As filed with the Securities and Exchange Commission on July 31, 2012February 27, 2020
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
(RULE14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
SECURITIES EXCHANGE ACT OF 1934
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☒ | Preliminary Proxy Statement |
☐ | Confidential, For Use of the Commission Only (as permitted by Rule14a-6(e)(2)) |
☐ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant toSection 240.14a-12 |
GLOBAL PAYMENTS INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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GLOBAL PAYMENTS INC.
10 GLENLAKE PARKWAY, NORTH TOWER
PROXY STATEMENT AND NOTICE OF
2020 ANNUAL MEETING OF SHAREHOLDERS
April 29, 2020
3550 Lenox Road
Atlanta, Georgia 30326
(770)ATLANTA, GEORGIA 30328829-8000
March , 2020
Dear Shareholder:
The board of directors and officers of Global Payments Inc. join me in extending to you a cordial invitation to attend our 2020 Annual Meeting of Shareholders. The meeting will be held on Wednesday, April 29, 2020, at 9:30 a.m. Eastern Daylight Time, at our offices at 3550 Lenox Road, Atlanta, GA 30326. At the annual meeting, shareholders will be asked to vote on four proposals set forth in the Notice of 2020 Annual Meeting of Shareholders and the proxy statement following this letter.
In the third quarter of 2019, we completed our merger with Total System Services, Inc., bringing together two industry leaders and positioning the new Global Payments as a premier pure play payments technology company at scale globally. Importantly, the merger accelerates our technology-enabled software-driven strategy, establishing Global Payments as a leading provider of integrated payment solutions, owned software in both merchant and issuing, ande-commerce and omni-channel capabilities. We are pleased to welcome the former shareholders of TSYS to our company and look forward to engaging with you.
Whether or not you plan to attend the annual meeting, it is important that your shares are represented and voted regardless of the size of your holdings. We urge you to vote promptly and submit your proxy via the internet, by telephone or by signing, dating and returning the enclosed proxy card in the enclosed envelope. If you decide to attend the annual meeting, you will be able to vote in person, even if you have submitted your proxy previously.
If you have any questions concerning the annual meeting and you are the shareholder of record of your shares, please contact our Investor Relations department at Investor.Relations@globalpay.com or (770)829-8478. If your shares are held by a broker or other nominee (that is, in “street name”), please contact your broker or other nominee for questions concerning the annual meeting.
We look forward to seeing you on April 29.
Sincerely, | ||
Jeffrey S. Sloan | M. Troy Woods | |
Chief Executive Officer | Chairman of the Board |
NOTICE OF 20122020 ANNUAL MEETING OF SHAREHOLDERS
The 2012 annual meeting
April 29, 2020 9:30 a.m. Eastern Daylight Time | 3550 Lenox Road Atlanta, Georgia 30326 |
Items of shareholders (the “Annual Meeting”) of Global Payments Inc., or the Company, will be held at our offices at 10 Glenlake Parkway, North Tower, Atlanta, Georgia, 30328-3473 on September 19, 2012, at 11:00 a.m., Atlanta time, for the following purposes:Business
1. | To elect |
2. | To approve, on an advisory basis, the compensation of our named executive |
3. | To approve amendments to our articles of incorporation to eliminate the |
4. | To ratify the reappointment of Deloitte & Touche LLP, or Deloitte, as the Company’s independent public |
The shareholders may also transact any other business that may properly come before the Annual Meetingannual meeting or any adjournments or postponements thereof.
Record Date
Close of business on March 6, 2020.
On March , 2020, we mailed a notice of electronic availability of proxy materials to our shareholders. Only shareholders of record at the close of business on August 1, 2012March 6, 2020 are entitled to receive notice of, and to vote at, the Annual Meetingannual meeting or any adjournment or postponement thereof. YouIf you do not attend the annual meeting, you may vote your shares via the Internetinternet or by telephone, as instructed in the Notice of Electronic Availability of Proxy Materials, or if you received your proxy materials by mail, you may also vote by mail.
YOUR VOTE IS IMPORTANT
Submitting your proxy does not affect your right to vote in person if you attend the Annual Meeting. Instead, it benefits us by reducing the expenses of additional proxy solicitation.annual meeting. Therefore, we urge you are urged to submit your proxy as soon as possible, regardless of whether or not you expect to attend the Annual Meeting.annual meeting. You may revoke your proxy at any time before its exercise by (i) delivering written notice of revocation to our Corporate Secretary, Suellyn P. Tornay,David L. Green, at the above address,3550 Lenox Road, Suite 3000, Atlanta, Georgia 30326, (ii) submitting to us a duly executed proxy card bearing a later date, (iii) voting via the Internetinternet or by telephone at a later date, or (iv) appearing at the Annual Meetingannual meeting and voting in person; provided, however, that no such revocation under clause (i) or (ii) shall be effective until written notice of revocation or a later dated proxy card is received by the Corporate Secretary at or before the Annual Meeting,annual meeting, and no such revocation under clause (iii) shall be effective unless received on or before 1:00 a.m.11:59 p.m., CentralEastern Daylight Time, on September 19, 2012.April 28, 2020.
When you submit your proxy, you authorize Paul R. Garcia or Suellyn P. TornayJeffrey S. Sloan and David L. Green, or either one of them, each with full power of substitution, to vote your shares at the Annual Meetingannual meeting in accordance with your instructions or, if no instructions are given, for the election of the Class III nominees,director nominees; for the approval, on an advisory basis, of the compensation of our named executive officers,officers; for the approvalamendment to our articles of the Second Amended and Restated Articles of Incorporation,incorporation; and for the ratification of the reappointment of Deloitte & Touche LLP (“Deloitte”) as the Company’s independent public accountants.accounting firm. The proxies, in their discretion, are further authorized to vote on any adjournments or postponements of the Annual Meeting,annual meeting, for the election of one or more persons to the Boardboard of Directorsdirectors if any of the nominees becomes unable to serve or for good cause will not serve, on matters which the Boardboard does not know a reasonable time before making the proxy solicitations will be presented at the Annual Meeting,annual meeting, or any other matters which may properly come before the Annual Meetingannual meeting and any postponements or adjournments thereto.
By Order of the Board of Directors,
SUELLYN P. TORNAY,
David L. Green
Senior Executive Vice President, General Counsel and Corporate Secretary
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Questions and Answers About Our Annual Meeting and this Proxy Statement | 10 | |||
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We provide below highlights of certain information in this Proxy Statement. As it is only a summary, please refer to the complete proxy statement and 2019 Annual Report before you vote.
2020 Annual Meeting of Shareholders
Date and Time: | Wednesday, April 29, 2020, at 9:30 a.m. Eastern Daylight Time | |
Place: | Our offices at 3550 Lenox Road, Atlanta, Georgia, 30326 | |
Record Date: | March 6, 2020 | |
Voting: | Holders of our common stock as of the close of business on the record date may vote at the annual meeting. Each shareholder is entitled to one vote per share for each director nominee and one vote per share for each of the other proposals described below. |
Proposals and Voting Recommendations
Proposal | Board Vote Recommendation | Page Number | |||||
1 – Election of Twelve Directors | FOR each nominee | 14 | |||||
2 – Advisory Vote on Compensation of Our Named Executive Officers | FOR | 35 | |||||
3 – Approval of Amendments to our Articles of Incorporation to Eliminate the Supermajority Voting Requirements | FOR | 67 | |||||
4 – Ratification of the Reappointment of Our Independent Public Accounting Firm | FOR | 69 |
Recent Developments
On September 18, 2019, we consummated our merger with Total System Services, Inc., or TSYS, pursuant to which TSYS merged with and into Global Payments, with Global Payments as the surviving company. The merger positions us as a leading pure play payments technology company providing innovative payments and software solutions to approximately 3.5 million merchant locations and over 1,300 financial institutions across more than 100 countries throughout North America, Europe, Asia Pacific and Latin America.
We seek to leverage the adoption of, and transition to, card, electronic and digital-based payments by expanding our share in our existing markets through our distribution channels and service innovation, as well as through acquisitions to improve our offerings and scale. We also seek to enter new markets through acquisitions, alliances and joint ventures around the world. We intend to continue to invest in and leverage our technology infrastructure and our people to increase our penetration in existing markets.
The key tenets of our strategy include the following:
Grow and control our direct distribution by adding new channels and partners, including expanding our ownership of additional enterprise software solutions with a payments overlay in select vertical markets;
Deliver innovative services by developing value-added applications, enhancing existing services and developing new systems and services to blend technology with customer needs;
Continue to develop seamless multinational solutions for leading global customers;
Leverage technology and operational advantages across our business segments and throughout our global footprint;
Provide customer service at levels that exceed our competition, while investing in technology, training and enhancements to our service offerings; and
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 1
Pursue potential domestic and international acquisitions of, investments in and alliances with companies that have high growth potential, significant market presence, sustainable distribution platforms and/or key technological capabilities.
We experienced strong business and financial performance around the world during the year ended December 31, 2019. Highlights related to our financial condition and results of operations as of December 31, 2019 and for the year then ended include the following:
Consolidated revenues were $4,911.9 million and $3,366.4 million for the years ended December 31, 2019 and 2018, respectively. Consolidated revenues increased by 45.9% from 2018 to 2019.
Consolidated operating income was $791.4 million for the year ended December 31, 2019 compared to $737.1 million for 2018. Our operating margin for the year ended December 31, 2019 was 16.1%, compared to 21.9% for the year ended December 31, 2018.
Net income attributable to Global Payments was $430.6 million for the year ended December 31, 2019 compared to $452.1 million for 2018, and diluted earnings per share was $2.16 for the year ended December 31, 2019 compared to $2.84 for 2018.
Over the12-month period from January 1, 2019 through December 31, 2019, our share price increased by approximately 78%, compared to an increase of approximately 28% in the S&P 500 index. Our share price from January 1, 2015 through December 31, 2019 relative to the performance of our peer group and the S&P 500 index, which we joined in April 2016, is shown in the graph below.
Total Shareholder Return vs. S&P 500 Index/Peer Company Average
2 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
Board and Corporate Governance Highlights
We have adopted leading governance practices that establish strong independent leadership in our boardroom and provide our shareholders with meaningful rights.
Corporate governance highlights include:
☑ | Lead Independent Director |
☑ | Eleven out of twelve directors arenon-employees |
☑ | Ten out of twelve directors are independent |
☑ | Five out of twelve directors are diverse in gender and/or ethnicity |
☑ | Annual election of directors |
☑ | Fully independent Audit, Compensation, and Governance and Nominating Committees |
☑ | Annual board and committee self-evaluations |
☑ | Proxy access for shareholders |
☑ | Majority voting for directors in uncontested elections |
☑ | Minimum stock ownership requirements for NEOs and directors (increased holding requirements for 2020) |
☑ | Limitations on outside board and audit committee service |
☑ | Greater than 75% director attendance at meetings |
☑ | Non-employee directors meet without management present |
☑ | Independent directors meet withoutnon-independent directors present |
☑ | Code of business conduct and ethics for directors |
The board has taken a thoughtful and deliberate approach to board composition to ensure that our directors have backgrounds that collectively add significant value to the strategic decisions made by the Company and enable them to provide oversight of management to ensure accountability to our shareholders. In connection with the merger with TSYS, we increased the size of our board to twelve directors, six of whom were individuals designated by Global Payments, consisting of five independent directors of Global Payments and our Chief Executive Officer, and the remaining six designated by TSYS, consisting of five independent directors and TSYS’ former Chief Executive Officer. The newly constituted board includes five members who are diverse in gender and/or ethnicity.
The composition of our board consists of:
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 3
The board has identified the following key qualifications and experience that are important to be represented on the board as a whole in light of our current business strategy and expected needs. The charts below indicate how these qualifications are represented on our board. Information regarding each director’s skills and qualifications can be found within their individual biographies on pages 15-20.
indicates board representation of the qualification |
We believe in providing transparent and timely information to our investors. Our senior management, including our Chief Executive Officer, President and Chief Operating Offer, and Chief Financial Officer, routinely provide information to and receive feedback from our investors in a wide variety of formats, including in our quarterly SEC filings, quarterly earnings conference calls, our Annual Report and proxy statement, regular investor conferences and roadshows, and meetings with individual investors. We have a staff of professionals in our Investor Relations department who are dedicated full time to respond to questions from shareholders and other investors about the Company and its performance.
4 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
2019 Outreach
During 2019, we held meetings with many of our top institutional investors, during which we discussed a variety of topics that are important to investors, including industry trends, environmental, social and governance, or ESG, matters, Company performance and operations, and short and long-term strategic direction.
In 2019, we also conducted an expansive shareholder outreach program to gauge support for our executive compensation practices and corporate governance policies and to respond to shareholder input. Accordingly, our management, together with the Chairman of our Compensation Committee, engaged with twenty of our top twenty-four shareholders, including both active and passive investors, representing approximately 65% of our total shares outstanding, on the Company’s executive compensation program. The feedback we received from shareholders regarding our executive compensation program was positive, and the vast majority of shareholders voted in favor of our program. After evaluating the outcome of the 2019 advisory vote, shareholder feedback and input from our independent compensation consultant, the Compensation Committee determined that our executive compensation programs are aligned with our compensation philosophy and the Company strategy and decided not to make any material changes to the structure or principles of the program. Importantly, the general shareholder feedback we received indicated that our investors did not have significant issues with either our executive compensation program or the compensation mix of our Chief Executive Officer or any of our other officers.
Recent Corporate Governance Developments
As a result of engaging with our shareholders and keeping abreast of leading practices, we have taken actions with respect to corporate governance matters, including the following:
Declassified our board and implemented annual election of directors.
Appointed a lead independent director of the board.
Established a number of diversity initiatives to increase representation of diverse individuals in the Company and support and elevate our diverse employees, and enhanced our proxy disclosure with respect to such practices.
Issued our Global Responsibility Report.
Proposing at this annual meeting the amendments to our Articles of Incorporation to eliminate the supermajority voting requirements.
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 5
Environmental Sustainability
We are committed to having a positive impact in the markets we serve and communities in which our employees live and work. In 2019, we issued our Global Responsibility Report, which details our recent achievements and initiatives to drive positive change across four pillars, Culture and Values, Environmental Sustainability, Community Impact and Corporate Responsibility. Our Global Responsibility Report (which is not incorporated into this proxy statement) can be found in the Investor Relations section of our website athttps://investors.globalpaymentsinc.com. The following are some highlights of our environmental sustainability program:
Focusing on the Environment:
Reducing Energy Usage: We are committed to enhancing energy efficiency across our facilities, including supporting renewable energy initiatives. It is our practice to procure new space in LEED or other green certified properties where possible. | ||
Managing Waste: We have implemented recycling initiatives to limit what we send to landfills and have a formal destruction of data policy to minimize e-waste. In all of our larger offices, our physical recycling policies extend to plastics and glass, and we are in the process of implementing a no Styrofoam initiative globally. | ||
Data Space Initiaties In the U.S., we are actively working to consolidate our data space footprint and are committed to evaluating the environmental impact and green efforts of the facilities where we lease storage capacity. Our largest data centers, which account for the majority of our domestic storage, have a number of green initiatives in place, including renewable power systems and rainwater harvesting and reclamation programs. We are also looking for new and innovative ways to reduce the impact our data has on the environment, which we are increasingly accomplishing through our move to the cloud. | ||
Providing Alternative Transportation: As part of our effort to reduce our carbon footprint, all of our U.S. and a majority of our international offices are located close to public transit. |
Our Company has always prided itself on inclusiveness and embraces the diversity of its employees in all of our geographic regions. We currently do business in over 100 countries in North America, Europe, the Asia-Pacific region and Latin America, with employees living and working in 38 different countries. We believe that our business is strengthened by a diverse workforce that reflects the communities in which we operate.
In 2018 and continuing in 2019, we built on our history of diversity and inclusion by formally launching a diversity and inclusion initiative, which included establishing a Diversity and Inclusion Advisory Council chaired by our President and Chief Operating Officer and consisting of a representative group of our employees. As part of this initiative, we became a signatory to the CEO Action for Diversity and Inclusion™, which is the largestCEO-driven business commitment to advance diversity and inclusion in the workplace.
6 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
In 2019, we took the following actions with respect to our diversity and inclusion practices:
• Expanded the Global Payments Women’s Network, an employee resource group which implements diversity initiatives related to women, including networking and training opportunities. • Launched the Global Payments Pride Network, an LGBTQIA employee resource group chaired by our General Counsel. | ||||
• Received a 100 percent score on the Human Rights Campaign Foundation’s 2019 Corporate Equality Index™,which is the national benchmarking tool on corporate policies and practices pertinent to the LGBTQIA employees. • Launched the Global Payments Veterans Network, chaired by our Chief Financial Officer, which is committed to increasing veteran inclusion and hiring, and provides volunteer opportunities for Company employees to support veteran-related organization and events. • Launched our Inclusion and Diversity speaker series as an information resource for all employees around the world. • Committed to providing unconscious bias training beginning in 2019 to all of our executives and people managers. • Developed a recruitment strategy with the goal of attracting employees of diverse backgrounds. |
In addition, we believe it is important that the makeup of our board reflects our commitment to diversity and inclusion and are proud that five of the twelve members of our board are diverse in gender or ethnicity. We will continue to measure our progress to ensure our initiatives and programs continue to support our diversity and inclusion goals.
We Do: | We Do Not: | |
☑ Tie pay to financial and share price performance ☑ Retain an independent compensation consultant ☑ Benchmark against our peer group ☑ Conduct an annualsay-on-pay vote ☑ Adjust performance goals under our short-term incentive plan to reflect acquisition impacts ☑ Require Compensation Committee certification of performance results for purposes of NEOs’ compensation ☑ Employ “double-trigger”change-in-control compensation ☑ Have a clawback policy ☑ Impose minimum stock ownership thresholds and holding periods until such thresholds are met | ☒ Provide for excise taxgross-ups ☒ Permit hedging or pledging of our stock ☒ Re-price or discount stock options or SARs ☒ Permit liberal share recycling or “net share counting” upon exercise of stock options or SARs ☒ Pay dividend equivalent rights on performance units |
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 7
Core Component | Objective Features | Page | ||||||
Base Salary | Base salaries are intended to provide compensation consistent with our named executive officers’, or NEOs, responsibilities, experience and performance in relation to the marketplace. | 44 | ||||||
Annual Cash Incentives | Our annual performance plan rewards short-term Company performance, while aligning the interests of our NEOs with those of our shareholders. For 2019, awards under our annual performance plan were determined based on specified goals for adjusted EPS, adjusted net revenue plus network fees and adjusted operating margin are described on Appendix A to this proxy statement. | 44 | ||||||
Performance Units | Performance units are performance-based restricted stock units that, after a three- year performance period, may convert into a number of unrestricted shares depending on the average of the growth of our annual adjusted EPS for each of the three years in the performance period. Performance units are earned based on an achievement of an annual adjusted EPS growth target, as modified by the Company’s total shareholder return performance rank relative to the S&P 500 index over the three-year performance period. | 47 | ||||||
Stock Options | Stock options vest in equal installments on each of the first three anniversaries of the grant date. Stock options are intended to provide a strong incentive for creation of long-term shareholder value, as stock options may be exercised for a profit only to the extent the price of our stock appreciates after the grant date. | 48 | ||||||
Restricted Stock | Restricted stock granted as part of our annual compensation program vests in equal installments on each of the first three anniversaries of the grant date. Time-based restricted stock provides a retentive element to our compensation program, while tying the value of the award to the performance of our stock. | 48 |
The following charts show the mix of total target compensation in 2019 (reflecting the new compensation targets for base salary and short-term cash incentive set upon completion of the merger with TSYS) for our Chief Executive Officer and the average of the other NEOs, as well as the portion of compensation that is subject to forfeiture (“at risk”) or performance-based.
