articles or Regulations Not to Apply
No model articles or regulations contained in any statute or subordinate legislation, including those contained in the Model Articles, apply as the articles of association of the Company.
3. Liability of Members
The liability of the members is limited to the amount, if any, unpaid on the shares held by them.
PART 2 DIRECTORS
DIRECTORS’ POWERS AND RESPONSIBILITIES
4. Directors’ General Authority
Before The Meeting - Go towww.proxyvote.com or from a mobile phone scan the QR code above. |
ANNEX A – Merger Proposal
5. Members’ Reserve Power
6. Borrowing Powers
The directors may exercise all the powers of the Company to borrow money and to mortgage or charge all or part of the undertaking, property and assets (present or future) and uncalled capital of the Company and, subject to the Act, to issue debentures and other securities, whether outright or as collateral security for a debt, liability or obligation of the Company or of a third party.
7. Directors May Delegate
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. (Eastern Time) on May 21, 2018 (May 17, 2018 for 401(k) plan shareholders). 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. |
ANNEX A – Merger Proposal
8. Committees
DECISION-MAKING BY DIRECTORS
9. Directors to Take Decisions Collectively
10. Calling a Directors’ Meeting
11. Participation in Directors’ Meetings
12. Quorum for Directors’ Meetings
ANNEX A – Merger Proposal
13. Meetings Where Total Number of Directors Less Than Quorum
14. Chairing Directors’ Meetings
15. Voting at Directors’ Meetings: General Rules
DIRECTORS’ INTERESTS
16. Directors’ Interests
A director shall be authorised for the purposes of section 175 of the Act to act or continue to act as a director of the Company notwithstanding that at the time of his appointment or subsequently he also holds office as a director of, or holds any other office, employment or engagement with, any other member of the Group.
17. Directors’ Interests Other Than in Relation to Transactions or Arrangements With the Company
18. Confidential Information and Attendance at Directors’ Meetings
ANNEX A – Merger Proposal
19. Declaration of Interests in Proposed or Existing Transactions or Arrangements With the Company
ANNEX A – Merger Proposal
20. Ability to Enter Into Transactions And Arrangements With the Company Notwithstanding Interest
21. Remuneration and Benefits
22. General Voting and Quorum Requirements
ANNEX A – Merger Proposal
23. Proposing Directors’ Written Resolutions
ANNEX A – Merger Proposal
24. Adoption of Directors’ Written Resolutions
25. Directors’ Discretion to Make Further Rules
Subject to the articles, the directors may make any rule which they think fit about how they take decisions, and about how such rules are to be recorded or communicated to directors.
APPOINTMENT OF DIRECTORS
26. Number of Directors
27. Methods of Appointing Directors
ANNEX A – Merger Proposal
28. Termination of Director’s Appointment
ANNEX A – Merger Proposal
29. Directors’ Fees
30. Directors’ Additional Remuneration
ANNEX A – Merger Proposal
31. Directors’ Pensions and Other Benefits
32. Remuneration of Executive Directors
33. Directors’ Expenses
ANNEX A – Merger Proposal
PART 3
DECISION-MAKING BYMEMBERS-
ORGANISATION OF GENERAL MEETINGS
34. Annual General Meetings
35. Calling General Meetings
36. Notice of General Meetings
ANNEX A – Merger Proposal
37. Attendance and Speaking at General Meetings
38. Meeting Security
ANNEX A – Merger Proposal
39. Quorum for General Meetings
40. Chairing General Meetings
41. Conduct of Meeting
ANNEX A – Merger Proposal
42. Attendance and Speaking by Directors andNon-Members
43. Dissolution and Adjournment if Quorum Not Present
44. Adjournment if Quorum Present
ANNEX A – Merger Proposal
45. Notice of Adjourned Meeting
46. Business at Adjourned Meeting
VOTING AT GENERAL MEETINGS
47. Voting: General
48. Errors and Disputes
ANNEX A – Merger Proposal
49. Procedure on a Poll
50. Appointment of Proxy
51. Content of Proxy Notices
ANNEX A – Merger Proposal
52. Delivery of Proxy Notices
53. Corporate Representatives
54. Termination of Authority
ANNEX A – Merger Proposal
55. Amendments to Resolutions
RESTRICTIONS ON MEMBERS’ RIGHTS
56. No Voting of Shares on Which Money Owed to Company
Unless the directors decide otherwise, no voting rights (or other rights conferred by membership in relation to a meeting) attached to a share may be exercised at any general meeting or at any adjournment of it unless all amounts payable to the Company in respect of that share have been paid.