CEO TOTAL TARGET COMPENSATION | OTHER NEOs TOTAL TARGET COMPENSATION* | |
* | Excludes Mr. Todd, who joined the Company on September 18, 2019. |
8 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
Name | Tenure | Principal Occupation | Non- Employee | Audit Committee | Compensation Committee | Governance and Nominating Committee | Technology Committee | |||||||
M. Troy Woods | 6 Months | Chairman of the Board | Yes | |||||||||||
Kriss Cloninger III | 6 Months | Former President, Aflac Inc. | Yes | |||||||||||
Jeffrey S. Sloan | 6 Years | Chief Executive Officer, Global Payments Inc. | No | |||||||||||
F. Thaddeus Arroyo | 6 Months | Chief Executive Officer, AT&T Consumer | Yes | |||||||||||
Robert H.B. Baldwin, Jr. | 4 Years | Former Vice Chairman, Heartland Payment Systems, Inc. | Yes | |||||||||||
John G. Bruno | 6 Years | Chief Operating Officer, Aon, plc | Yes | |||||||||||
William I Jacobs | 19 Years | Chairman and Interim CEO of Green Dot Corp. | Yes | |||||||||||
Joia M. Johnson | 6 Months | Chief Administrative Officer, Hanesbrands Inc. | Yes | |||||||||||
Ruth Ann Marshall | 14 Years | Former President of Americas, MasterCard International | Yes | |||||||||||
Connie D. McDaniel | 6 Months | Director, Virtus Mutual Fund Family | Yes | |||||||||||
William B. Plummer | 3 Years | Former Executive Vice President & Chief Financial Officer, United Rentals Inc. | Yes | |||||||||||
John T. Turner | 6 Months | Chairman of the Board, W.C. Bradley Co. | Yes |
Chair Member
Beginning on page 52, we provide specific data about the compensation of our NEOs as defined by rules promulgated by the Securities and Exchange Commission, or the SEC, for 2019. Our NEOs for the year ended December 31, 2019 were:
Jeffrey S. Sloan, Chief Executive Officer
Cameron M. Bready, President and Chief Operating Officer (and former Chief Financial Officer)
Paul M. Todd, Senior Executive Vice President and Chief Financial Officer
Dr. Guido F. Sacchi, Senior Executive Vice President and Chief Information Officer
David L. Green, Senior Executive Vice President, General Counsel and Corporate Secretary
[Dated: , 2012]
[ , 2012]
GLOBAL PAYMENTS INC.|2020 Proxy Statement– 9
Questions and Answers About Our Annual Meeting and this Proxy Statement
10 GLENLAKE PARKWAY, NORTH TOWER1. Why did I receive these materials?
ATLANTA, GEORGIA 30328
PROXY STATEMENT
This Proxy Statementproxy statement is being furnished to solicit proxies on behalf of the Boardboard of Directorsdirectors of Global Payments Inc. (the “Company” or “we”)our Company for use at the 20122020 annual meeting of shareholders (the “Annual Meeting”), and at any adjournments or postponements thereof. The Annual Meetingannual meeting will be held at our offices at 10 Glenlake Parkway, North Tower,3550 Lenox Road, Atlanta, Georgia, 30328-347330326 on September 19, 2012,Wednesday, April 29, 2020 at 11:009:30 a.m., Atlanta time, forEastern Daylight Time.
2. What am I voting on and how does the board of directors recommend that I vote?
Our board of directors recommends that you voteFOR each of the following purposes:four proposals scheduled to be voted on at the meeting:
Proposal 1: Election of each of the twelve directors |
Proposal 2: Approval, on an advisory basis, of the compensation of |
Proposal 3: Approval of amendments to our |
Proposal 4: Ratification of the reappointment of Deloitte |
3. Could other matters be decided at the annual meeting?
Yes. The shareholders may also transact any other business that may properly come before the Annual Meetingannual meeting or any adjournments or postponements thereof. If any other matter properly comes before the meeting and you have submitted your proxy, the proxy holders will vote as recommended by the board or, if no recommendation is made, in their own discretion.
Notice4. Why did I receive a mailed notice of Electronic Availabilityinternet availability of Proxy Statement and Annual Report.proxy materials instead of a full set of proxy materials?
As permitted by the Securities and Exchange Commission (“SEC”) rules,SEC, we are making this proxy statement and our annual reportAnnual Report on Form10-K available to our shareholders electronically via the Internet.internet. The notice of electronic availability contains instructions on how to access this proxy statement and our annual reportAnnual Report on Form10-K and how to vote online.online or submit your proxy over the internet or by telephone. You will not receive a printed copy of the proxy materials in the mail. Instead,mail unless you request one, which you may do by following the notice instructs you on how to access and review all of the important informationinstructions contained in the proxy statement and annual report. The notice also instructsnotice. We encourage you on how you may submit your proxy overto take advantage of the Internet or by telephone. If you would like to receive a printed copyelectronic availability of our proxy materials you should followto help reduce the instructions for requesting such materials contained in the notice.
The Notice of Electronic Availability of Proxy Materialscost and this Proxy Statement are first being made available to shareholders on or about August 10, 2012.
(1) Voting Shares.Pursuant to our Amended and Restated Articles of Incorporation, only the Company’s common shares, no par value (the “Common Stock”), may be voted at the Annual Meeting.
(2) Record Date.Only those holders of Common Stock of record at the close of business on August 1, 2012, are entitled to receive notice and to vote at the Annual Meeting or any adjournment or postponement thereof. On that date, there were shares of Common Stock issued and outstanding, held by approximately shareholders of record. These holders are entitled to one vote per share.
(3) Quorum.In order for any business to be conducted, the holders of a majorityenvironmental impact of the shares entitled to vote at the Annual Meeting must be present (a “Quorum”), either in person or represented by proxy. Abstentions and votes withheld, and shares represented by proxies reflecting abstentions or votes withheld, will be treated as present for purposes of determining the existence of a Quorum at the Annual Meeting. They will not be considered as votes “for” or “against” any matter for which the respective shareholders have indicated their intention to abstain or withhold their votes, but in some instances may be considered votes “cast.” Broker or nominee non-votes, which occur when shares held in “street name” by brokers or nominees who indicate that theyannual meeting.
5. How do not have discretionary authority to vote on a particular matter, will not be considered as votes “for” or “against” that particular matter. Broker and nominee non-votes will be treated as present for purposes of determining the existence of a Quorum and may be entitled to vote on other matters at the Annual Meeting.I vote?
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(4) Voting Options. The first proposal, which is the election of three directors in Class III, will require the vote of the holders of a plurality of the shares of Common Stock represented and entitled to vote at the Annual Meeting at which a Quorum is present. Shareholders may (i) vote “for” each nominee, or (ii) “withhold” authority to vote for any nominee. If a Quorum is present, a vote to “withhold” and a broker non-vote will have no effect on the outcome of the election of directors. The three nominees receiving the most votes will be elected to serve as the Class III Directors for a three-year term.
With respect to the second proposal, the approval, on an advisory (non-binding) basis, of the compensation of our named executive officers as described in this Proxy Statement requires that the votes cast in favor of the proposal exceed the votes cast against the proposal. Shareholders may (i) vote “for,” (ii) vote “against,” or (iii) “abstain” from voting on the proposal. Abstentions and broker non-votes will not affect the outcome of this proposal.
With respect to the third proposal, to approve the Second Amended and Restated Articles of Incorporation requires the affirmative vote of the holders of at least two-thirds (2/3) of all classes of stock entitled to vote. Shareholders may (i) vote “for,” (ii) vote “against,” or (iii) “abstain” from voting on the proposal. Abstentions and broker non-votes will be treated as a vote against this proposal.
With respect to the fourth proposal, the ratification of Deloitte as the Company’s independent public accountants for the fiscal year ending May 31, 2013, requires that the votes cast in favor of the proposal exceed the votes cast against the proposal. Shareholders may (i) vote “for,” (ii) vote “against,” or (iii) “abstain” from voting on the proposal. Abstentions will have no effect on the outcome of the reappointment of Deloitte as the Company’s independent public accountants.
(5) How to Vote.If you received a notice of electronic availability, you cannot vote your shares by filling out and returning the notice. Thethat notice however, provides instructions on how to vote by Internet,internet, by telephone or by requesting and returning a paper proxy card.
(6) Internet and Telephone Voting. Shareholders of record can simplify their voting and reduce our costs by voting their shares via the Internet or by telephone. Shareholders You may submit theiryour proxy voting instructions via the Internetinternet or telephone by following the instructions provided in the notice of electronic availability.notice. The Internetinternet and telephone voting procedures are designed to authenticate shareholders’ identities,your identity, to allow shareholdersyou to vote theiryour shares, and to confirm that theiryour voting instructions have beenare properly recorded. If your shares are held in the name of a bank or a broker, the availability of Internetinternet and telephone voting will depend on the voting processes of the applicable bank or broker; therefore, it is recommendedbroker. Therefore, we recommend that you follow the voting instructions on the form you receive. If you received a printed version of the proxy materials by mail, you may vote by following the instructions provided with your proxy materials and on your proxy card.
10 – GLOBAL PAYMENTS INC. |(7) Default Voting.2020 Proxy StatementWhen a proxy is timely executed and not revoked, the shares represented by the proxy will be voted in accordance with the instructions indicated in the proxy. IF NO INSTRUCTIONS ARE INDICATED, HOWEVER, PROXIES WILL BE VOTED “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES NAMED IN PROPOSAL 1, “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS IN PROPOSAL 2, “FOR” THE APPROVAL OF THE SECOND AMENDED AND RESTATED ARTICLES OF INCORPORATION IN PROPOSAL 3, AND “FOR” PROPOSAL 4 RELATING TO THE RATIFICATION OF THE REAPPOINTMENT OF DELOITTE AS THE COMPANY’S INDEPENDENT PUBLIC ACCOUNTANTS.
The Board of Directors is not presently aware of any business to be presented for a vote at the Annual Meeting other than the proposals noted above. If any other matter properly comes before the meeting, the proxy holders will vote as recommended by the Board or,
6. What if no recommendation is made, in their own discretion.I change my mind after I vote?
(8) Revocation of a Proxy.A shareholder’s
Your submission of a proxy via the Internet,internet, by telephone or by mail does not affect the shareholder’syour right to attend the annual meeting in person. A shareholder who has given a proxyYou may revoke ityour proxy at any time prior to its being voted atbefore it is exercised in any of the Annual Meeting by (i) deliveringfollowing ways:
Deliver written notice of revocation to our Corporate Secretary Suellyn P. Tornay, at our address listed on the first page of this proxy statement, (ii) properly submitting3550 Lenox Road, Suite 3000, Atlanta, Georgia 30326, or submit to us a duly executed proxy card bearing a later date, (iii) votingdate. To be effective, your notice of revocation or new proxy card must be received by our Corporate Secretary, David L. Green, at or before the annual meeting.
Change your vote via the Internetinternet or by telephone at a later date, or (iv) appearingdate. To be effective, your vote must be received before 11:59 p.m., Eastern Daylight Time, on April 28, 2020, the day before the annual meeting.
Appear at the Annual Meetingannual meeting and votingvote in person; provided, however, that no such revocation under clause (i) or (ii) shall be effective until writtenperson, regardless of whether you previously submitted a notice of revocationrevocation.
7. Who is entitled to vote?
All shareholders who owned shares of our common stock at the close of business on March 6, 2020 are entitled to vote at the annual meeting. On that date, there were shares of common stock issued and outstanding, held by approximately shareholders of record. Shareholders are entitled to one vote per share.
8. How many votes must be present to hold the annual meeting?
In order for any business to be conducted, the holders of a majority of the shares entitled to vote at the annual meeting must be present, either in person or by proxy. This is referred to as a later dated proxy card is received by the Corporate Secretary at or before the Annual Meeting,“quorum.” Abstentions and no such revocation under clause (iii) shallbrokernon-votes (described below) will be effective unless received on or before 1:00 a.m. Central Time on September 19, 2012.
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(9) Adjourned Meeting.treated as present for purposes of establishing a quorum. If a Quorumquorum is not present, the Annual Meetingannual meeting may be adjourned by the holders of a majority of the shares of Common Stock represented at the Annual Meeting.annual meeting. The Annual Meetingannual meeting may be rescheduled at the time of the adjournment with no further notice of the reconvened meeting if the date, time and place of the reconvened meeting are announced at the adjourned meeting before its adjournment; provided, however, that if a new record date is or must be fixed, notice of the reconvened meeting must be given to the shareholders of record as of the new record date. An adjournment will have no effect on the business to be conducted at the meeting.
PROPOSAL ONE:9. What are the voting standards for the proposals?
ELECTION OF DIRECTORS; NOMINEESProposal 1: Election of directors.
Our Bylaws provide Election of the 12 directors nominated by our board requires the affirmative vote of a majority of the votes cast. That means that this proposal is approved if the number of shares voted “for” the proposal exceeds the number of shares voted “against” the proposal.
Proposal 2:Say-on-pay. Approval, on an advisory basis, of the compensation of the NEOs for 2019 requires the affirmative vote of a majority of the votes cast. That means that this proposal is approved if the number of shares voted “for” the proposal exceeds the number of shares voted “against” the proposal.
Proposal 3: Elimination of supermajority voting requirements. Approval of the amendments to our Articles of Incorporation to eliminate the supermajority voting requirements requires the affirmative vote of holders of a majority of our issued and outstanding shares of common stock as of March 6, 2020.
Proposal 4: Independent public accounting firm. Approval of the ratification of the reappointment of Deloitte as our independent public accounting firm for the year ending December 31, 2020 requires the affirmative vote of a majority of the votes cast. That means that this proposal is approved if the number of shares voted “for” the proposal exceeds the number of shares voted “against” the proposal.
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 11
10. What is the difference between a “shareholder of record” and a “beneficial owner of shares held in street name?”
Shareholders of record. If your shares are registered directly in your name with our transfer agent, Computershare, you are the shareholder of record with respect to those shares, and we sent the notice of electronic availability directly to you. If you request copies of the proxy materials by mail, you will receive a proxy card.
Beneficial owners of shares held in street name. If your shares are held in an account at a brokerage firm, bank, broker-dealer or other similar organization, then you are the beneficial owner of shares held in “street name,” and the notice of electronic availability was forwarded to you by that organization. The organization holding your account is considered the shareholder of record for purposes of voting at the annual meeting. As a beneficial owner, you have the right to direct that organization on how to vote the shares held in your account. If you request copies of the proxy materials by mail, you will receive a voting instruction form.
11. What happens if I do not return a proxy or do not give specific voting instructions?
Shareholders of record. If you are a shareholder of record and you do not vote via the internet, by telephone or by mail, your shares will not be voted unless you attend the annual meeting to vote them in person. If you are a shareholder of record and you sign and return a proxy card without giving specific voting instructions, then your shares will be voted in the manner recommended by the board of directors constitutingon all matters presented in this proxy statement and as the Boardproxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the annual meeting.
Beneficial owners of shares held in street name. If you hold your shares in street name and do not provide voting instructions to your broker, your broker will have the discretionary authority to vote your shares only on proposals that are considered “routine.” The only proposal at the annual meeting that is considered routine is the ratification of the reappointment of our independent registered public accounting firm. All of the other proposals are considered“non-routine,” which means that your broker will not have the discretionary authority to vote your shares with respect to such proposals. Shares for which you do not provide voting instructions and a broker lacks discretionary voting authority are referred to as “brokernon-votes.” Brokernon-votes are counted as present for the purpose of establishing a quorum, but whether they are counted for purpose of voting on proposals depends on the voting standard for the particular proposal.
Abstentions andbroker non-votes will have the same effect as a vote “against” the proposal to amend the Articles of Incorporation and will have no effect on the outcome of the vote tore-elect directors, approve the advisory vote on the compensation of the NEOs or ratify the appointment of Deloitte.
12. What should I do if I receive more than one proxy or voting instruction card?
Shareholders may receive more than one set of voting materials, including multiple copies of the notice of electronic availability, these proxy materials and proxy cards or voting instruction cards. For example, shareholders who hold shares in more than one brokerage account may receive separate notices for each brokerage account in which shares are held. Shareholders of record whose shares are registered in more than one name will receive more than one notice. You should vote in accordance with all of the notices you receive to ensure that all of your shares are counted.
13. Who pays the cost of proxy solicitation?
The cost of soliciting proxies will be borne by us. However, shareholders voting electronically (via phone or the internet) should understand that there may be costs associated with electronic access, such as usage charges from internet service providers or telephone companies. In addition to solicitation of shareholders of record by mail, telephone or personal contact, arrangements will be made with brokerage houses to furnish proxy materials to their principals, and we may reimburse them for mailing expenses. Custodians and fiduciaries will be supplied with proxy materials to forward to beneficial owners of common stock.
12 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
14. May I propose actions for consideration at next year’s annual shareholder meeting?
Proposals for Inclusion in Next Year’s Proxy Statement (Rule14a-8): SEC rules permit shareholders to submit proposals for inclusion in our proxy statement if the shareholder and the proposal meet the requirements specified in Rule14a-8 of the Securities Exchange Act of 1934, or the Exchange Act. Proposals submitted in accordance with Rule14a-8 for inclusion in our proxy statement for the 2021 annual shareholder meeting must be received by our Corporate Secretary no earlier than , 2020 and no later than , 2020, which is 120 days before the one year anniversary of the mailing of this proxy statement.
Director Nominees for Inclusion in Next Year’s Proxy Statement (Proxy Access): Our bylaws permit a shareholder (or a group of no more than 20 shareholders) owning 3% or more of our common stock continuously for at least three years to nominate up to an aggregate limit of two candidates or 20% of our board (whichever is greater) for inclusion in our proxy statement. Notice of such nominees must be received no earlier than , 2020 and no later than close of business on , 2020.
Other Business Proposals/Director Nominees: Our bylaws also set forth the procedures that a shareholder must follow to nominate a candidate for election as a director or to propose other business for consideration at shareholder meetings, in each case, not submitted for inclusion in next year’s proxy statement (either under proxy access or Rule14a-8), but instead to be presented directly at shareholder meetings. In each case, director nominations or proposals for other business for consideration at the 2021 annual shareholder meeting submitted under these bylaw provisions must be received by our Corporate Secretary between , 2020 and , 2020. Special notice provisions apply under the bylaws if the date of the annual meeting is more than 30 days before or 60 days after the anniversary date.
Our Corporate Secretary address is: 3550 Lenox Road, Suite 3000, Atlanta, GA 30326. Notice must include the information required by our bylaws, which are available without charge upon written request to our Corporate Secretary.
Cautionary Note Regarding Forward-Looking Statements
This proxy statement contains forward-looking statements as defined in the Exchange Act and is subject to the safe harbors created therein. The forward-looking statements contained herein are generally identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” “committed,” “ensure,” or the negative of these terms or other similar expressions. Forward-looking statements are based on the beliefs and assumptions of our management and on currently available information. Accordingly, our future plans and expectations may not be achieved and our results could differ materially from those anticipated in our forward-looking statements as a result of many known and unknown factors, many of which are beyond our ability to predict or control. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in our Annual Report on Form10-K. We undertake no responsibility to publicly update or revise any forward-looking statement, except as required by law.
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 13
Proposal One: Election of Directors shall be not less than two or more than twelve, as determined from time to time by resolution
Our board of directors, upon the recommendation of the shareholders orGovernance and Nominating Committee, has nominated the individuals identified on the following pages for election as directors. Each nominee is currently a director of Global Payments. The board believes that the qualifications and experience of the director nominees, as described below, will continue to contribute to an effective and well-functioning board. For information on the factors the board considers when evaluating candidates for nomination, see “Board and Corporate Governance — Board of Directors. Our Board of Directors has adoptedMembership Criteria” on page 22.
If elected, each nominee will continue to serve as a resolution that the Board should have nine members. The Board of Directors currently consists of nine members, who are divided into three classes, with the term of office of each class ending in successive years. Each class of directors serves staggered three-year terms.
The three directors in Class III, Alex W. Hart, William I Jacobs, and Alan M. Silberstein have been nominated for election at the Annual Meeting. The Class III Directors will be elected to hold officedirector until the 2015 annual meetingCompany’s 2021 Annual Meeting of shareholders,Shareholders or until their respective successors have beenhis or her successor is duly elected and qualified or he or she resigns or is otherwise removed. Each nominee has agreed to serve as a director if elected.
In connection with our merger with TSYS, we amended our bylaws to provide that until their respective earlierthe 2022 annual meeting of shareholders, the number of directors that comprises the entire board of directors will be twelve, unless changed by the affirmative vote of at least 75% of the board. Until the 2022 annual meeting of shareholders, no vacancy on the board created by the resignation, retirement, disqualification, removal from office or death of a director will be filled by the board, and the board will not nominate any individual to fill such vacancy, unless, in the case of a vacancy created by a continuing Global Payments director, not less than a majority of the continuing Global Payments directors then in office have approved the appointment or nomination (as applicable) to fill such vacancy and, in the case of a vacancy created by a continuing TSYS director, not less than a majority of the continuing TSYS directors then in office have approved the appointment or nomination (as applicable) to fill such vacancy.
Election Process
The Company has a majority voting standard to elect directors in uncontested elections of directors, such as this election. Under the majority voting standard, a nominee must receive a greater number of votes “FOR” than “AGAINST” his or her election. If an uncontested nominee who is already a director receives more “AGAINST” votes than “FOR” votes, that director will continue to serve as a “holdover director,” but is required to tender his or her resignation to the board. If the tendered resignation does not expressly require acceptance by the board, the resignation will become effective immediately, or upon the date set forth in the resignation, and there will be a vacancy on the board upon the effective date of the resignation. If the tendered resignation specifies that it is not effective until accepted by the board, the board has the discretion to accept or reject the resignation. In such a case, the Governance and Nominating Committee will promptly consider the tendered resignation and recommend to the board whether to accept or reject the tendered resignation. The Company will publicly disclose the board’s decision within 90 days from the date of the certification of the election results.
In each case, the director nominee, if elected, will serve a shorter term in the event of his or her resignation, retirement, disqualification, or removal from office or death. In the event that any of the nominees is unable to serve (which is not anticipated), the persons designated as proxies will cast votes for such other person(s) as they may select.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF ALL OF THE NOMINEES FOR DIRECTOR.
select, subject to the guidelines set forth above. The affirmative vote of the holders ofat least a pluralitymajority of the shares of Common Stock represented and entitledvotes cast with respect to votethe director nominee at the Annual Meetingannual meeting at which a Quorumquorum is present is required for the election of each of the nominees. If a choice is specified on the proxy card by a shareholder, the shares will be voted as specified. If no specification is made, the shares will be voted “FOR” each of the threetwelve nominees.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF ALL OF THE NOMINEES FOR DIRECTOR.
14 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
Director Nominee Biographies
M. Troy Woods • Chairman since 2019 • Age 68 |
Prior to its merger with Global Payments in 2019, Mr. Woods served as Chairman, President and Chief Executive Officer of TSYS (July 2014 — September 2019); President and Chief Operating Officer of TSYS (December 2003 — July 2014); Executive Vice President of TSYS (1995 — 2003); Vice President of TSYS (1987 — 1995); Senior Vice President of Consumer Lending of AmSouth Bank (1982 — 1987); Senior Vice President for Card Services of United American Bank (1977 — 1979). | |
Kriss Cloninger III • Lead Independent Director • Independent director since 2019 • Compensation Committee • Age 72 | Skills and Qualifications: Mr. Cloninger’s qualifications to serve on the board include his leadership skills, risk management experience, expertise in corporate strategy development, and experience as both the president and a principal financial officer of a public company with a strong international business. Mr. Cloninger served as the President and member of the board of directors (2001 — 2017), and Chief Financial Officer (1992 — 2015) of Aflac Incorporated, an insurance holding company; and prior to that as Principal with KPMG LLP. Mr. Cloninger serves as a director of Tupperware Brands Corporation and is Chair of its Compensation Committee. He served on the board of TSYS from 2004 and as lead independent director of TSYS from 2017 until the closing of the company’s merger with Global Payments in September 2019. |
The following pages set forth the names of the nominees and the directors continuing in office, their ages, the month and year in which they first became directors of the Company, their positions with the Company, their principal occupations and employers for at least the past five years, any other directorships held by them in the last five years in companies that are subject to the reporting requirements of the Securities Exchange Act of 1934 (the Exchange Act”) or any company registered as an investment company under the Investment Company Act of 1940, as well as additional information. The following pages include the experience that led the Board of Directors to conclude that the individual should continue to serve as a director of the Company. GLOBAL PAYMENTS INC. |2020 Proxy Statement– 15
Jeffrey S. Sloan • Chief Executive Officer • Director since 2013 • Age 52 | Skills and Qualifications: Mr. Sloan’s qualifications to serve on the board include his more than 26 years of experience in the financial services and technology industries, thein-depth knowledge of the Company he has obtained as our Chief Executive Officer since October 2013 (and formerly our President), his extensive experience with public companies and his strong leadership skills. In addition, he has significant experience with strategic transactions and mergers and acquisitions. Mr. Sloan has served as Chief Executive Officer of the Company (since October 2013); President of the Company (June 2010 — June 2014); Partner, Goldman Sachs Group, Inc. (2004 — May 2010), where Mr. Sloan led the Financial Technology Group in New York and focused on mergers, acquisitions and corporate finance; Managing Director, Goldman Sachs Group, Inc. (2001 — 2004); Vice President, Goldman Sachs Group, Inc. (1998 — 2001); Director, FleetCor Technologies, Inc., a publicly-traded provider of fuel cards and workforce payment products and services (since July 2013). | |
F. Thaddeus Arroyo • Independent Director since September 2019 • Technology Committee (Chair) • Age 55 | Skills and Qualifications: Mr. Arroyo’s qualifications to serve on the board include his experience in innovation, cyber-security and global business experience and mergers and acquisitions, in addition to his leadership skills and ability to manage technology innovation projects as he has done in various roles at AT&T. Mr. Arroyo serves as the Chief Executive Officer of AT&T Consumer Business (since September 2019). He previously served as Chief Executive Officer of AT&T Business (2017 — September 2019); CEO of AT&T Mexico, LLC (January 2015 — December 2016); President-Technology Development of AT&T (September 2014 — January 2015); Chief Information Officer of AT&T (2007 — 2014); CIO at Cingular Wireless (2001 — 2007) and in various capacities with Sabre Inc. (1992 — 2001), including Senior Vice President of Product Marketing and Development. |
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Robert H.B. Baldwin, Jr. • Independent Director since April 2019 • Director since April 2016 • Audit Committee • Age 65 | Skills and Qualifications: Mr. Baldwin’s qualifications to serve on the board include his financial and industry experience, andin-depth knowledge of our business gained from his 16 years of service as a member of Heartland’s executive management team, as well as his many contributions to the growth and success of Heartland during his tenure. Mr. Baldwin has served as Vice Chairman (an executive office), Heartland (June 2012 — April 2016); Interim Chief Financial Officer, Heartland (October 2013 — April 2014); President, Heartland (2007 — June 2012); Chief Financial Officer, Heartland and its predecessor, Heartland Payment Systems LLC (2000 — 2011); Chief Financial Officer, COMFORCE Corp., a publicly-traded staffing company (1998 — 2000); Managing Director, financial institutions advisory business of Smith Barney (1985 — 1998); Vice President, Citicorp (1980 — 1985). Mr. Baldwin currently serves as director of Boomtown Network, Inc., a private company that provides intelligent software and services (since May 2019). | |
John G. Bruno • Independent Director since June 2014 • Compensation Committee (Chair) • Technology Committee • Age 55 | Skills and Qualifications: Mr. Bruno’s qualifications to serve on the board include his extensive executive leadership experience with technology, cyber-security and payments-related matters within the financial services industry through his prior position as Chief Information Officer, and current position as Chief Operations Officer, of Aon, plc, and his service in executive roles at NCR Corporation and Symbol Technologies, Inc. Mr. Bruno has served as Chief Operating Officer (since February 2020), Chief Executive Officer, Data and Analytic Services, and member of the Executive Committee of Aon, plc, a publicly-traded global risk management service provider (since April 2017); Chief Operations Officer (April 2017 — February 2020); Executive Vice President of Enterprise Innovation and Chief Information Officer, Aon, plc (September 2014 — April 2017); Executive Vice President, Industry and Field Operations and Corporate Development, NCR Corporation, a publicly-traded technology company (November 2013 — September 2014), where Mr. Bruno chaired the company’s Enterprise Risk Management Committee; Executive Vice President and Chief Technology Officer, NCR Corporation (November 2011 — November 2013); Executive Vice President, Industry Solutions Group, NCR Corporation (2008 — October 2011); Managing Director, Goldman Sachs Group, Inc. (2007 — 2008); Managing Director, Merrill Lynch & Co., Inc. (2006 — 2007); Senior Vice President, General Manager, RFID Division of Symbol Technologies, Inc., a private information technology company (2005 — 2006); Senior Vice President, Corporate Development, Symbol Technologies, Inc. (2004 — 2005); Senior Vice President, Business Development, and Chief Information Officer, Symbol Technologies, Inc. (2002 — 2004). |
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 17
William I Jacobs • Independent Director since 2001 • Compensation Committee • Governance and Nominating Committee • Age 78 | Skills and Qualifications: Mr. Jacobs’ qualifications to serve on the board include his extensive executive management experience, leadership skills demonstrated throughout his16-year tenure as our Chairman of the board or lead director, board expertise and legal training. The Board believes Mr. Jacobs will continue to provide leadership and consensus building skills on matters of strategic importance. Through his tenure on our board, Mr. Jacobs has acquired an unmatchable breadth of knowledge and understanding of our business, which allows him to offer a unique perspective on the Company’s strategies and operations. Mr. Jacobs served as Chairman of the Company’s board of directors (June 2014 — September 2019); Lead Director of the Company’s board of directors (2003 — May 2014); Business Advisor (since August 2002); Managing Director and Chief Financial Officer of The New Power Company (2000 — 2002); Senior Executive Vice President, Strategic Ventures for MasterCard International (1999 — 2000); Executive Vice President, Global Resources for MasterCard International (1995 — 1999); Executive Vice President, Chief Operating Officer, Financial Security Assurance, Inc., a bond insurance company (1984 — 1994); Director, Asset Acceptance Capital Corp., a publicly-traded debt collection company that merged with Encore Capital Group, Inc. in June 2013 (2004 — June 2013); member of the board of directors of Green Dot Corporation, a publicly-traded financial services company (since April 2016), Chairman of its board (since June 2016), and currently its interim CEO (since December 2019); member of the board of directors of Repay Holdings Corporation, a publicly traded financial technology company (since July 2019). | |
Joia M. Johnson • Independent Director since September 2019 • Technology Committee • Compensation Committee • Age 60 | Skills and Qualifications: Ms. Johnson’s qualifications to serve on the board include her global leadership experience over several corporate functions for publicly traded companies including legal, human resources, corporate social responsibility, government and trade relations, real estate, and corporate security and her domestic and global mergers and acquisitions experience. Ms. Johnson has served as the Chief Administrative Officer of Hanesbrands Inc., a publicly traded marketer of innerwear and activewear apparel (since October 2016), and as its General Counsel and Secretary (since January 2007); Executive Vice President, General Counsel and Corporate Secretary of RARE Hospitality International, Inc. (2001 — 2007); a director of Crawford & Company (2011 — 2019), the world’s largest independent provider of claims management solutions to the risk management and insurance industry, as a member of its Audit Committee and as the chair of the Compensation Committee (2015 — 2019). |
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Ruth Ann Marshall • Independent Director since 2006 • Technology Committee • Governance and Nominating Committee • Age 65 | Skills and Qualifications: Ms. Marshall’s qualifications to serve on the board include her deep knowledge of our business and industry, having served, among other roles, as President, Americas for Mastercard International, as well as her experience with the issues, opportunities and challenges facing our Company, which our board believes will continue to make her an invaluable member of our board. Moreover, Ms. Marshall’s longevity as a director gives her a unique perspective on the history and the direction of the Company. Ms. Marshall has served as President, Americas for Mastercard International (2000 — 2006), a publicly-traded financial services provider; Senior Executive Vice President, Concord EFS, Inc., a public provider of processing services that merged with First Data Corporation in 2004 (1995 — 1999); Director, Regions Financial Corporation, a publicly-traded financial institution (since 2011) and ConAgra, Inc., a publicly-traded packaged food company (since 2007). | |
Connie D. McDaniel • Independent Director since September 2019 • Governance and Nominating Committee • Audit Committee • Age 61 | Skills and Qualifications: Ms. McDaniel’s qualifications to serve on the board include her experience as the chief audit executive of a Fortune 100 public company, her financial expertise, her merger and acquisition experience and her international business experience. Ms. McDaniel serves as a director of the Virtus Mutual Fund Family (since 2017) and as an audit committee member of the Virtus Closed End Funds board, which includes the Duff & Phelps Select MLP & Midstream Energy Fund, Inc., the Virtus Global Multi-Sector Income Fund and the Virtus Total Return Fund Inc. (since January 2020). She previously served as a director and Audit Committee Chair of TSYS (2014 — September 2019); a director of the RidgeWorth Funds where she chaired its Audit Committee (2008 — 2017); Vice President and Chief of Internal Audit of The Coca-Cola Company (2009 — 2013) and its Vice President, Global Finance Transformation (2007 — 2009) and Vice President and Controller (1999 — 2007). |
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 19
William B. Plummer • Independent Director since March 2017 • Audit Committee (Chair) • Age 61 | Skills and Qualifications: Mr. Plummer’s qualifications to serve on the board include his executive leadership experience, including his service as the Chief Financial Officer of United Rentals, Inc., along with his extensive financial and accounting expertise, which the board believes will enable him to provide valuable leadership to the oversight of financial reporting. Mr. Plummer currently serves as a business consultant/advisor (since February 2019); senior advisor of United Rentals Inc., a publicly traded equipment rental company (October 2018 — January 2019), and before that as its Executive Vice President and Chief Financial Officer (December 2008 — October 2018), where Mr. Plummer was responsible for the development of the company’s finance activities, investor relations, andco-led its merger, acquisition and divestiture strategies; Chief Financial Officer of Dow Jones & Company, Inc., a publishing and financial information firm (2006 — 2007), where Mr. Plummer set policy for global finance and corporate strategy; Vice President and Treasurer of Alcoa, Inc., an industrial corporation (2000 — 2006), where Mr. Plummer was responsible for global treasury policy and relationship management with commercial and investment banks; director and audit and compensation committee member of Waste Management, Inc., a publicly traded waste management and environmental services company (since August 2019); chairman and a member of the audit committee of Nesco Holdings, Inc., a publicly traded specialty rental equipment to the electric utility, telecom and railend-markets (since April 2019); director of Venture Metals, Inc., a privately held metal recycling company (since August 2019); director and member of the audit committee and technology committee, John Wiley & Sons, Inc., a publisher and service provider in the scientific research, higher education and professional development fields (2003 — 2019); director, UIL Holdings, Inc., an electric and natural gas utility company (2013 — 2015). | |
John T. Turner • Independent Director since September 2019 • Governance and Nominating Committee (Chair) • Audit Committee • Age 63 | Skills and Qualifications: Mr. Turner’s qualifications to serve on the board include his experience in business management, corporate strategy development, including international business, mergers and acquisitions and risk assessment. John T. Turner has served as Chairman of the board of the W.C. Bradley Co., a privately held consumer products and real estate company (since April 2018); director of W.C. Bradley Co. (since 1999); director of TSYS (2003 — September 2019) and chair of its Nominating and Corporate Governance Committee; various capacities with W.C. Bradley Co. and/or its subsidiaries, including President of Bradley Specialty Retailing, Inc. (1979 — 1999). |
There is no family relationship between any of our executive officersNEOs or directors. ThereOther than as described below, there are no arrangements or understandings between any of our directors and any other person pursuant to which any of them was elected as a director, other than arrangements or understandings with the directors solely in their capacities as such. For information concerning membership
20 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
Board and Corporate Governance
The board does not have a policy on committeeswhether the roles of Chairperson and Chief Executive Officer should be separate or combined. The Company’s Corporate Governance Guidelines provide that if the Chairperson of the board is not an independent director, then the board shall appoint a lead director, who shall be an independent director. If the Chairperson is an independent director, the board may appoint a lead independent director.
In connection with the merger with TSYS, Mr. Woods was appointed Chairman of the board and Mr. Cloninger was appointed Lead Independent Director of the board. Until the 2022 annual meeting of shareholders, Mr. Woods and Mr. Cloninger may not be removed from their respective positions without the affirmative vote of at least 75% of the board.
Chairperson of the Board of Directors, see “Other Information about the Board and its Committees” below.
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NOMINEES FOR DIRECTOR
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MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
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Class II
Term Expiring Annual Meeting 2014
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Presides over shareholder meetings. |
Lead Independent Director Duties
✓ | Presides at executive sessions of the board’s independent directors; |
Serves as liaison between the Chairman and independent directors; |
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Serves as a liaison between management, including the |
(1) Meetings. During the fiscal year ended May 31, 2012 (the 2012 fiscal year), our Board of Directors held eight meetings. All directors attended 100% of the combined total of the Board of Directors meetings and meetings of the committees on which they served during the period for which the respective director served on the Board of Directors or the applicable committee, except for Mr. Hart who attended 92% of all such meetings and Mr. Killian who attended 90% of all such meetings.
(2) Fiscal Year 2012 Director Compensation. The following table reflects the compensation payable to the outside directors of the Company.