APPLICATION OF RULES TO CLASS MEETINGS AND RIGHTS
57. Variation of Class Rights
ANNEX A – Merger Proposal
58. Failure to Disclose Interests in Shares
ANNEX A – Merger Proposal
PART 4
SHARES AND DISTRIBUTIONS
ISSUE OF SHARES
59. Allotment
ANNEX A – Merger Proposal
60. Powers to Issue Different Classes of Share
61. Rights and Restrictions Attaching to Shares
Ordinary Shares
Dividend
Return of capital
Votes
Pre-emption right
ANNEX A – Merger Proposal
Sterling Non-Voting Shares
Dividend
Return of capital
Votes
Transfer
Redemption or repurchase
Rights and restrictions
62. Sterling Shareholder
ANNEX A – Merger Proposal
in respect of anything done or omitted to be done by it in its capacity as the Sterling Shareholder otherwise than by reason of its own fraud, negligence or wilful default.
63. Payment of Commissions on Subscription for Shares
64. Purchase of Own Shares
INTERESTS IN SHARES
65. Company Not Bound by Less than Absolute Interests
Except as required by law or the articles, no person is to be recognised by the Company as holding any share upon any trust and the Company is not in any way to be bound by or recognise any interest in a share other than the holder’s absolute ownership of it and all the rights attaching to it.
SHARE CERTIFICATES
66. Certificates to be issued except in certain cases
ANNEX A – Merger Proposal
67. Contents and Execution of Certificates
68. Consolidated Certificates
were, immediately before the reduction, represented by the same certificate.
69. Replacement Certificates
that member is entitled to be issued with a replacement certificate in respect of the same shares.
ANNEX A – Merger Proposal
PARTLY PAID SHARES
70. Company’s Lien Over Partly Paid Shares
which has not been paid to the Company, and which is payable immediately or at some time in the future, whether or not a call notice has been sent in respect of it.
71. Enforcement of the Company’s Lien
the Company may sell that share in such manner as the directors decide.
ANNEX A – Merger Proposal
72. Call Notices for Partly Paid Shares
by a further notice in writing to the member in respect of whose shares the call is made.
73. Liability to Pay Calls for Partly Paid Shares
74. When Call Notice for Partly Paid Shares Need not be Issued
ANNEX A – Merger Proposal
each a “due date for payment”.
75. Failure to Comply with Call Notice: Automatic Consequences
76. Payment of Uncalled Amount in Advance
77. Notice of Intended Forfeiture
ANNEX A – Merger Proposal
78. Directors’ Power to Forfeit Shares
If a notice of intended forfeiture is not complied with before the date by which payment (including interest, costs, charges and expenses) of the call is required in the notice of intended forfeiture, the directors may decide that any share in respect of which it was given is forfeited, and the forfeiture is to include all dividends or other moneys payable in respect of the forfeited shares and not paid before the forfeiture.
79. Effect of Forfeiture
80. Procedure Following Forfeiture
ANNEX A – Merger Proposal
but no interest is payable to such a person in respect of such proceeds and the Company is not required to account for any money earned on them.
81. Surrender of Shares
UNTRACED SHAREHOLDERS
82. Power of Sale
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ANNEX A – Merger Proposal
83. Application of Proceeds of Sale
TRANSFERS AND TRANSMISSION OF SHARES
84. Transfers of Shares
85. Transmission of Shares
ANNEX A – Merger Proposal
86. Transmittees’ Rights
87. Exercise of Transmittees’ Rights
88. Transmittees Bound by Prior Notices
CONSOLIDATION/DIVISION OF SHARES
89. Procedure for Disposing of Fractions of Shares
ANNEX A – Merger Proposal
DISTRIBUTIONS
90. Procedure for Declaring Dividends
ANNEX A – Merger Proposal
92. Payment of Dividends and Other Distributions
ANNEX A – Merger Proposal
93. Deductions from Distributions in Respect of Sums Owed to the Company
94. No Interest on Distributions
95. Unclaimed Distributions
ANNEX A – Merger Proposal
96.Non-cash Distributions
97. Waiver of Distributions
98. Scrip Dividends
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ANNEX A – Merger Proposal
ANNEX A – Merger Proposal
CAPITALISATION OF PROFITS AND RESERVES
99. Authority to Capitalise and Appropriation of Capitalised Sums
100. Record Dates
ANNEX A – Merger Proposal
PART 5- MISCELLANEOUS PROVISIONS
COMMUNICATIONS
101. Means of Communication to be Used
ANNEX A – Merger Proposal
102. Loss of Entitlement to Notices
ADMINISTRATIVE ARRANGEMENTS
103. Secretary
ANNEX A – Merger Proposal
104. Change of Name
The directors may change the name of the Company.