2012 DIRECTOR COMPENSATION
Name | Fees Earned or Paid in Cash ($) | Stock Awards (1) ($) | Nonqualified Deferred Compensation Earnings (2)($) | Total ($) | ||||||||||||
(a) | (b) | (c) | (f) | (h) | ||||||||||||
Edwin H. Burba, Jr. | $ | 81,000 | $ | 125,000 | — | $ | 206,000 | |||||||||
Paul R. Garcia (3) | — | — | — | — | ||||||||||||
Alex W. Hart | $ | 79,000 | $ | 125,000 | — | $ | 204,000 | |||||||||
William I Jacobs | $ | 121,500 | $ | 150,000 | — | $ | 271,500 | |||||||||
Raymond L. Killian | $ | 74,000 | $ | 125,000 | — | $ | 199,000 | |||||||||
Ruth Ann Marshall | $ | 68,500 | $ | 125,000 | — | $ | 193,500 | |||||||||
Alan M. Silberstein | $ | 71,000 | $ | 125,000 | — | $ | 196,000 | |||||||||
Michael W. Trapp | $ | 88,500 | $ | 125,000 | — | $ | 213,500 | |||||||||
Gerald J. Wilkins | $ | 68,000 | $ | 125,000 | — | $ | 193,000 |
Assists in creation of |
Approves retention of consultants who report to the |
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(3) Compensation Policy.During fiscal year 2012, our policy regarding the compensationAt least a majority of our non-employee directors, is summarized as follows:
Director | Basic Cash Retainer | Supplemental Cash Retainer | Annual Stock Retainer | |||||||||
Lead Director | $ | 55,000 | $ | 50,000 | $ | 150,000 | ||||||
Chairman of Audit Committee | $ | 55,000 | $ | 20,000 | $ | 125,000 | ||||||
Chairman of Compensation Committee | $ | 55,000 | $ | 10,000 | $ | 125,000 | ||||||
Chairman of Other Committees | $ | 55,000 | $ | 5,000 | $ | 125,000 | ||||||
All other non-employee directors | $ | 55,000 | N/A | $ | 125,000 |
All Common Stock granted pursuant to the annual stock retainer described in the table above is valued at the market price asand all of the date of grant and is issued under our 2011 Incentive Plan. Pursuant to the foregoing policy, Mr. Jacobs received 3,736 shares of Common Stock, and each of the other non-employee directors received 3,113 shares of Common Stock. Such Common Stock was issued and cash was paid on September 28, 2011, the business day following the annual meeting of shareholders in 2011. We believe that paying part of the annual consideration in Common Stock encourages ownershipmembers of our Common Stock by our directors.
In addition, all non-employee directors received $1,500 per Board meeting attended, except for the lead director who received $2,500 per Board meeting. Non-employee directors who served on a committee received $1,500 per committee meeting, while the chairperson of such committee received $2,500 per committee meeting. Telephonic meetingsAudit Committee, Compensation Committee and telephonic participation for both Board meetingsGovernance and committee meetings are compensated at $1,000 per meeting. We do not compensate a director who is also an employee of the Company for his or her services as a director. Directors were also compensated for their out-of-pocket expenses incurred in connection with attendance at Board and committee meetings.
(4) Outstanding Options for Directors.The following table reflects the outstanding options (vested and unvested) for each non-employee director as of May 31, 2012. The “spread” value contained in the third column is calculated by multiplying the number of options outstanding by the difference between the value of the Common Stock at the closing price on May 31, 2012, which was $42.48, and the exercise price of the option.
Non-employee Directors | Options Outstanding as of May 31, 2012 (includes vested and unvested) | Value as of May 31, 2012 (includes vested and unvested) | ||||||
Edwin H. Burba, Jr. | 29,894 | $ | 58,569 | |||||
Alex W. Hart | 41,292 | $ | 301,680 | |||||
William I Jacobs | 50,050 | $ | 548,699 | |||||
Raymond L. Killian | 41,292 | $ | 301,680 | |||||
Ruth Ann Marshall | 25,124 | $ | 16,951 | |||||
Alan M. Silberstein | 41,292 | $ | 301,680 | |||||
Michael W. Trapp | 25,124 | $ | 16,951 | |||||
Gerald J. Wilkins | 25,124 | $ | 16,951 |
(5) Non-Qualified Deferred Compensation Plan. The non-employee directors are eligible to participate in the Company’s Non-Qualified Deferred Compensation Plan, or “DC Plan.” Ms. Marshall and Mr. Silberstein are the only directors who participated in the DC plan during fiscal 2012. Pursuant to the DC Plan, non-employee directors are permitted to elect to defer up to 100% of their annual cash retainer and meeting fees. Participant accounts are credited with earningsNominating Committee, must be “independent” based on the participant’s investment allocation among a menulisting standards of investment options selected by the DC Plan administrator. Participants are 100% vested in the participant deferrals and related earnings. The Company does not make contributions to the DC Plan and does not guarantee any return on participant account balances. Participants may allocate their plan accounts into sub-accounts that are payable upon separation from service or on designated specified dates. Except in the case of death or disability, participants may elect in advance to have their various account balances pay out in a single lump sum or in installments over a period of two to ten years. In the event a participant separates from service by reason of death or
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disability, the participant or his designated beneficiary will receive the undistributed portion of his or her account balances in a lump-sum payment. Subject to approval by the DC Plan administrator, in the event of an unforeseen financial emergency beyond the participant’s control, a participant may request a withdrawal from an account up to the amount necessary to satisfy the emergency (provided the participant does not have the financial resources to otherwise meet the hardship).
(6) Board Leadership Structure. The Board of Directors does not have a formal policy on whether the same person should serve as the Chairman of the Board and the Chief Executive Officer. Since 2002, however, Mr. Garcia has served in both roles. The Board believes the combined role of Chief Executive Officer and Chairman, together with a lead independent director having the duties described below, is in the best interest of the shareholders because it provides the appropriate balance between strategy development and independent oversight of management. The Board of Directors believes that having our Chief Executive Officer as Chairman of the Board facilitates the Board’s decision-making process because Mr. Garcia possesses detailed and in-depth knowledge of the issues, opportunities, and challenges facing the Company and its business and is thus best positioned to develop agendas (with input from the lead independent director) that ensure that the Board’s time and attention is focused on the most critical matters. His combined role enables decisive leadership, ensures clear accountability, and enhances the Company’s ability to communicate its message and strategy clearly and consistently to the Company’s shareholders, employees, customers, and suppliers.
Mr. Jacobs serves as our lead independent director. The lead independent director’s duties include providing input on the Board meeting agenda items, serving as the chairperson for all executive sessions of the independent directors, and communicating to the Chief Executive Officer the results of the independent executive Board sessions. Executive sessions of the independent directors are generally held immediately after each regularly scheduled meeting of the Board. The independent directors of the Board met in executive session eight times during our fiscal year ended May 31, 2012.
Any interested party may contact the lead independent director by directing such communications to Mr. Jacobs in care of the Corporate Secretary at our address (10 Glenlake Parkway, North Tower, Atlanta, Georgia 30328-3473). Any correspondence received by the Corporate Secretary in accordance with the foregoing sentence will be forwarded to him.
(7) Director Independence. Each year the Board of Directors undertakes a review of director independence based on the standards for director independence included in the New York Stock Exchange, corporate governance rules. The Boardor the NYSE. Each year, our board of directors reviews the independence of our directors and considers, whether or not there existed anyamong other things, relationships and transactions during the past three years between each director or any member of his or her immediate family, on the one hand, and theour Company and itsour subsidiaries and affiliates, on the other hand.
The purpose of the review is to determine whether or not any such relationships and transactions existed and, if so, whether any such relationships or transactions were inconsistent with a determination that the director is independent. In fiscal year 2012, there were no such relationships or transactions between the non-employee directors and the Company to review and, as a result, the Board of Directors has determined that all of the directors, except Mr. Garcia (who serves as the Company’s Chief Executive Officer), are independent of the Company and its management.
(8) Committees. Our Board of Directors has a separately-designated Audit Committee, a Compensation Committee, a Governance, Nominating, and Risk Oversight Committee, and a Technology Committee. The Audit Committee has been established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Board of Directors has determined that all members of the four committees satisfy the independence requirements of the SEC and the New York Stock Exchange. Each of the committee charters and our corporate governance guidelines are available on our website (www.globalpaymentsinc.com), and will be provided free of charge, upon written request of any shareholder addressed to Global Payments Inc., 10 Glenlake Parkway, North Tower, Atlanta, Georgia 30328-3473, Attention: Investor Relations. Certain information regarding the functions of the Board’s committees and their present membership is provided below.
(9) Audit Committee. As of the end of fiscal year 2012, the members of the Audit Committee were Mr. Trapp (Chairperson), Mr. Wilkins, and Mr. Silberstein. The Audit Committee operates under a written charter adopted by the Board of Directors which is available on our website (www.globalpaymentsinc.com). The Audit Committee annually reviews a report by the independent auditors describing the firm’s internal quality control procedures; reviews the scope, plan and results of the annual audit of the financial statements by our independent auditors; reviews the scope, plan and results of the internal audit program; reviews the nature and extent of non-audit professional services performed by the independent auditors; and annually recommends to the Board of Directors the firm of independent public accountants to be selected as our independent auditors for the next fiscal year. During fiscal year 2012, the Audit Committee held four meetings, each of which was separate from a regular Board meeting.
(10) Audit Committee Financial Expert. The Board of Directors has determined that the chairman of the Audit Committee, Mr. Trapp, is an audit committee financial expert and is independent as independence for audit committee members is defined under the rulesNYSE listing standards.
The NYSE listing standards provide that to qualify as an “independent” director, in addition to satisfying certain bright-line criteria, our board of directors must affirmatively determine that a director has no material relationship with our Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with our Company). Additional independence requirements established by the SEC and the New York Stock Exchange.
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(11) Compensation Committee. As of the end of fiscal year 2012, theNYSE apply to members of the CompensationAudit Committee were General Burba (Chairperson), Mr. Hart, Mr. Jacobs, Mr. Killian, and Ms. Marshall. The Committee operates under a written charter which is available on our website (www.globalpaymentsinc.com). This Committee reviews levels of compensation, benefits, and performance criteria for our executive officers and administers the Amended and Restated 2000 Long Term Incentive Plan, the 2000 Employee Stock Purchase Plan, the 2000 Director Plan, the Amended and Restated 2005 Incentive Plan, and the 2011 Incentive Plan. They also consider our compensation programs from a risk perspective. Additional information regarding risk consideration is contained inCompensation Committee.
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 21
Using these standards for determining the Compensation Tables and Narratives section underindependence of its members, the heading “Consideration of Risk”board determined that the following directors are independent:
The Compensation Committee charter allows the Committee to delegate certain matters within its authority to individuals, and the Committee may form and delegate authority to subcommittees as appropriate.
Kriss Cloninger III | John G. Bruno | Ruth Ann Marshall | ||
F. Thaddeus Arroyo | William I Jacobs | Connie D. McDaniel | ||
Robert H.B. Baldwin, Jr. | Joia M. Johnson | William B. Plummer | ||
John T. Turner |
In addition, the Committee has the authority under its charter to retain outside advisors to assist the Committee in the performance of its duties, and for fiscal year 2012 the Committee retained the services of Meridian Compensation Partners LLC, an independent compensation consulting firm. The Compensation Discussion and Analysis section of this proxy statement describes our processes and procedures for the consideration and determination of executive compensation, including the roleeach member of the executive officers in determining compensation, and describes the role of the independent consultant in more detail.
During fiscal year 2011,Audit Committee, the Compensation Committee also hired Meridian to assist with a review ofand the director compensation. Governance and Nominating Committee is independent.
The CompensationGovernance and Nominating Committee with Meridian’s assistance, made recommendations to the Board, which were discussed by the Board and were approved on September 27, 2011. The executives have no rolebelieves that diversity is an important factor in determining Board compensation. During fiscal year 2012, the Compensation Committee held two meetings, both of which were separate from regular Board meetings.
(12) Compensation Committee Interlocks and Insider Participation. None of the members of the Compensation Committee (a) has ever served as an officer or an employee of the Company or any of its subsidiaries and (b) has ever had any relationship requiring disclosure by the Company under Item 404 of Regulation S-K. None of the Company’s executive officers serves as a membercomposition of the board of directors or compensation committee, or similar committee, of any other company that has one or more of its executive officers serving as a member of the Company’s Board of Directors or Compensation Committee.
(13) Technology Committee. As of the end of fiscal year 2012, the members of the Technology Committee were Mr. Killian (Chairperson), Mr. Hart, and Mr. Silberstein. The committee operates under a written charter which is available on our website (www.globalpaymentsinc.com). This committee is to serve as a liaison between the Board and management with regard to matters related to information technology and information security and to review the practices and key initiatives of the Company related to information technology and information security. During fiscal year 2012, the Technology Committee held three meetings, all of which were separate from regular Board meetings.
(14) Governance, Nominating, and Risk Oversight Committee. As of the end of fiscal year 2012, the members of the Governance, Nominating, and Risk Oversight Committee (the “Governance Committee”) were Mr. Hart (Chairperson), General Burba, Mr. Jacobs, and Ms. Marshall. The committee operates under a written charter which is available on our website (www.globalpaymentsinc.com). This committee is responsible for developing and recommending to the Board of Directors a set of corporate governance principles applicable to us, determining the structure of the Board and its committees, for overseeing the Company’s enterprise risk management process (as describedconsiders it in more detail below), and for identifying, nominating, proposing, and qualifying nominees (including incumbent directors) for open seats on the Board of Directors, based primarily on the following criteria:
Experience as a member of senior management or director of a significant business corporation, educational institution, or not-for-profit organization;
Particular skills or experience that enhances the overall composition of the Board of Directors;
Serves on no more than five other boards of directors of publicly-held corporations; and
Serves on no more than three other audit committees of boards of directors of publicly-held corporations.
We domaking nominee recommendations, although it does not have a formal diversity policy. However, as part of its evaluation of director candidatesThe Governance and in addition to other standards the committee may deem appropriate from time to time for the overall structure and composition of the Board, the Committee considers whether each candidate, if elected, assists in achieving a mix of board members that represent a diversity of background and experience. Accordingly, the Board seeks members from diverse professional backgrounds who combine a broad spectrum of relevant industry and strategic experience and expertise that, in concert, offer the Company and its shareholders diversity of opinion and insight in the areas most important to us and our corporate mission. The Committee also considers the independence of candidates for director nominees, including the appearance of
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any conflict in serving as a director. Candidates for director nominees who do not meet all of these criteria may still be considered for nomination to the Board if the Committee believes the candidate will make an exceptional contribution to the Company and its shareholders. In evaluating nominees, the Committee will also take into account the consideration that members of the Board of Directors should collectively possess a broad range of skills, expertise, industry knowledge and other knowledge, business experience and other experience useful to the effective oversight of our business.
The GovernanceNominating Committee considers candidates for director who are recommended by other members of the Boardboard of Directorsdirectors and by management, as well as those identified by any outside consultants who are periodically retained by the Committeecommittee to assist in identifying possible candidates. The Governance Committeecommittee will evaluate potential nominees for open Boardboard positions suggested by shareholders in accordance with our policies for shareholder proposals and on the same basis as all other potential nominees. Nominations from shareholdersSee “Questions and Answers About Our Annual Meeting and this Proxy Statement — May I Propose Actions for the 2013 annual meeting must be received by the Company on or after [150 calendar days prior to this year’s mailing date, so March , 2013] and on or before [120 calendars days prior to this year’s mailing date, so April , 2013]. To recommend a potential nominee, you may send a letter to the Corporate Secretary, Global Payments Inc., 10 Glenlake Parkway, North Tower, Atlanta, Georgia, 30328. Such letter should include the following information:Consideration at Next Year’s Annual Shareholder Meeting?” for additional information about our policies for shareholder proposals.
Name and address of the shareholder making the recommendation, as it appears on our books and records;
Number of shares of our capital stock that are owned by such shareholder;
Name, age, business and residential address, educational background, current principal occupation or employment, and principal occupation or employment for the preceding five full fiscal years of the individual recommended for consideration as a director nominee;
All other information relating to the recommended candidate that would be required to be disclosed in solicitations of proxies for the election of directors or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act, including the recommended candidate’s written consent to being named in the proxy statement as a nominee and to serving as a director if approved by the Board of Directors and elected; and
A written statement from the shareholder making the recommendation stating why such recommended candidate meets our criteria and would be able to fulfill the duties of a director.
Members ofKey factors the Governance and Nominating Committee must discuss and evaluate possible candidates prior to recommending them to the Board. This committee had three meetings during fiscal year 2012.
(15) Majority Voting.The Board of Directors has approved the corporate governance guideline described below regarding majority voting. In an uncontested election of directors (i.e., an election where the only nominees are those recommended by the Board), any nominee for director who receives a greater number of votes “withheld” from his or her election (excluding broker and nominee non-votes) than votes “for” his or her election will be required to promptly tender his or her resignation to the Board following certification of the shareholder vote in accordance with the Director Code of Conduct and Ethics.
The Governance Committee will promptly consider any resignation submitted by a director in accordance with the foregoing paragraph and the Governance Committee will recommend to the Boardconsiders when determining whether to accept or reject the tendered resignation, or whether other action should be taken. In considering whether to accept or reject the tendered resignation, the Governance Committee will consider all factors deemed relevant by the members of the Governance Committee including, without limitation, the stated reasons why shareholders “withheld” votes for election from such director, the length of service and qualifications of the director whose resignation has been tendered, the director’s contributions to the Company, and the Company’s Corporate Governance Guidelines.
The Board will act on the Governance Committee’s recommendation and publicly disclose its decision within 90 days from the date of the certification of the election results. In considering the Governance Committee’s recommendation, the Board will consider the factors considered by the Governance Committee and such additional information and factors the Board believes to be relevant. Following the Board’s decision on the Governance Committee’s recommendation, the Company will promptly publicly disclose the Board’s decision whether to accept the resignation as tendered (providing an explanation of the process by which the decision was reached and, if applicable, the reasons for rejecting the tendered resignation) in a Form 8-K filed with the SEC. Any director who tenders his or her resignation pursuant to this provision will not participate in the Governance Committee’s or the Board’s recommendation or decision, or any deliberations related thereto.
(16) Role in Risk Oversight by the Board of Directors.Managing risk is an ongoing process inherent in all decisions made by management. The Board of Directors discusses risk throughout the year, particularly at Board and Committee
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meetings when specific actions are considered for approval. The Board of Directors has ultimate responsibility to oversee risk which they accomplish through the management reporting process. The Company has created an enterprise risk management (“ERM”) program and the Governance Committee has been appointed by our Board of Directors to coordinate the oversight of the ERM program by the Board. In connection with the Company’s ERM, the Company has established a management risk committee, which is comprised of the senior management of the Company, who is responsible for identifying, assessing, prioritizing, and mitigating the material risks affecting the Company including monitoring the business environment for changes in and emergence of significant risks.
The Company also has an internal audit department, which has responsibility for providing an independent risk assessment and an assessment of the effectiveness of the risk mitigation activities developed by management. The Audit Committee directly provides oversight of risks related to the integrity of the consolidated financial statements, internal control over financial reporting, and the internal audit function. The Compensation Committee oversees the management of risks related to management succession planning and the Company’s executive compensation program.
(17) Communications from Security Holders. Any security holder may contact any member of the Board of Directors by directing such communication to such Board member in care of the Corporate Secretary at our address (10 Glenlake Parkway, North Tower, Atlanta, Georgia 30328-3473). Any correspondence received by the Corporate Secretary in accordance with the foregoing sentence shall be forwarded to the applicable Board member.
(18) Attendance at Annual Meeting. Allappoint directors are expected to attend our annual meeting of shareholders. Seven members of our Board of Directors attended our fiscal year 2011 annual shareholder meeting in person and two members participated by telephone.
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PROPOSAL TWO:
ADVISORY VOTE ON THE COMPENSATION
OF OUR NAMED EXECUTIVE OFFICERS
In accordance with Section 14A of the Exchange Act, the Board of Directors is asking shareholders to approve an advisory resolution on executive compensation. The advisory vote is a non-binding vote on the compensation of the Company’s named executive officers. The vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. The text of the resolution is as follows:
Resolved, that the shareholders of Global Payments Inc. approve, on an advisory basis, the compensation of the Company’s named executive officers as disclosed in the proxy statement for the Company’s 2012 annual meeting of shareholders pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis section and the Summary Compensation Table and related compensation tables and narrative discussion.
The Company urges you to read the Compensation Discussion and Analysis in this proxy statement, which discusses how our compensation policies and procedures implement our compensation philosophy. You should also read the Summary Compensation Table and other related compensation tables and narrative disclosure which provide additional details about the compensation of the executive officers in fiscal year 2012 whose compensation is disclosed in this proxy statement. We have designed our compensation and benefits program and philosophy to attract, retain and motivate talented, qualified and committed executive officers who share our philosophy and desire to work toward the Company’s goals. We believe that our executive compensation program aligns individual compensation with the short-term and long-term performance of the Company in ways such as the following:
Pay opportunities are appropriate to the size of the Company when compared to peer companies
The pay program is heavily performance-based using multiple measures which are fully disclosed in the proxy statement
Long-term incentives are linked to shareholders through performance shares that change in value as stock price changes
There has been no backdating or re-pricing of stock options
Perquisites are a minor part of our compensation program
Our insider trading policy prohibits directors and employees from engaging in any transaction in which they profit if the value of GPN’s common stock falls
Executives are subject to stock ownership guidelines
Change-in-control agreements are double trigger, and new arrangements (those entered in to after April 1, 2010) do not contain provisions offering excise tax gross-ups
The Committee engages an independent compensation consultant
The vote regarding the compensation of the named executive officers described in this Proposal No. 2, referred to as a “say-on-pay advisory vote,” is advisory, and is, therefore, not binding on the Company or the Board of Directors. Although non-binding, the Board of Directors values the opinions that shareholders express in their votes and will review the voting results and take them into consideration when making future decisions regarding our executive compensation programs as they deem appropriate.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS,
AS DISCLOSED IN THIS PROXY STATEMENT.
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PROPOSAL THREE:
APPROVAL OF THE SECOND AMENDED AND RESTATED
ARTICLES OF INCORPORATION
Section 6.1 of the Company’s Amended and Restated Articles of Incorporation (the “Articles”) currently provides that directors shall be elected by the affirmative vote of the holders of a plurality of the shares represented at the meeting of shareholders at which the director stands for election and entitled to elect such director. The Board of Directors has approved, and recommends the approval of, an amendment and restatement of the Articles that would eliminate this restriction, and thereby allow the Board to amend the Company’s Bylaws to implement a majority voting standard for the election of directors in uncontested elections. The Company’s proposed Second Amended and Restated Articles of Incorporation are attached to the Proxy Statement as Appendix A.
The Business Corporation Code of Georgia (or, the Code) provides that, unless otherwise specified in a company’s Articles of Incorporation or a bylaw that fixes a greater voting requirement for the election of directors that is adopted by the board of directors of a corporation having shares listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national or affiliated securities association, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election. Section 6.1 of the Articles specifies that a director shall be elected by the affirmative vote of the holders of a plurality of the shares represented at the meeting of shareholders at which the director stands for election and entitled to elect such director. As a result, the Company’s directors are currently elected by a plurality vote. Under plurality voting, only “for” votes are counted and the directors receiving the most votes will be elected.
Under a majority voting standard in uncontested elections, each vote is required to be counted “for” or “against” the director’s election. In order to be elected, the votes cast “for” such nominee’s election must exceed the number of votes cast “against” such nominee’s election. Shareholders are also entitled to abstain with respect to the election of a director, although abstentions will have no effect in determining whether the required affirmative majority vote has been obtained. In contested elections (elections in which the number of nominees exceed the number of directors to be elected), directors continue to be elected by a plurality of the votes cast.include:
| Experience — Particular skills and leadership experience that are relevant to the Company’s strategic vision
•Age and Tenure — The age and board tenure of each incumbent director •Board Size — The committee periodically evaluates whether a larger or smaller board would be preferable, depending on the board’s needs and the availability of qualified candidates •Board Independence — Independence of candidates for director nominees, including the appearance of any conflict in serving as a director •Board Contribution — Integrity, business judgment and commitment |
22 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
The Board of Directors, through its Governance, Nominating and Risk Oversight Committee (Governance Committee), regularly evaluates all of the Company’s corporate governance practices. The Board of Directorsboard has previously approvedidentified the following corporate governance guideline, which incorporates a form of majority voting for uncontested electionskey qualifications and experience that is sometimes referredare important to be represented on our board as a “plurality plus” standard:
Majority Voting. In an uncontested electionwhole in light of directors (i.e., an election where the only nomineesour current business strategy and expected needs. The charts below indicate how these qualifications are those recommendedrepresented on our board based on information provided by the Board), any nominee for director who receives a greater number of votes “withheld” from his or her election (excluding broker and nominee non-votes) than votes “for” his or her election will promptly tender his or her resignation to the Board following certification of the shareholder vote, in accordance with the Director Code of Conduct and Ethics.
The Governance Committee will promptly consider any resignation submitted by a director in accordance with the foregoing paragraph and the Governance Committee will recommend to the Board whether to accept or reject the tendered resignation, or whether other action should be taken. In considering whether to accept or reject the tendered resignation, the Governance Committee will consider all factors deemed relevant by the members of the Governance Committee including, without limitation, the stated reasons why shareholders “withheld” votes for election from such director, the length of serviceour directors. Information regarding each director’s skills and qualifications of the director whose resignation has been tendered, the director’s contributions to the Company, and the Company’s Corporate Governance Guidelines.
The Board will actcan be found within their individual biographies on the Governance Committee’s recommendation and publicly disclose its decision within 90 days from the date of the certification of the election results. In considering the Governance Committee’s recommendation, the Board will consider the factors considered by the Governance Committee and such additional information and factors the Board believes to be relevant. Following the Board’s decision on the Governance Committee’s recommendation, the Company will promptly publicly disclose the Board’s decision whether to accept the resignation as tendered (providing an explanation of the process by which the decision was reached and, if applicable, the reasons for rejecting the tendered resignation) in a Form 8-K filed with the Securities and Exchange Commission.
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To the extent that one or more directors’ resignations are accepted by the Board, the Governance Committee will recommend to the Board whether to fill such vacancy or vacancies or to reduce the size of the Board.
Any director who tenders his or her resignation pursuant to this provision will not participate in the Governance Committee’s or the Board’s recommendation or decision, or any deliberations related thereto. If a majority of the members of the Governance Committee received a greater number of votes “withheld” from their election (excluding broker and nominee non-votes) than votes “for” their election at the same election, then the independent directors who are on the Board who did not receive a greater number of votes “withheld” from their election (excluding broker and nominee non-votes) than votes “for” their election (or who were not standing for election) will appoint a Board committee amongst themselves solely for the purpose of considering the tendered resignations and will recommend to the Board whether to accept or reject them. This Board committee may, but need not, consist of all of the independent directors who did not receive a greater number of votes “withheld” from their election (excluding broker and nominee non-votes) than votes “for” their election or who were not standing for election.
When it adopted this corporate governance principle, the Board recognized that the majority vote standard was an evolving concept. After careful consideration, the Board now believes it is in the best interest of the Company and its shareholders to amend the Articles to enable the Board to fully implement majority voting in uncontested director elections.pages 15-20.
The proposed Second Amended and Restated Articles of Incorporation would delete the last sentence of Section 6.1 of the Articles, which, as noted above, mandates use of a plurality voting standard in all elections of directors. After the Second Amended and Restated Articles of Incorporation are filed and become effective, the Board will then amend Section 3.02 of the Bylaws to delete a sentence that essentially replicates the language of the Articles and replace it with the following:
Except as provided in Section 3.04, each director shall be elected by a majority of the votes cast with respect to the director by the shares represented in person or by proxy and entitled to vote at any meeting for the election of directors at which a quorum is present; provided, however, that if the number of director nominees exceeds the number of directors to be elected ten days before the mailing of the definitive proxy statement, then each director shall be elected by a vote of the plurality of the shares represented in person or by proxy at such meeting and entitled to vote on the election of directors. For purposes of this Section 3.02, a majority of the votes cast means that the number of shares voted “for” a director must exceed the number of votes cast “against” that director.
Under the Code, an incumbent director who is not re-elected may remain in office until his or her successor is elected and qualified, continuing as a “holdover” director until the director’s resignation, disqualification, removal from office, or death. If the Second Amended and Restated Articles of Incorporation are approved by the Company’s shareholders, in addition to amending the Bylaws to implement the majority voting standard, the Board will adopt a revised director resignation policy to address the continuation in office of a “holdover” director so that an incumbent director who did not receive the requisite affirmative majority of the votes cast for his or her re-election must tender his or her resignation to the Board.
In addition to deleting the last sentence of Section 6.1, as described above, the proposed Second Amended and Restated Articles of Incorporation would delete various provisions of the Articles that are either no longer relevant or have only historical interest: the former Article Three (identification of the Company’s initial registered office and agent), the former Article Four (identification of the Company’s incorporator), the former Article Five (identification of the Company’s initial principal office) and the former Section 2.2 and Appendix A (designation of a series of preferred stock that was used to support a shareholder protection rights plan, which the Company previously allowed to expire in accordance with its terms).
Approval of the Second Amended and Restated Articles of Incorporation will require the affirmative vote of at least two- thirds (2/3) of the votes entitled to be cast by all holders of shares of the Company’s common stock. If approved by the
17
Company’s shareholders, the Second Amended and Restated Articles of Incorporation will become effective upon the filing with the Georgia Secretary of State. The Company would make such a filing promptly after the annual meeting, following which the Board of Directors will adopt the bylaw changes described above. The new majority voting standard would then be applicable to an uncontested election of directors at the Company’s 2013 annual meeting of shareholders and thereafter.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE “FOR” THE PROPOSAL TO APPROVE THE COMPANY’S
SECOND AMENDED AND RESTATED ARTICLES OF INCORPORATION
PROPOSAL FOUR:
RATIFICATION OF THE REAPPOINTMENT OF AUDITORS
The Audit Committee recommends, and the Board of Directors selects, independent public accountants for the Company. The Audit Committee has recommended that Deloitte & Touche LLP, or Deloitte, who served during the fiscal year ended May 31, 2012, be selected for the fiscal year ending May 31, 2013, and the Board has approved the selection. Unless a shareholder directs otherwise, proxies will be voted for the approval of the ratification of Deloitte as independent public accountants for fiscal year ending May 31, 2013. If the appointment of Deloitte is not ratified by the shareholders, the Board will consider the selection of other independent public accountants for 2013.
A representative of Deloitte will be present at the 2012 Annual Meeting. The representative will be given the opportunity to make a statement, if he or she desires to do so, and will be available to respond to appropriate questions from shareholders.
The aggregate fees billed by Deloitte for professional services rendered for the audit of our annual financial statements and the reviews of the financial statements included in our quarterly reports on Form 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements were $2,925,234 for fiscal year 2012, and $2,541,199 for fiscal year 2011.
Audit-related fees are the fees billed by Deloitte for professional services rendered for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not included under “Audit Fees” disclosed above. There were no audit-related fees billed during fiscal year 2012 or fiscal year 2011.
The aggregate fees billed by Deloitte for professional services rendered for tax compliance, tax advice, and tax planning services were $400,000 for fiscal year 2012, and $302,350 for fiscal year 2011. In fiscal year 2012, $70,000 of such fees was for tax return preparation and compliance and $330,000 was for tax consulting and advisory services. In fiscal year 2011, $67,350 of such fees was for tax return preparation and compliance and $235,000 was for tax consulting and advisory services.
Except as described above, there were no other fees billed by Deloitte for professional services in fiscal year 2012. For fiscal year 2011, Deloitte was engaged to perform advisory services related to network security procedures, which resulted in $69,000 of other fees.
The Audit Committee must approve any audit services and any permissible non-audit services provided by Deloitte prior to the commencement of the services. In making its pre-approval determination, the Audit Committee considers whether providing the non-audit services is compatible with maintaining the auditor’s independence. To minimize relationships which could appear to impair the objectivity of the independent registered public accounting firm, it is generally
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the Audit Committee’s practice to restrict the non-audit services that may be provided to us by our independent auditor to audit-related services, tax services and merger and acquisition due diligence and integration services, but other permissible non-audit services are approved on a case by case basis.
The Audit Committee has delegated to the Chair of the Audit Committee the authority to approve non-audit services by the independent registered public accounting firm within the guidelines set forth above, provided that the fees associated with the applicable engagement are not anticipated to exceed $100,000. Any decision by the Chair to pre-approve non-audit services must be presented to the full Audit Committee for ratification at its next scheduled meeting. All of the services described under the headings “Audit Fees,” “Audit-Related Fees,” “Tax Fees,” and “All Other Fees” were approved by the Audit Committee in accordance with the foregoing policy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE REAPPOINTMENT OF THE INDEPENDENT PUBLIC ACCOUNTANTS.
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CERTAIN INFORMATION CONCERNING THE EXECUTIVE OFFICERS
The following table sets forth the names of our executive officers as of May 31, 2012, their ages, their positions with the Company, and their principal occupations and employers for at least the past five years. There are no arrangements or understandings between any of our executive officers and any other person pursuant to which any of them was elected an officer, other than arrangements or understandings with our officers acting solely in their capacities as such. Our executive officers serve at the pleasure of our Board of Directors.
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indicates board representation of the qualification |
We periodically review our board’s composition to ensure that we continue to have the right mix of skills, background and tenure. The board currently believes that an appropriate size is seven to twelve members, allowing, however, for changing circumstances that may warrant a higher or a lower number. The Governance and Nominating Committee considers director candidates suggested by members of the committee, other directors, shareholders and management, and has engaged the services of third party firms to assist in identifying and evaluating director candidates.
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 23
As a result of healthy refreshment over recent years and the Company’s merger with TSYS, which was completed in September 2019, as of the date of this proxy statement, 73% of ournon-employee board members have joined the board in the last five years, and approximately 64% joined the board in the last three years. In addition, 42% of the board is diverse in gender and/or ethnicity. The background and skills of these directors contribute meaningfully to the Company’s strategy for future growth and long-term value creation.
Our bylaws permit a shareholder (or a group of up to 20 shareholders) who has owned at least 3% of our stock continuously for at least three years to submit director nominees for the greater of two individuals or 20% of the board for inclusion in our proxy statement if the shareholder(s) and nominee(s) meet the requirements of the bylaws.
The board also believes that directors develop an understanding of the Company and an ability to work effectively as a group over time that provides substantial value, and therefore a significant degree of continuity year-over-year is beneficial to shareholders and generally should be expected.
The current tenure, independence and diversity composition of our board is as follows:
Board and Committee Membership
Our full board of directors met five times during 2019. Each of our directors attended at least 75% of the meetings of the board, including meetings of the committees of which he or she served, in each case while the director was serving on our board of directors or such committees, as applicable, during 2019. Pursuant to our Corporate Governance Guidelines, all of our directors are expected to attend the annual meeting of shareholders, and all of our directors at the time attended the 2019 annual meeting.
In connection with the merger with TSYS, we amended our bylaws to provide that the board will have four standing committees: an Audit Committee, a Compensation Committee, a Technology Committee, and a Governance and Nominating Committee. Until the 2022 annual meeting of shareholders, the chairperson of each of the Audit Committee and Compensation Committee is designated from among Global Payments’ directors on the board prior to the merger, and the chairperson of each of the Technology Committee and Governance and Nominating Committee is designated from among the directors who are former TSYS directors. The bylaws provide that the membership of the committees will be, as practicably as possible, evenly split between Global Payments‘ directors on the board prior to the merger and the directors who are former TSYS directors.
24 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
Our board has adopted written charters for each of the standing committees. Each committee charter and our corporate governance guidelines are available in the Investor Relations section of our website, www.globalpaymentsinc.com. The following table summarizes the primary responsibilities of the committees:
Committee | ||||||
Primary Responsibilities | ||||||
Audit | The Audit Committee oversees our risk management activities with respect to our enterprise risk exposure and helps ensure (i) the integrity of our financial statements; (ii) our compliance with certain legal and regulatory requirements; (iii) the qualifications and independence of our independent public accounting firm; (iv) the performance of our internal audit function and independent public accounting firm; and (v) the effectiveness of our disclosure controls and procedures and internal control over financial reporting. In addition, the Audit Committee is responsible for reviewing and approving or ratifying all related-party transactions that would require disclosure under applicable legal requirements. The Audit Committee also prepares a report that is included in this proxy statement. | |||||
Compensation |
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Risk Management” on page 27 for additional information about the Governance and Nominating Committee’s responsibilities relating to risk management. | ||||||
Technology |
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GLOBAL PAYMENTS INC. |2020 Proxy Statement– 25
The following table provides information about current committee membership and number of meetings held during 2019:
Audit Committee | Compensation Committee | Governance and Nominating Committee | Technology Committee | |||||||||||||||||
M. Troy Woods | ||||||||||||||||||||
Kriss Cloninger III*(1) |
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Robert H.B. Baldwin, Jr.* |
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John G. Bruno* |
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William I Jacobs* |
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Ruth Ann Marshall* |
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Connie D. McDaniel*(1) |
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Jeffrey S. Sloan | ||||||||||||||||||||
John T. Turner*(1) |
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Chair Member
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COMMON STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth information as of June 20, 2012, with respect to the beneficial ownership of the Company’s Common Stock by the nominees to the Board, by the directors of the Company, by each of the persons named in the Summary Compensation Table, and by the 15 persons, as a group, who were directors and/or executive officers of the Company on June 20, 2012.
Except as explained in the footnotes below, the named persons have sole voting and investment power with regard to the shares shown as beneficially owned by them.
Name and Address of Beneficial Owner (1) | Amount and Nature of Beneficial Ownership | Percent of Class (2) | ||||||||||
Paul R. Garcia | 1,183,254 | (3 | ) | 1.47 | % | |||||||
Edwin H. Burba, Jr. | 33,721 | (4 | ) | * | ||||||||
Alex W. Hart | 52,993 | (5 | ) | * | ||||||||
William I Jacobs | 79,656 | (6 | ) | * | ||||||||
Raymond L. Killian, Jr. | 45,829 | (7 | ) | * | ||||||||
Ruth Ann Marshall. | 26,825 | (8 | ) | * | ||||||||
Alan M. Silberstein | 45,829 | (9 | ) | * | ||||||||
Michael W. Trapp | 29,899 | (10 | ) | * | ||||||||
Gerald J. Wilkins | 27,603 | (11 | ) | * | ||||||||
Jeffrey S. Sloan | 58,884 | (12 | ) | * | ||||||||
David E. Mangum | 72,598 | (13 | ) | * | ||||||||
Joseph C. Hyde | 74,346 | (14 | ) | * | ||||||||
Morgan M. Schuessler | 54,202 | (15 | ) | * | ||||||||
All Directors and Executive Officers as a group | 1,785,639 | (16 | ) | 2.22 | % |
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COMMON STOCK OWNERSHIP BY CERTAIN OTHER PERSONS
The following table sets forth information as of the date indicated with respect to the only persons who are known by the Company to be the beneficial owners of more than 5% of the outstanding shares of Common Stock.