105. Authentication of Documents
106. Company Seals
107. Records of Proceedings
ANNEX A – Merger Proposal
108. Destruction of Documents
109. Accounts
ANNEX A – Merger Proposal
110. Provision for Employees on Cessation of Business
The directors may decide to make provision for the benefit of persons (other than a director or former director or shadow director) employed or formerly employed by the Company or any of its subsidiary undertakings (or any member of his family, including a spouse or former spouse, or any person who is or was dependent on him) in connection with the cessation or transfer to any person of the whole or part of the undertaking of the Company or that subsidiary undertaking.
111. Winding up of the Company
DIRECTORS’ INDEMNITY AND INSURANCE
112. Indemnity of Officers and Funding Directors’ Defence Costs
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ANNEX A – Merger Proposal
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ANNEX A – Merger Proposal
113. Insurance
ANNEX A – Merger Proposal
SCHEDULE 4
PROPOSED ARTICLES OF ASSOCIATION OF NIELSEN N.V.
ANNEX A – Merger Proposal
SCHEDULE 5
WITHDRAWAL APPLICATION FORM
ANNEX A – Merger Proposal
SCHEDULE 6
MERGER ACCOUNTS
NIELSEN N.V.
40 DANBURY ROAD
WILTON, CT 06897-4445
VOTE BY INTERNET
Before The Meeting - Go towww.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 25, 2015 (June 23, 2015 for 401(k) plan shareholders). 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.
During The Meeting- Go towww.virtualshareholdermeeting.com/NLSNnielsen.onlineshareholdermeeting.com
You may attend the Meeting via the Internet and vote during the Meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903
VOTE BY MAIL
ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E41504-P02002 KEEP THIS PORTION FOR YOUR RECORDS —————————————————————————————————————————————————————————— | |||||||||||||||||||||
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | DETACH AND RETURN THIS PORTION ONLY | ||||||||||||||||||||
NIELSEN HOLDINGS PLC | ||||||||||
Our Board of Directors recommends that you vote “FOR”each director nominee listed below and “FOR” each of Proposals 2 through 7 listed below. | ||||||||||
1. | Election of directors: | For | Against | Abstain | ||||||
1a. | James A. Attwood, Jr. | ☐ | ☐ | ☐ | ||||||
1b. | Mitch Barns | ☐ | ☐ | ☐ | ||||||
1c. | Guerrino De Luca | ☐ | ☐ | ☐ | ||||||
1d. | Karen M. Hoguet | ☐ | ☐ | ☐ | ||||||
1e. | Harish Manwani | ☐ | ☐ | ☐ | ||||||
1f. | Robert C. Pozen | ☐ | ☐ | ☐ | ||||||
1g. | David Rawlinson | ☐ | ☐ | ☐ | ||||||
1h. | Javier G. Teruel | ☐ | ☐ | ☐ | ||||||
1i. | Lauren Zalaznick | ☐ | ☐ | ☐ | ||||||
Please indicate if you plan to attend the meeting. | ☐ | ☐ | ||||||||
Yes | No |
For | Against | Abstain | ||||||||||||
2. | To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2018. | ☐ | ☐ | ☐ | ||||||||||
3. | To reappoint Ernst & Young LLP as our UK statutory auditor to audit our UK statutory annual accounts for the year ending December 31, 2018. | ☐ | ☐ | ☐ | ||||||||||
4. | To authorize the Audit Committee to determine the compensation of our UK statutory auditor. | ☐ | ☐ | ☐ | ||||||||||
5. | To approve on a non-binding, advisory basis the compensation of our named executive officers as disclosed in the proxy statement. | ☐ | ☐ | ☐ | ||||||||||
6. | To approve on a non-binding, advisory basis the Directors’ Compensation Report for the year ended December 31, 2017. | ☐ | ☐ | ☐ | ||||||||||
7. | To approve the Directors’ Compensation Policy. | ☐ | ☐ | ☐ | ||||||||||
NOTE: Such other business as may properly come before the meeting or any adjournment or postponement thereof. |
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 |
NIELSEN HOLDINGS PLC
2018 Annual General Meeting of Shareholders
May 22, 2018
9:00 a.m. (Eastern Time) at 50 Danbury Road, Wilton, CT 06897
or to attend the virtual meeting live via the Internet, please visit
nielsen.onlineshareholdermeeting.com
ADMISSION TICKET
You should present this admission ticket in order to gain admittance to the meeting. This ticket admits only the shareholder(s) listed on the reverse side and is not transferable. Each shareholder may be asked to present valid picture identification, such as a driver’s license. Cameras, videotaping equipment and other recording devices and large packages, banners, placards and signs will not be permitted at the meeting. |
If you submit your proxy by telephone or Internet, do not return your proxy card.