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class as Reflected in the Applicable 13G Filing | ||||||
T. Rowe Price Associates, Inc. (1) 100 East Pratt Street Baltimore, Maryland 21202 | 9,362,712 | 11.9 | % | |||||
Janus Capital Management LLC (2) 151 Detroit Street Denver, Colorado 80206 | 4,266,115 | 5.4 | % | |||||
TimesSquare Capital Management, LLC (3) 1177 Avenue of the Americas 39th Floor New York, New York 10036 | 5,478,065 | 7.0 | % | |||||
Blackrock, Inc. (4) 40 East 52nd Street New York, New York 10022 | 4,791,762 | 6.1 | % |
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COMPENSATION AND OTHER BENEFITS:
COMPENSATION DISCUSSION AND ANALYSIS
2012 Compensation Highlights
As discussed in our Management Discussion and Analysis contained in our annual report on Form 10K for fiscal year 2012, we achieved notable financial results in fiscal year 2012. Despite the North America processing system intrusion, we achieved a record $2,204 million in revenue. Of particular note:
Our one year revenue growth was 18% and one-year cash diluted EPS growth was 15%.
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26 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
Board Oversight of Risk Management
Our 3 year compound annual growth rates (CAGR) for revenueboard of directors views the oversight of risk management as one of its key functions, regularly engaging with management to maintain a risk-aware culture where risk management is deeply and cash diluted EPS are 16%pervasively embedded in all of our activities worldwide. As described more fully below, the board fulfils this responsibility both directly and 12% respectively.through its standing committees, each of which assists the board in overseeing a part of the Company’s overall risk management.
We enhanced
The Board’s Role in Risk Oversight
Through its oversight of our competitive position inenterprise risk management program, our board takes a multi-layered approach to this oversight role. The full board engages directly with management to set high-level policy. At least annually, the US, Russia, and Europe by successfully completing CyberSource, Alfa Bank, and Malta acquisitions, respectively.
We believe that our executive compensation programs are materially alignedboard discusses with short and long-term Company performance and that our pay practices contributedmanagement the appropriate level of risk relative to our success. Below is a summarystrategy and objectives and reviews with management our existing risk management processes and their effectiveness. In addition, the board receives periodic reports on risk management activities from each committee chair while relying on each of compensation elements illustrating our focus on payingits four standing committees to provide morein-depth oversight of specific key risk exposures.
The board has delegated risk oversight responsibilities for performance.certain key risk exposures to its committees as follows:
• |
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In aggregate, the Named Executive Officers (as set forth in Section A below) earned 94% of target in fiscal year 2012 bonus payouts. These payouts were a result of achieving specific revenue, diluted EPS, and individual goals set in early fiscal year 2012. These performance goals are disclosed later in this Compensation Discussion and Analysis.
The cash bonus portion of compensation for our Named Executive Officers was reduced by an amount similar to the relative stock price decline as measured against our peer group companies from the date of the announcement of the North America processing system intrusion to our fiscal year end. Additionally, as our long-term incentives are entirely performance shares, with a portion tied to relative total shareholder return, the stock price decline had a substantial impact on the current value of the executives’ unvested equity.
In aggregate, the Named Executive Officers earned 105.7% of target in connection with the performance units based on financial measures. The payouts were a result of achieving specific revenue, diluted EPS and margin goals set in early fiscal year 2012, with time-based vesting over an additional three years. The value of the restricted award made in connection with the payout changes as our stock price changes, thereby aligning executive and shareholder interests. Any payout that may be due pursuant to the performance units based on 3 year total shareholder return will not be determined until the end of the three year performance period.
The Committee did not increase 2013 base salaries for the Named Executive Officers, other than for Mr. Schuessler in connection with a promotion to take effect on August 1, 2012. Additionally, only modest target bonus and equity increases were provided for 2013 and only for certain executives, consistent with our view toward external market alignment.
We continue to evaluate our plans every year against various sets of market data to try to effectively align our pay practices with performance. The following contains additional detail regarding our executive pay program.
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In the paragraphs that follow, we provide an overview and analysis of our compensation program and policies, the material compensation decisions we have made under those programs and policies, and the material factors that we considered in making those decisions. Following this section is a series of tables containing specific information about the compensation earned or paid in fiscal year 2012 to the following individuals, to whom we refer as our “Named Executive Officers” or “NEOs” for the purposes of this proxy statement.
Paul R. Garcia—Chairman and Chief Executive Officer
Jeffrey S. Sloan—President
David E. Mangum—Senior Executive Vice President and Chief Financial Officer
Joseph C. Hyde—President, International
Morgan M. Schuessler—Executive Vice President and Chief Administrative Officer
The discussion below is intended to help you understand the detailed information provided in the tables contained in this section and to put that information into context within our overall compensation program.
We design our compensation program with a view to retaining and attracting executive leadership of a caliber and level of experience necessary to effectively manage our complex, growth-oriented, and global businesses. Our objective is to have a compensation program that will allow us to:
Support the financial and business objectives of the organization;
Attract, motivate, and retain highly qualified executives;
Create an environment where performance is expected and rewarded;
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GLOBAL PAYMENTS INC. |2020 Proxy Statement– 27
• | Governance and Nominating Committee. The Governance and Nominating Committee oversees our risk management activities with respect to our corporate governance structure at the board and senior management level. At the board level, functions of the Governance and Nominating Committee are intended to ensure that our full board and its other committees continue to operate functionally and with an appropriate degree of independence from management, including by setting and evaluating qualifications for our directors. At the senior management level, the Governance and Nominating Committee promotes a risk-aware culture by, for example, periodically reviewing our employee business code of conduct and ethics. |
Align
• | Technology Committee. The Technology Committee oversees our risk management activities with respect to information technology, information security, cyber-security, disaster recovery, data and data privacy. The Technology Committee reviews and assesses these risks with management and the full Board and ensures that the Company has appropriate policies and programs to identify, manage and mitigate such risks. |
We have established a management risk committee comprised primarily of executive management that is responsible for identifying, assessing, prioritizing and developing action plans to mitigate key risks. The management risk committee reports to the interestsfull board or appropriate board committee periodically and more frequently as needed.
Risk oversight responsibilities related to the substance of each identified key risk exposure, such as the application of the board’s risk tolerance in a particular area, are in some cases carried out by the full board without any delegation to a committee. For example, the full board directly oversees our risk management activities with respect to risks associated with our strategic direction.
The Board’s Role in Overseeing Cyber-Risk
We employ multiple methods and technologies to secure the Company’s computing environment and ensure the confidentiality, integrity and availability of our executivesinformation assets. As noted above, technology and cyber-security qualifications and experience is one of the key factors that our Governance and Nominating Committee considers in its assessment of the board membership criteria.
Our board has delegated to the Technology Committee the responsibility to oversee the Company’s Information Security Program and cyber-security risk. Specifically, subject to oversight by the full board of directors, the Technology Committee periodically receives reports from the Company’s Chief Information Security Officer, or CISO, on the Company’s cyber-risk profile and information security initiatives. The Company’s Information Security Program is administered by the CISO, who maintains a direct reporting line to both the Technology Committee and the board. At least annually, the Technology Committee receives a formal, enterprise-wide information technology and cyber-security risk assessment and reviews and recommends the Company’s information security program supporting policies to the full board for evaluation and approval. The Technology Committee regularly reviews and discusses the Company’s technology strategy with our shareholders.the CISO and recommends the Company’s technology strategic plan to the full board for evaluation and approval.
In orderaddition, the board regularly receives information about these topics from the chair of the Technology Committee, the CISO and management and is apprised directly of incidents exceeding certain risk tolerances.
Evaluation of Board and Committee Effectiveness
Each year, our board and its committees conduct self-evaluations to do thisensure they are performing effectively our program must:and to identify opportunities to improve board and committee performance. The self-assessment is conducted under the oversight of the Governance and Nominating Committee. Anonymous andnon-anonymous evaluation responses are reviewed and assessed during board and committee executive sessions and where appropriate, addressed with management. As part of the board’s self-assessment process, directors consider various topics related to board composition, structure, effectiveness and responsibilities, as well as the overall mix of director skills, experience, diversity and backgrounds.
28 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
Ournon-employee director compensation plan is designed to attract, retain and compensate highly-qualified directors by providing them with competitive compensation and an equity interest in our executives with total compensation opportunities at levels that are competitive for comparable positions;
Provide variable, at-risk incentive award opportunities that are only payable if specific goals are achieved;
Provide significant upside opportunities for better-than-expected performance; and
Align our executives’Company to align their interests with those of our shareholders by making stock-based incentives a core elementshareholders. In lieu ofper-meeting fees, we pay our executives’ compensation.
The Compensation Committee retained an independent compensation consultant from Meridian Compensation Partners, LLC during fiscal year 2012. The consultant takes guidance fromnon-employee directors annual cash and reports directly to the Compensation Committee. The consultant advises the Compensation Committee on current and future trends and issuesstock retainers, which are payable in executive compensation andadvance on the competitiveness of the compensation structure and levels of our executives, including the Named Executive Officers. At the request of the Committee and to provide context for the Committee’s compensation decisions made for fiscal year 2012, the consultant performed the following services for the Committee late in fiscal year 2011:
Conducted a market review and analysis for the Named Executive Officers to determine whether their total targeted compensation opportunities were competitive with positions of a similar scope in similarly sized companies in similar industries;
Conducted pay and performance relationship analyses to evaluate the correlation of prior year Company performance and pay levels to those of the peer group companies;
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Prepared tally sheets on the Named Executive Officers to allow the Compensation Committee to review the total wealth accumulated duringfirst business day after each executive’s tenure with the Company and to assess its reasonableness, and to show the impact to the Company of a termination event by an executive or change in control;
Assisted with the design of the new performance units earned based on 3-year relative total shareholder return; and
Attended Committee meeting(s) to discuss these items with the Committee in early fiscal year 2012.
The same individual consultant was retained throughout the year. Meridian performed no services for the Company which were not executive or director compensation related during fiscal year 2012.
The tally sheets referred to above allowed the Committee to assess the impact of compensation decisions over time. The Committee did not deem any changes to be necessary to the compensation decisions as the result of its review of the information contained in such tally sheets.
We consider the compensation levels, programs, and practices of certain other companies to assist us in setting our executive compensation so that it is market competitive. For fiscal year 2012, the peer group listed below was utilized for this purpose. These companies were chosen because each such company is in the transaction processing or data services business, is publicly traded, and, in terms of our revenue compared to that of the peer group, we would fall near the median. We compete for talent with several of these peer companies.
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The Compensation Committee annually reviews and updates the list of companies comprising the peer group to ensure it provides an appropriate marketplace focus. The Compensation Committee used the same peer group in fiscal years 2012 and 2011.
Before the Compensation Committee met in executive session to set fiscal year 2012 compensation, the independent consultant collected and analyzed comprehensive market data for its use. The consultant presented market figures representing the size-adjusted median of the market for base salary, target short term incentive opportunity and long term incentive opportunity. The consultant used peer group proxy data as the primary data source and supplemented it as necessary with general industry information from an executive compensation database maintained by Aon Hewitt. The Committee reviewed the data for each of the Named Executive Officers for the different elements of compensation and then made individual compensation decisions, taking into consideration such factors as performance, retention, internal equity, individual development, and succession planning. Given that, some actual pay opportunities for our executives are higher than the size-adjusted market median and some are lower.
Our Chief Executive Officer (Paul R. Garcia), with the assistance of our human resources department, developed compensation recommendations for the executive officers who report directly to him (including the Named Executive Officers) based upon market data supplied by the independent consultant, the Company’s performance relative to goals approved by the Compensation Committee, individual performance versus personal objectives, and other individual contributions to the Company’s performance. The Compensation Committee decided on all aspects of Mr. Garcia’s compensation and Mr. Garcia did not determine his own compensation. The Compensation Committee reviewed and approved all compensation elements for the Named Executive Officers and set the compensation of the CEO after reviewing market information provided by its consultant.
At last year’s annual meeting of shareholders approximately 73%(prorated for partial periods for new directors). We do not pay additional compensation to directors who are also our employees for their service as a director.
Our Compensation Committee periodically reviews ournon-employee director compensation plan and makes recommendations as necessary to our full board of the shares voted were cast in support of the compensation of the Company’s named executive officers,directors. The annual cash and stock retainers we pay ournon-employee directors are as discussed and disclosed in the 2011 Proxy Statement. In 2012, the Company continued to engage with its largest shareholders and receive feedback on executive compensation practices.
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After considering the results of the initial advisory vote, weighing the feedback from our largest shareholders, and considering advice from its independent compensation consultant, the Compensation Committee adjusted the long-term incentive program to replace stock options with performance-based restricted stock units earned based on relative total shareholder return against a representative broad index of companies. For further information on the TSR shares, see the “Overview of Executive Compensation Program Elements” section below.
Also at the Annual Meeting of shareholders on September 27, 2011, our shareholders expressed a preference that advisory votes on executive compensation occur every year. In accordance with the results of this vote, the Board determined to implement an advisory vote on executive compensation every year until the next required vote on the frequency of shareholder votes on executive compensation, which is scheduled to occur at our 2017 Annual Meeting.
Director | Annual Basic Cash Retainer | Annual Supplemental Cash Retainer | Annual (FMV) | ||||||||||||
Non-Employee Chairman(1) | $ | 120,000 | $ | 95,000 | $ | 255,000 | |||||||||
Lead Independent Director | $ | 120,000 | $ | 50,000 | $ | 200,000 | |||||||||
Chair of Audit Committee | $ | 120,000 | $ | 30,000 | $ | 200,000 | |||||||||
Chair of Compensation Committee | $ | 120,000 | $ | 20,000 | $ | 200,000 | |||||||||
Chair of Other Committees | $ | 120,000 | $ | 20,000 | $ | 200,000 | |||||||||
All OtherNon-Employee Directors | $ | 120,000 | N/A | $ | 200,000 |
These retainers are payable only if the Chairman of |
The following elements comprisenumber of fully-vested shares of our compensation program for executives:
base salary,
short term incentives,
long term incentives, and
other benefits, including limited perquisites and a nonqualified deferred compensation plan.
To provide flexibility in using the different elements of compensation from year to year, the Compensation Committee’s policy with regard to the allocation of the major elements of compensation, including base salary, short term incentives, and long term incentives is to approximate the mix of pay inherent in the size-adjusted median market data provided by its consultant. The following executive pay at target levels was set by the Compensation Committee for fiscal year 2012:
Name | Base salary | Cash Incentive | Performance Shares (Financial Performance) (#) | Performance Shares (Relative TSR) (#) | ||||||||||||
Paul Garcia | $ | 1,000,000 | $ | 1,500,000 | 68,957 | 22,986 | ||||||||||
Jeffrey Sloan | $ | 618,000 | $ | 525,300 | 19,825 | 6,609 | ||||||||||
David Mangum | $ | 530,000 | $ | 450,500 | 19,825 | 6,609 | ||||||||||
Joseph Hyde | $ | 425,000 | $ | 318,750 | 12,930 | 4,310 | ||||||||||
Morgan Schuessler | $ | 350,000 | $ | 210,000 | 12,068 | 4,023 |
When the Committee established the diluted EPS goals forcommon stock granted as the annual performancestock retainer is based on the market price of our common stock on the grant date. Directors are also reimbursed for theirout-of-pocket expenses incurred in connection with attendance at board and performance unit plans thatcommittee meetings.
All of thenon-employee directors are eligible to participate in ourNon-Qualified Deferred Compensation Plan described throughout this narrative, it calculated the relationship between additional earningsunder “Board and the incremental short-term incentive and performance unit payouts that would be earned as a result of the executives reaching their goals. This maintains equilibrium between shareholder reward and executive reward between the target and maximum goal levels.
Corporate Governance — Director Compensation —(1) Base Salary. Base salary provides our executive officers with a level of compensation consistent with their skills, responsibilities, experience and performance in relation to comparable positions in the marketplace. Base salaryNon-Qualified Deferred Compensation Plan” below. Ms. Marshall is the one fixed component of our executives’ compensation. The Compensation Committee reviews the base salaries of our executive officers annually. The Named Executive Officers, except for Mr. Garciaonly current director who participated in 2019, and she did not receive any interest on deferred compensation at an increase to his base salary for fiscal year 2012, received base salary increases for fiscal year 2012 as follows: Mr. Sloan—$618,000, which increased 3% from $600,000 in fiscal year 2011; Mr. Mangum—$530,000, which increased 17.8% from $450,000 in fiscal year 2011 in order to account for his additional responsibility for the information technology function; Mr. Hyde—$425,000, which increased 3.1% from $412,000 in fiscal year 2011; and Mr. Schuessler—$350,000 which increased 2.9% from $340,000 in fiscal year 2011.above-market rate of interest.
(2) Short Term Incentives. We provide our Named Executive Officers with short term incentive opportunities to motivate and reward them for the achievement of the Company’s defined business goals and objectives and to reward individual performance. Our short term incentive program is described below under the heading “Annual Performance Plan”
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(a) Annual Performance Plan.The annual performance plan provides an opportunity for executives to earn variable at-risk cash compensation. The annual performance plan is a subplan of our 2011 Incentive Plan, and is designed to allow annual incentive awards that are fully deductible by the Company under Section 162(m) of the Internal Revenue Code (which we refer to as the Code). Under this plan, the threshold performance goal for each plan year is that we achieve positive operating income, as reflected in our consolidated statements of income and filed with our Form 10-K for such fiscal year, except that for the purpose of the annual performance plan, operating income will be rounded up or down to the nearest whole million dollar level and will exclude the impact of restructuring, acquisition-related intangible amortization expense, foreign exchange, and other non-recurring charges. We refer to this performance goal as “Threshold Operating Income Performance.” In any year in which Threshold Operating Income Performance is achieved, the plan establishes an individual award limit for each participant which will be that person’s award unless the2019 Director Compensation Committee uses its discretion to pay a lesser amount, which it is expected to do. To guide it in exercising such discretion, the Compensation Committee establishes intermediate performance metrics and their respective weightings, and intermediate award opportunity ranges, as it deems appropriate to encourage and reward particular areas of performance, as discussed below.
In early fiscal year 2012, the Compensation Committee approved the target award opportunities for each of our Named Executive Officers, expressed as a percentage of base salary. Based on the review of the market data, the Compensation Committee set the target bonus opportunities for fiscal year 2012 as follows: Mr. Garcia-$1,500,000 or 150% of his base salary, Mr. Sloan-$525,300 or 85% of his base salary, Mr. Mangum-$450,500 or 85% of his base salary, Mr. Hyde-$318,750 or 75% of his base salary, and Mr. Schuessler-$210,000 or 60% of his base salary.
Also in early fiscal year 2012, the Compensation Committee approved the three weighted performance metrics under the annual performance plan. There were two Company objectives—diluted earnings per share (EPS) and revenue, and a set of individual objectives that varied from person to person. The rationale for using each component in the plan is outlined in the following table:
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The three parts of the annual performance plan were calculated separately. The target opportunity was allocated among the three elements based upon the table below.
Name | Diluted EPS | Revenue | Individual Objectives | |||||||||
Paul Garcia | 50 | % | 30 | % | 20 | % | ||||||
All other NEOs | 40 | % | 30 | % | 30 | % |
The range of possible payouts for each performance measure varied by person, by measure and in total as shown in the tables below. Each executive could earn up to 100% of the individual objectives component. For each of the corporate components, Mr. Garcia could earn up to 225%, Mr. Sloan and Mr. Mangum could earn up to approximately 215%, and Mr. Hyde and Mr. Schuessler could earn up to 200%. Once calculated, all cash incentive payments (also referred to as bonus payments in this narrative) are totaled and then rounded to the nearest dollar.
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For Mr. Garcia:
Degree of Performance Attainment | Diluted EPS Weighted 50% | Revenue Weighted 30% | Individual Objectives Weighted 20% | Total Opportunity | ||||||||||||
Maximum | 225 | % | 225 | % | 100 | % | 200 | % | ||||||||
Target | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
Threshold | 50 | % | 50 | % | 0 | % | 40 | % | ||||||||
Below Threshold | 0 | % | 0 | % | 0 | % | 0 | % |
For Mr. Sloan and Mr. Mangum:
Degree of Performance Attainment | Diluted EPS Weighted 40% | Revenue Weighted 30% | Individual Objectives Weighted 30% | Total Opportunity | ||||||||||||
Maximum | 215 | % | 215 | % | 100 | % | 180 | % | ||||||||
Target | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
Threshold | 50 | % | 50 | % | 0 | % | 35 | % | ||||||||
Below Threshold | 0 | % | 0 | % | 0 | % | 0 | % |
For Mr. Hyde and Mr. Schuessler:
Degree of Performance Attainment | Diluted EPS Weighted 40% | Revenue Weighted 30% | Individual Objectives Weighted 30% | Total Opportunity | ||||||||||||
Maximum | 200 | % | 200 | % | 100 | % | 170 | % | ||||||||
Target | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
Threshold | 50 | % | 50 | % | 0 | % | 35 | % | ||||||||
Below Threshold | 0 | % | 0 | % | 0 | % | 0 | % |
For example, an executive eligible for the plan described in the table immediately above with a base salary of $200,000 per year and a target bonus of 50% of his base salary would have a target bonus of $100,000. Based upon the relative weighting set forth in the table above, the target bonus would be apportioned $40,000 for diluted EPS results (40%), $30,000 for revenue results (30%), and $30,000 for individual objectives (30%). The executive’s target diluted EPS cash incentive was $40,000, so he could earn from zero to 200% (or from $0 to $80,000) for this portion of the bonus. The executive’s target revenue bonus was $30,000, so he could earn from zero to 200% (or from $0 to $60,000) for this portion of the bonus. Finally, the executive’s target bonus for individual goals was $30,000, so he could earn from zero to 100% (or from $0 to $30,000) for performance against individual goals. The total payout opportunity in this example is from 0% to 170% (or from $0 to $170,000).
(i) Diluted EPS PayoutTable*
The following table containssummarizes the rangecompensation of diluted EPS goals for fiscal year 2012 and the applicable payout percentages. The diluted EPS goal excludes the impact of restructuring, acquisition-related intangible amortization expense, foreign exchange, and other non-recurring charges and includes the CyberSource, Alfa Bank, and Malta acquisitions.
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Degree of Performance Attainment | Diluted EPS | Percentage of target bonus apportioned to Diluted EPS | ||||||||||||||
Garcia | Sloan and Mangum | Hyde and Schuessler | ||||||||||||||
Maximum | $ | 3.65 | 225 | % | 215 | % | 200 | % | ||||||||
Target | $ | 3.43 | 100 | % | 100 | % | 100 | % | ||||||||
Threshold | $ | 3.21 | 50 | % | 50 | % | 50 | % | ||||||||
Below Threshold | Less than $ | 3.21 | 0 | % | 0 | % | 0 | % |
The metric at target was established at a level that reflected growth over fiscal year 2011 results. Factoring in the adjustments described above, diluted EPS for fiscal year 2012 was $3.49. Using straight line interpolation, the payout was approximately 134% for Mr. Garcia, approximately 131% for Mr. Sloan and Mr. Mangum, approximately 127% for Mr. Hyde and Mr. Schuessler of the target amount of the bonus apportioned to diluted EPS results.
(ii) Revenue Payout
The following table contains the range of revenue goals for fiscal year 2012 and the applicable payout percentages. The revenue goal excludes the impact of restructuring, acquisition-related intangible amortization expense, foreign exchange, and other non-recurring charges and includes the CyberSource, Alfa Bank, and Malta acquisitions.
Degree of Performance Attainment | Revenue (millions) | Percentage of target bonus apportioned to Revenue | ||||||||||||||
Garcia | Sloan and Mangum | Hyde and Schuessler | ||||||||||||||
Maximum | $ | 2,288 | 225 | % | 215 | % | 200 | % | ||||||||
Target | $ | 2,169 | 100 | % | 100 | % | 100 | % | ||||||||
Threshold | $ | 2,064 | 50 | % | 50 | % | 50 | % | ||||||||
Below Threshold | Less than $ | 2,064 | 0 | % | 0 | % | 0 | % |
The metric at target was established at a level that reflected growth over fiscal year 2011 results. Factoring in the adjustments described above, revenue for fiscal year 2012 was $2,153 million. Using straight line interpolation, the payout was approximately 92% for all Named Executive Officers of the target amount apportioned to revenue results.
(iii) Payout Based upon Individual Performance Objectives
The third component of the bonus payout was based upon individual performance objectives. Each of the executives could earn from zero to 100% of the payout amount allocated to individual performance. Individual performance objectives are established annually in writing. The Compensation Committee and the Lead Director set the individual performance objectives for the CEO, and the CEO approves the individual objectives for the other Named Executive Officers. For fiscal year 2012, each executive had between five and seven individual objectives. Each of the executive’s objectives was given a weighting that determined the portion of the individual performance bonus opportunity that was allocated to that objective. For example, more important objectives may comprise 25% of an executive’s opportunity while a less critical objective may comprise 10%. Collectively, all the executive’s objectives totaled 100% of his performance bonus opportunity.
At the end of the year, the CEO reviewed the performance of each Named Executive Officer (other than himself) against his objectives, and determined to what extent each objective was achieved. The percentage achievement was used to determine the payment related to each objective. The Compensation Committee approved the final payments. The Lead Director and the Compensation Committee reviewed Mr. Garcia’s performance against his objectives and determined the amount payable.
Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Total ($) | ||||||||||||
F. Thaddeus Arroyo | $ 21,096 | $ 32,087 | $ 53,183 | ||||||||||||
Robert H.B. Baldwin, Jr. | $120,000 | $189,539 | $309,539 | ||||||||||||
John G. Bruno | $132,055 | $189,539 | $321,594 | ||||||||||||
Kriss Cloninger III | $ 25,616 | $ 32,087 | $ 57,703 | ||||||||||||
William I Jacobs | $195,000 | $230,085 | $425,085 | ||||||||||||
Joia M. Johnson | $ 15,068 | $ 32,087 | $ 47,155 | ||||||||||||
Ruth Ann Marshall | $120,000 | $189,539 | $309,539 | ||||||||||||
Connie D. McDaniel | — | $ 32,087 | $ 32,087 | ||||||||||||
William B. Plummer | $142,055 | $189,539 | $331,594 | ||||||||||||
John T. Turner | $ 11,301 | $ 32,087 | $ 43,388 | ||||||||||||
M. Troy Woods | $129,589 | $148,825 | $278,414 |
31GLOBAL PAYMENTS INC. |2020 Proxy Statement– 29
* | For the directors designated by TSYS, compensation was calculated based on the difference between compensation payable under the Global Paymentsnon-employee director compensation plan and the TSYSnon-employee director compensation plan, prorated for partial periods of service as directors and new committee chairs, as applicable, during the applicable twelve-month period. |
The table below highlights the material individual objectives, achievement levels and payout amount for each NEO for fiscal year 2012.
(1) | Represents basic and supplemental cash retainers earned during 2019. All annual cash retainers are payable in advance on the first business day after each annual meeting of shareholders (prorated for partial periods for new directors and new committee chair appointments) and are considered fully earned when paid. |
(2) | Represents the aggregate grant date fair value of awards of stock granted on April 26, 2019 and October 24, 2019, all of which were fully-vested on the grant date, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718,Compensation — Stock Compensation, or FASB ASC Topic 718. The amount shown in this column is based on the closing price of our common stock on the applicable grant date. None of ournon-employee directors had any unvested stock awards outstanding as of December 31, 2019. The following table reflects the stock options for eachnon-employee director that were outstanding as of December 31, 2019. |
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(iv) Summary of the Annual Performance Plan
Due to the unauthorized North America system intrusion, the Committee made the decision to first determine the total payout of the Annual Performance Plan based on the financial and individual performance measures as described above, and then adjust the payout by an amount similar to the relative stock price decline as measured against our peer group companies from the date of the announcement of the system intrusion to our fiscal year end. This resulted in the total adjusted payouts for each Named Executive Officer summarized in the table below.
Name | Diluted EPS ($) | Revenue ($) | Individual Objectives ($) | Total Payout ($) | Total Adjusted Payout ($) | |||||||||||||||
Paul Garcia | $ | 1,005,682 | $ | 415,215 | $ | 240,000 | $ | 1,660,897 | $ | 1,420,067 | ||||||||||
Jeffrey Sloan | $ | 275,612 | $ | 145,408 | $ | 152,862 | $ | 573,882 | $ | 490,669 | ||||||||||
David Mangum | $ | 236,366 | $ | 124,703 | $ | 132,447 | $ | 493,516 | $ | 421,956 | ||||||||||
Joseph Hyde | $ | 162,273 | $ | 88,233 | $ | 93,713 | $ | 344,219 | $ | 294,307 | ||||||||||
Morgan Schuessler | $ | 106,909 | $ | 58,130 | $ | 59,220 | $ | 224,259 | $ | 191,741 |
(3) Long Term Incentive Program.Each year the Company grants long term incentive awards, which we refer to as LTIs, to executives and other key employees throughout the Company. All LTI grants were made pursuant to our Amended and Restated 2005 Incentive Plan, which was approved by our shareholders. All grants of LTIs to the Named Executive Officers are approved by the Compensation Committee. We believe the LTIs align the executives’ interests with those of the shareholders by linking their compensation to stock price. The LTI grants for Named Executive Officers represent pay opportunity for performance at target for Mr. Garcia- $4,000,000 Mr. Sloan- $1,150,000, Mr. Mangum- $1,150,000, Mr. Hyde- $750,000, and Mr. Schuessler- $700,000 Figures represent contingent pay that will be realized only if financial and relative total shareholder return goals are met.
In fiscal year 2012, 100% of the LTIs granted to the executives were in the form of performance-based restricted stock units, with 75% of the LTI value allocated to performance shares (expressed at target) based on financial targets (referred to as performance shares) and 25% allocated to performance shares (expressed at target) based on total shareholder return relative to a broad index of companies (referred to as TSR shares). The Compensation Committee implemented an LTI
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program utilizing two different types of LTI awards in order to incent and reward executives to enhance certain operational metrics (performance shares) as well as to align executive compensation with shareholder return (TSR shares). In determining the use of these plans and the allocation, the Committee took into account competitive market practices of peer group companies, the belief that a blend of equity awards provides both an incentive and retention effect, and the belief that a use of various LTI awards mitigates compensation risks that may be associated with the use of a single LTI vehicle. The decision to more heavily weight the LTI program to performance shares (75%) over TSR shares (25%) was made by the Compensation Committee in its discretion, with the support of its independent compensation consultant.
In order to determine the number of performance shares and TSR shares to grant, we established a per share value equal to 90% of the fair market value of a share of our Common Stock on the grant date ($48.34) which resulted in a per share value of $43.51. We then divided the dollar amount of the LTI grant by the per share value ($43.51) to determine the number of performance shares and TSR shares that would be granted at the target level. Any fractional shares were rounded up to the nearest whole share. The 90% figure set forth above was derived by the independent consultant and represents the risk-adjusted present value of the grants consistent with the methodology used to develop the market data for long-term incentives.
For example, if an executive’s LTI grant value was $200,000, we would have multiplied $200,000 by 75% to derive the portion of the grant to be allocated to performance shares ($150,000), reserving the remaining 25% of the grant value ($50,000) to be allocated to TSR shares. Then, we would have divided the performance-based restricted stock allocation by the estimated per-share grant value of $43.51. As a result, the executive would have received 3,448 performance shares and 1,150 TSR shares at target level.
(a) Performance-Based Restricted Stock Units (Performance Shares). Performance shares, as discussed above, were converted into a time-based restricted stock grant if the Company’s performance during the fiscal year met or exceeded pre-established goals. The amount of performance shares awarded to each NEO at target is allocated equally among three criteria: diluted EPS, revenue, and operating margin results.
By design, the LTI plan is distinguished from the short-term plan to ensure that our executives are focused on the long-term objectives of our shareholders. The five principal design differences are:
Operating margin, which is used only in the LTI plan, is a key component of long-term shareholder value creation and is a driver of stock price performance.
Unlike the short-term incentive plan, the LTI plan does not include individual objectives, in order to focus the executives on the overall performance of the Company.
Awards earned via the LTI plan are paid in time-based restricted shares with an additional 3-year vesting period, which supports a long-term outlook that reflects and rewards for long-term shareholder value creation.
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Because of the above factors, the payouts for our executives under the LTI plan and the short-term incentive plan have always been different, ensuring appropriate rewards based on both long-term and short-term results.
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The rationale for using each component in the plan is summarized in the following table:
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The following table summarizes the structure of the grant of performance shares:
Degree of Performance Attainment | % of Target Award Applicable to Diluted EPS Results Earned | % of Target Award Applicable to Revenue Results Earned | % of Target Award Applicable to Operating Margin Results Earned | Total | ||||||||||||
Maximum | 66.66 | % | 66.66 | % | 66.67 | % | 200 | % | ||||||||
Target | 33.33 | % | 33.33 | % | 33.34 | % | 100 | % | ||||||||
Threshold | 16.67 | % | 16.67 | % | 16.66 | % | 50 | % | ||||||||
Below Threshold | 0 | % | 0 | % | 0 | % | 0 | % |
The following table summarizes the performance units based on financial performance metrics at target granted during fiscal year 2012.
Name | Target Performance Shares Based on Diluted EPS Results | Target Performance Shares Based on Revenue Results | Target Performance Shares Based on Margin Results | Total Performance Shares at Target Opportunity for Fiscal Year 2012 | ||||||||||||
Paul Garcia | 22,983 | 22,983 | 22,990 | 68,957 | ||||||||||||
Jeffrey Sloan | 6,608 | 6,608 | 6,610 | 19,825 | ||||||||||||
David Mangum | 6,608 | 6,608 | 6,610 | 19,825 | ||||||||||||
Joseph Hyde | 4,310 | 4,310 | 4,311 | 12,930 | ||||||||||||
Morgan Schuessler | 4,022 | 4,022 | 4,023 | 12,068 |
Depending on the diluted EPS, revenue and operating margin results, the executives could earn from 0% to 200% of the applicable target amount.
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(i) Portion Attributable to Diluted EPS Results
The following table contains the diluted EPS goals and the applicable reward amounts for fiscal year 2012. The diluted EPS goals exclude the impact of restructuring, acquisition-related intangible amortization expense, foreign exchange, and other non-recurring charges and include the CyberSource, Alfa Bank, and Malta acquisitions.
Degree of Performance Attainment | Diluted EPS | % of Target Award Allocable to Diluted EPS results | % of Total Target Award Applicable to Diluted EPS Results Earned | |||||||||
Maximum | $ | 3.65 | 200 | % | 66.66 | % | ||||||
Target | $ | 3.43 | 100 | % | 33.33 | % | ||||||
Threshold | $ | 3.21 | 50 | % | 16.67 | % | ||||||
Below Threshold | Less than $ | 3.21 | 0 | % | 0 | % |
The metric at target was established at a level that reflected growth over fiscal year 2011 results. Factoring in the adjustments described above, diluted EPS for fiscal 2012 was $3.49. Using straight line interpolation, the payout was approximately 127%.
(ii) Portion Attributable to Revenue Results
The following table contains the revenue goals and the applicable award amounts for fiscal year 2012. The revenue goals exclude the impact of restructuring, acquisition-related intangible amortization expense, foreign exchange, and other non-recurring charges and include the CyberSource, Alfa Bank, and Malta acquisitions.
Degree of Performance Attainment | Revenue (Millions) | % of Target Award allocable to Revenue Results | % of Total Target Award Applicable to Revenue Results Earned | |||||||||
Maximum | $ | 2,288 | 200 | % | 66.66 | % | ||||||
Target | $ | 2,169 | 100 | % | 33.33 | % | ||||||
Threshold | $ | 2,064 | 50 | % | 16.67 | % | ||||||
Below Threshold | Less than $ | 2,064 | 0 | % | 0 | % |
The metric at target was established at a level that reflected growth over fiscal year 2011 results. Factoring in the adjustments described above, revenue for fiscal year 2012 was $2,153 million. Using straight line interpolation, the payout was approximately 92%.
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(iii) Portion Attributable to Operating Margin Results
The following table contains the operating margin goals and the applicable award amounts for fiscal year 2012. The operating margin goals exclude the impact of restructuring, acquisition-related intangible amortization expense, foreign exchange, and other non-recurring charges and include the CyberSource, Alfa Bank, and Malta acquisitions.
Degree of Performance Attainment | Operating Margin | % of Target Award allocable to Operating Margin Results | % of Total Target Award Applicable to Operating Margin Results Earned | |||||||||
Maximum | 23.1 | % | 200 | % | 66.67 | % | ||||||
Target | 21.1 | % | 100 | % | 33.34 | % | ||||||
Threshold | 19.1 | % | 50 | % | 16.66 | % | ||||||
Below Threshold | Less than 19.1 | % | 0 | % | 0 | % |
Factoring in the adjustments described above, operating margin for fiscal 2012 was 21.0%. Using straight line interpolation, the payout was approximately 98%.
(iv) Conversion of Performance Shares into Restricted Stock
Once the results were certified, the Committee determined the number of performance shares earned by each executive, and such shares were converted on a 1-for-1 basis into shares of restricted stock on July 26, 2012. Such shares of restricted stock vest in accordance with the following schedule: 25% vested on July 26, 2012 and the remaining 75% of the shares in three equal installments over the next three years. The following table summarizes the conversion of the performance shares to restricted stock for each executive, which equates to approximately 105.7% of the grant at target for each:
Name | Actual Performance Shares Based on Diluted EPS Results | Actual Performance Shares Based on Revenue Results | Actual Performance Shares Based on Margin Results | Total Actual Performance Shares for Fiscal Year 2012 | ||||||||||||
Paul Garcia | 29,252 | 21,207 | 22,416 | 72,874 | ||||||||||||
Jeffrey Sloan | 8,410 | 6,097 | 6,444 | 20,951 | ||||||||||||
David Mangum | 8,410 | 6,097 | 6,444 | 20,951 | ||||||||||||
Joseph Hyde | 5,485 | 3,976 | 4,203 | 13,664 | ||||||||||||
Morgan Schuessler | 5,119 | 3,711 | 3,923 | 12,753 |
(b) Performance-Based Restricted Stock Units (TSR Shares). Beginning in fiscal year 2012, we replaced the portion of LTI previously granted in stock options with performance-based restricted stock units, to be earned based on our future 3-year total shareholder return compared to the constituent companies in the S&P 500 as of June 1, 2011, with 3-year cliff vesting. We refer to these restricted stock units as TSR Shares. The design of the new grants is intended to continue to align the interests of executives with those of our shareholders, while rewarding for management contributions on a level economic playing field relative to our peer companies and enhancing retention capability.
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The following table summarizes the structure of the grant of TSR shares:
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Final payout as a percent of target will be determined based on the average of the hypothetical payouts from our cumulative TSR positioning through each of the last four quarters of the performance cycle. For example, for the fiscal year 2012 grants, final payout will be determined based on the average of the payouts related to our relative TSR positioning as of August 31, 2013, November 30, 2013, February 28, 2014 and May 31, 2014.
The following table summarizes the target TSR shares granted during fiscal year 2012.