Thank you for your proxy submission.
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NIELSEN N.V.
Annual Meeting of Shareholders
June 26, 2015
9:00 a.m. (Eastern Time)
www.virtualshareholdermeeting.com/NLSN
or
The offices of Clifford Chance LLP
Droogbak 1A
Amsterdam, the Netherlands
DIRECTIONS: Please visitwww.cliffordchance.com or call their offices in Amsterdam, the Netherlands at 31-20-711-9000.
Important Notice Regarding the Availability of Proxy Materials for the Annual General Meeting:
The Notice and Proxy Statement, the US Annual Report and the UK Annual Report are available atwww.proxyvote.comwww.proxyvote.com.. You will need the16-digit control number included on this proxy card in order to access the proxy materials onwww.proxyvote.com.
M54179-P32744
NIELSEN N.V.
Annual Meeting of Shareholders
June 26, 2015 9:00 AM (Eastern Time)
This proxy is solicited by the Board of Directors
The undersigned shareholder(s) of Nielsen N.V. hereby revoke(s) all proxies heretofore given by the signer(s) to vote at the Annual Meeting of Shareholders and any adjournments or postponements thereof, acknowledges receipt of the Proxy Statement, dated May 21, 2015, and appoint(s) Dwight M. Barns, Jamere Jackson, James W. Cuminale and Harris Black, and each of them, as the undersigned’s true and lawful proxies, each with the power to appoint his substitute(s), and hereby authorize(s) them to represent and to vote all of the shares of NIELSEN N.V. that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders to be held at 9:00 a.m. (Eastern Time) on June 26, 2015, and at any adjournment or postponement thereof, upon all subjects that may properly come before the annual
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E41505-P02002
NIELSEN HOLDINGS PLC
Annual General Meeting of Shareholders
May 22, 2018 9:00 AM (Eastern Time)
This proxy is solicited on behalf of the Board of Directors
The undersigned shareholder(s) of Nielsen Holdings plc hereby: revoke(s) all proxies heretofore given by the signer(s) to vote at the Annual General Meeting of Shareholders and any adjournments or postponements thereof; acknowledges receipt of the Notice of the Annual General Meeting of Shareholders of Nielsen Holdings plc and related Proxy Statement, dated April 9, 2018; and appoint(s) Mitch Barns, Jamere Jackson, Eric J. Dale and Emily Epstein, and each of them, as the undersigned’s true and lawful proxies, each with the power to appoint his or her substitute(s), and hereby authorize(s) them to represent and to vote all of the shares of Nielsen Holdings plc that the shareholder(s) is/are entitled to vote at the Annual General Meeting of Shareholders to be held at 9:00 a.m. (Eastern Time) on May 22, 2018, and at any adjournment or postponement thereof, upon all subjects that may properly come before such meeting, including the matters described in the proxy statement furnished with this proxy card, subject to the directions indicated on the reverse side of this card, with all the power the undersigned would possess if personally present.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER(S) ON THE REVERSE SIDE OF THIS PROXY CARD. IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED “FOR” THE APPROVAL OF PROPOSALS 1 THROUGH 9, WHICH PROPOSALS ARE LISTED ON THE REVERSE SIDE OF THIS PROXY CARD. IF THE PROXY CARD IS SIGNED BUT NO DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES IN PROPOSAL 1, “FOR” PROPOSALS 2 THROUGH 7 AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
CONTINUED AND TO BE DATED AND SIGNED ON REVERSE SIDE