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M. Troy Woods* | 334,805 |
* | Reflects stock options to purchase shares of TSYS common stock that were outstanding and unexercised prior to the merger with TSYS, which automatically converted into options to purchase shares of Global Payments common stock in accordance with the terms of the merger agreement. |
(4) Other Benefits. Non-Qualified Deferred Compensation Plan
The Named Executive Officersnon-employee directors are eligible to participate in other health and welfare programs that are available to substantially all full-time salaried employees, includingournon-qualified deferred compensation plan, or the Company’s 401(k)deferred compensation plan.
Perquisites offered to the Named Executive Officers on an annual basis are financial planning and certain business club dues. These items create taxable income to the executive, which we do not gross up. In addition, we may ask Named Executive Officers and their spouses to participate in President’s Club/Chairman’s Club trips offered as rewards to certain other employees for excellent sales or other performance. Tax rules require that we treat the expenses of spouses as taxable income to the executives. Because spousal participation Ms. Marshall is at the request of the Company and can be disruptive to other plans they may have, we gross-up that taxable income.
The Named Executive Officers are also eligible to participate in the Company’s Non-Qualified Deferred Compensation Plan, pursuant to which they may elect to defer up to 100% of base salary and other forms of compensation. The Company does not make contributions to the DC Plan. In fiscal year 2012, Mr. Sloan was the only named executive officercurrent director who participated in the plan. The section entitled “Nonqualified Deferred Compensation” includes more detail regarding the plan.
(5) 2013 Compensation Decisions. The Committee did not increase 2013 base salaries for the Named Executive Officers other than Mr. Schuessler who has been promoted as of August 1, 2012. Additionally, only modest target bonus and equity increases were provided for 2013 for certain executives, consistent with our view toward external market alignment.
We offer employment agreements to a limited number of key employees, including all of the Named Executive Officers. These employment agreements provide benefits to the Company and, we believe, are necessary in order to retain
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and attract highly-qualified executives. Each of the Named Executive Officers who is a party to an employment agreement has agreed not to disclose confidential information or compete with us, and not to solicit our customers or recruit our employees, for a period of twenty four months following the termination of his or her employment. In exchange, we offer limited income and benefit protections to the executive. The section entitled “Potential Payments Upon Termination or Change in Control” includes more detail regarding the benefits.
Employment contracts signed prior to April 1, 2010 provide a gross-up for excise taxes that may be due with respect to any change of control provisions. Employment contracts signed after April 1, 2010 do not include such provisions. Also, all new employment agreements have a defined term. The section entitled “Potential Payments Upon Termination or Change in Control” includes more detail regarding the employment agreements for the Named Executive Officers.
Our current policy regarding the timing of equity grants, which has been in place for several years, is to make the annual grant to all eligible employees on the next business day following the filing of our annual report on Form 10-K based upon the closing price of the Common Stock on that day.
Our insider trading policy prohibits directors and employees from engaging in any transaction in which they profit if the value of the Company’s Common Stock falls.
The Compensation Committee has implemented stock ownership guidelines for executives and directors. This fosters Common Stock ownership and aligns the interests of our executives with our shareholders. Within five years of the later of (1) June 1, 2007 or (2) the executive’s initial appointment to his or her position, each executive should own shares valued as a percentage of base salary as follows: CEO—5 times base salary, and the other executives—2 times base salary. Within three years of becoming a director, each director should own a number of shares of Company stock valued at least three times the then current annual cash retainer payable to such director.
The Compensation Committee anticipates fully complying with mandatory recoupment provisions of the Dodd-Frank Act at such time as they are implemented by SEC rule making.
Section 162(m) of the Code places a limit of $1,000,000 on the amount of compensation that we may deduct in any one year with respect to any one of our Named Executive Officers. However, qualifying performance-based compensation will not be subject to the deduction limit if certain requirements are met. We have designed our incentive programs such that we expect to achieve full deductibility for them. To maintain flexibility in compensating our executives, however, the Compensation Committee reserves the right to use its judgment to authorize compensation payments that may be subject to the limit when the Compensation Committee believes that such payments are appropriate.
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the foregoing section entitled “Compensation Discussion and Analysis” with management. Based on such review and discussion, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement, which is to be incorporated by reference into our annual report on Form 10-K for fiscal year 2012.
COMPENSATION COMMITTEE
Edwin H. Burba, Jr., Chairperson
Alex W. Hart
William I Jacobs
Raymond L. Killian
Ruth Ann Marshall
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COMPENSATION TABLES AND NARRATIVES
The following table presents certain summary information concerning compensation paid or accrued by the Company for services rendered in all capacities during the fiscal year ended May 31, 2012 (“2012 fiscal year”), during the fiscal year ended May 31, 2011 (“2011 fiscal year”), and during the fiscal year ended May 31, 2010 (“2010 fiscal year”), for (i) the principal executive officer of the Company; (ii) the principal financial officer of the Company, and (iii) each of the three other most highly compensated executive officers of the Company who were acting as executive officers at the end of the last completed fiscal year. The persons referenced in (i) through (iii) above are our “Named Executive Officers.”
SUMMARY COMPENSATION TABLE
Name and Principal Position | FY | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($) (2) | Non-Equity Incentive Plan Comp ($) | Change in Pension Value and Nonqualified Deferred Comp Earnings ($) (5) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||||||||||
Paul Garcia | 2012 | $ | 1,000,000 | — | $ | 4,444,525 | — | $ | 1,420,067 | — | $ | 32,905 | 3 | $ | 6,897,497 | |||||||||||||||||||||||||||||
2011 | $ | 1,000,000 | — | $ | 2,916,676 | $ | 663,550 | $ | 1,153,991 | — | $ | 32,467 | $ | 5,766,684 | ||||||||||||||||||||||||||||||
2010 | $ | 950,000 | — | $ | 2,666,704 | $ | 649,099 | $ | 1,153,000 | — | $ | 38,443 | $ | 5,457,246 | ||||||||||||||||||||||||||||||
Jeffrey Sloan | 2012 | $ | 618,000 | — | $ | 1,277,820 | — | $ | 490,669 | — | $ | 27,970 | 3 | $ | 2,414,459 | |||||||||||||||||||||||||||||
2011 | $ | 600,000 | — | $ | 2,072,000 | $ | 322,011 | $ | 492,019 | — | $ | 2,391,626 | $ | 5,877,656 | ||||||||||||||||||||||||||||||
2010 | — | 4 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
David Mangum | 2012 | $ | 530,000 | — | $ | 1,277,820 | — | $ | 421,956 | — | $ | 27,734 | 3 | $ | 2,257,510 | |||||||||||||||||||||||||||||
2011 | $ | 450,000 | $ | 94,568 | $ | 750,020 | $ | 170,635 | $ | 325,950 | — | $ | 26,407 | $ | 1,817,580 | |||||||||||||||||||||||||||||
2010 | $ | 400,000 | — | $ | 708,371 | $ | 172,419 | $ | 299,000 | — | $ | 16,868 | $ | 1,596,658 | ||||||||||||||||||||||||||||||
Joseph Hyde | 2012 | $ | 425,000 | — | $ | 833,382 | — | $ | 294,307 | — | $ | 33,745 | 3 | $ | 1,586,434 | |||||||||||||||||||||||||||||
2011 | $ | 412,000 | — | $ | 562,533 | $ | 127,979 | $ | 280,477 | — | $ | 292,645 | $ | 1,675,634 | ||||||||||||||||||||||||||||||
2010 | $ | 400,000 | $ | 85,000 | $ | 562,512 | $ | 136,922 | $ | 279,000 | — | $ | 284,643 | $ | 1,748,077 | |||||||||||||||||||||||||||||
Morgan Schuessler | 2012 | $ | 350,000 | — | $ | 777,839 | — | $ | 191,741 | — | $ | 24,776 | 3 | $ | 1,344,356 | |||||||||||||||||||||||||||||
2011 | $ | 340,000 | — | $ | 437,505 | $ | 99,538 | $ | 179,759 | — | $ | 24,331 | $ | 1,081,133 | ||||||||||||||||||||||||||||||
2010 | $ | 325,000 | — | $ | 395,859 | $ | 99,360 | $ | 178,000 | — | $ | 26,198 | $ | 1,024,417 |
39
ALL OTHER COMPENSATION FOR FISCAL YEAR 2012
Garcia | Sloan | Mangum | Hyde | Schuessler | ||||||||||||||||
Defined Contribution Company Match | $ | 10,000 | $ | 10,000 | $ | 11,154 | $ | 9,928 | $ | 9,969 | ||||||||||
Financial Planning | $ | 20,565 | $ | 16,580 | $ | 16,580 | $ | 12,375 | ||||||||||||
Attendance at Company’s President’s Club/Chairman’s Club Award Trip | $ | 939 | ||||||||||||||||||
Club Dues | $ | 2,340 | $ | 2,432 | ||||||||||||||||
Tax Services Related to a foreign assignment | $ | 16,905 | ||||||||||||||||||
Tax Gross up Payments (*) | $ | 451 | $ | 7,722 | ||||||||||||||||
Total | $ | 32,905 | $ | 27,970 | $ | 27,734 | $ | 33,745 | $ | 24,776 |
All amounts in the table above reflect the aggregate incremental cost to the Company of providing the benefit.
The following table sets forth information concerning grants of plan-based awards during the 2012 fiscal year to the Named Executive Officers, all of which were made pursuant to the Amended and Restated 2005 Incentive Plan.
40
GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR 2012
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards | Grant Date Fair Value of Stock and Option Awards (4) | ||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Max. ($) | Threshold (#) | Target (#) | Max. (#) |
| ||||||||||||||||||||||
($) | ||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (l) | ||||||||||||||||||||||
Garcia | 7/26/11 | $ | 600,000 | $ | 1,500,000 | $ | 3,000,000 | Not applicable | ||||||||||||||||||||||
34,479 | (2) | 68,957 | (2) | 137,914 | (2) | $ | 3,333,381 | |||||||||||||||||||||||
11,493 | (3) | 22,986 | (3) | 45,972 | (3) | $ | 1,111,143 | |||||||||||||||||||||||
Sloan | 7/26/11 | $ | 183,855 | $ | 525,300 | $ | 945,540 | Not applicable | ||||||||||||||||||||||
9,913 | (2) | 19,825 | (2) | 39,650 | (2) | $ | 958,340 | |||||||||||||||||||||||
3,305 | (3) | 6,609 | (3) | 13,218 | (3) | $ | 319,479 | |||||||||||||||||||||||
Mangum | 7/26/11 | $ | 157,675 | $ | 450,500 | $ | 810,900 | Not applicable | ||||||||||||||||||||||
9,913 | (2) | 19,825 | (2) | 39,650 | (2) | $ | 958,340 | |||||||||||||||||||||||
3,305 | (3) | 6,609 | (3) | 13,218 | (3) | $ | 319,479 | |||||||||||||||||||||||
Hyde | 7/26/11 | $ | 111,563 | $ | 318,750 | $ | 541,875 | Not applicable | ||||||||||||||||||||||
6,465 | (2) | 12,930 | (2) | 25,860 | (2) | $ | 625,036 | |||||||||||||||||||||||
2,155 | (3) | 4,310 | (3) | 8,620 | (3) | $ | 208,345 | |||||||||||||||||||||||
Schuessler | 7/26/11 | $ | 73,500 | $ | 210,000 | $ | 357,000 | Not applicable | ||||||||||||||||||||||
6,034 | (2) | 12,068 | (2) | 24,136 | (2) | $ | 583,367 | |||||||||||||||||||||||
2,012 | (3) | 4,023 | (3) | 8,046 | (3) | $ | 194,472 |
41
42
The following table provides the outstanding equity grants for each Named Executive Officer on May 31, 2012. The table includes outstanding equity grants from past years as well as current-year equity grants. Since the Company has not issued options pursuant to an equity incentive plan referred to in column (d), that column has been eliminated.
OUTSTANDING EQUITY AWARDS AT 2012 FISCAL YEAR-END
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable (1) | Number of Securities Underlying Unexercised Options (#) Unexercisable (2) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(3) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#)(5) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(6) | ||||||||||||||||||||||||
(a) | (b) | (c) | (e) | (f) | (g) | (h) | (i) | (j) | ||||||||||||||||||||||||
Paul Garcia | 200,000 | 0 | $ | 18.235 | 6/3/2012 | 88,666 | $ | 3,766,532 |
| 68,957 and 22,986 |
| $ | 3,905,739 | |||||||||||||||||||
140,000 | 0 | $ | 16.905 | 8/7/2013 | ||||||||||||||||||||||||||||
154,000 | 0 | $ | 23.350 | 6/1/2014 | ||||||||||||||||||||||||||||
180,000 | 0 | $ | 31.575 | 7/19/2015 | ||||||||||||||||||||||||||||
65,000 | 0 | $ | 45.860 | 6/2/2016 | ||||||||||||||||||||||||||||
41,544 | 0 | $ | 37.400 | 7/31/2017 | ||||||||||||||||||||||||||||
29,635 | 9,878 | $ | 44.290 | 7/31/2018 | ||||||||||||||||||||||||||||
23,708 | 23,708 | $ | 42.180 | 7/29/2019 | ||||||||||||||||||||||||||||
14,623 | 43,867 | $ | 37.400 | 7/29/2020 | ||||||||||||||||||||||||||||
Total | 848,510 | 77,453 | — | — | ||||||||||||||||||||||||||||
Jeffrey Sloan | 6,250 | 18,750 | $ | 41.44 | 6/1/2020 | 37,500 | $ | 1,593,000 |
| 19,825 and 6,609 |
| $ | 1,122,916 | |||||||||||||||||||
Total | 6250 | 18750 | — | — | ||||||||||||||||||||||||||||
David Mangum | 15,000 | 5,000 | $ | 42.030 | 11/3/2018 | 25,552 | $ | 1,085,449 |
| 19,825 and 6,609 |
| $ | 1,122,916 | |||||||||||||||||||
6,298 | 6,297 | $ | 42.180 | 7/29/2019 | ||||||||||||||||||||||||||||
3,760 | 11,281 | $ | 37.400 | 7/29/2020 | ||||||||||||||||||||||||||||
Total | 25,058 | 22,578 | — | — | ||||||||||||||||||||||||||||
Joseph Hyde | 17,000 | 0 | $ | 45.860 | 6/2/2016 | 17,834 | $ | 757,588 |
| 12,930 and 4,310 |
| $ | 732,355 | |||||||||||||||||||
8,864 | 0 | $ | 37.400 | 7/31/2017 | ||||||||||||||||||||||||||||
7,039 | 2,346 | $ | 44.290 | 7/31/2018 | ||||||||||||||||||||||||||||
5,002 | 5,000 | $ | 42.180 | 7/29/2019 | ||||||||||||||||||||||||||||
2,820 | 8,461 | $ | 37.400 | 7/29/2020 | ||||||||||||||||||||||||||||
Total | 40,725 | 15,807 | — | — | ||||||||||||||||||||||||||||
Morgan Schuessler | 10,000 | 0 | $ | 45.860 | 6/2/2016 | 13,135 | $ | 557,975 |
| 12,068 and 4,023 |
| $ | 683,546 | |||||||||||||||||||
4,986 | 0 | $ | 37.400 | 7/31/2017 | ||||||||||||||||||||||||||||
3,705 | 1,235 | $ | 44.290 | 7/31/2018 | ||||||||||||||||||||||||||||
3,520 | 3,519 | $ | 42.180 | 7/29/2019 | ||||||||||||||||||||||||||||
2,194 | 6,580 | $ | 37.400 | 7/29/2020 | ||||||||||||||||||||||||||||
Total | 24,405 | 11,334 |
43
Name | Grant Date | Vest Date | Plan | Shares | Price | |||||||||||||||
Garcia, Paul | 6/3/2002 | 6/3/2004 | 2000 | 40,000 | $ | 18.235 | ||||||||||||||
6/3/2002 | 6/3/2005 | 2000 | 50,000 | $ | 18.235 | |||||||||||||||
6/3/2002 | 6/3/2006 | 2000 | 50,000 | $ | 18.235 | |||||||||||||||
6/3/2002 | 6/3/2007 | 2000 | 60,000 | $ | 18.235 | |||||||||||||||
8/7/2003 | 8/7/2004 | 2000 | 35,000 | $ | 16.905 | |||||||||||||||
8/7/2003 | 8/7/2005 | 2000 | 35,000 | $ | 16.905 | |||||||||||||||
8/7/2003 | 8/7/2006 | 2000 | 35,000 | $ | 16.905 | |||||||||||||||
8/7/2003 | 8/7/2007 | 2000 | 35,000 | $ | 16.905 | |||||||||||||||
6/1/2004 | 6/1/2005 | 2000 | 38,500 | $ | 23.350 | |||||||||||||||
6/1/2004 | 6/1/2006 | 2000 | 38,500 | $ | 23.350 | |||||||||||||||
6/1/2004 | 6/1/2007 | 2000 | 38,500 | $ | 23.350 | |||||||||||||||
6/1/2004 | 6/1/2008 | 2000 | 38,500 | $ | 23.350 | |||||||||||||||
7/19/2005 | 7/19/2006 | 2005 | 45,000 | $ | 31.575 | |||||||||||||||
7/19/2005 | 7/19/2007 | 2005 | 45,000 | $ | 31.575 | |||||||||||||||
7/19/2005 | 7/19/2008 | 2005 | 45,000 | $ | 31.575 | |||||||||||||||
7/19/2005 | 7/19/2009 | 2005 | 45,000 | $ | 31.575 | |||||||||||||||
6/2/2006 | 6/2/2007 | 2005 | 16,250 | $ | 45.860 | |||||||||||||||
6/2/2006 | 6/2/2008 | 2005 | 16,250 | $ | 45.860 | |||||||||||||||
6/2/2006 | 6/2/2009 | 2005 | 16,250 | $ | 45.860 | |||||||||||||||
6/2/2006 | 6/2/2010 | 2005 | 16,250 | $ | 45.860 | |||||||||||||||
7/31/2007 | 7/31/2008 | 2005 | 10,386 | $ | 37.400 | |||||||||||||||
7/31/2007 | 7/31/2009 | 2005 | 10,386 | $ | 37.400 | |||||||||||||||
7/31/2007 | 7/31/2010 | 2005 | 10,386 | $ | 37.400 | |||||||||||||||
7/31/2007 | 7/31/2011 | 2005 | 10,386 | $ | 37.400 | |||||||||||||||
7/31/2008 | 7/31/2009 | 2005 | 9,879 | $ | 44.290 | |||||||||||||||
7/31/2008 | 7/31/2010 | 2005 | 9,878 | $ | 44.290 | |||||||||||||||
7/31/2008 | 7/31/2011 | 2005 | 9,878 | $ | 44.290 | |||||||||||||||
7/29/2009 | 7/29/2010 | 2005 | 11,854 | $ | 42.180 | |||||||||||||||
7/29/2009 | 7/29/2011 | 2005 | 11,854 | $ | 42.180 | |||||||||||||||
7/29/2010 | 7/29/2011 | 2005 | 14,623 | $ | 37.400 | |||||||||||||||
Total outstanding options vested on or before 5/31/12 | 848,510 | |||||||||||||||||||
Name | Grant Date | Vest Date | Plan | Shares | Price | |||||||||||||||
Sloan, Jeffrey | 6/1/2010 | 6/1/2011 | 2005 | 6,250 | $ | 41.44 | ||||||||||||||
Total outstanding options vested on or before 5/31/12 | 6,250 | |||||||||||||||||||
Name | Grant Date | Vest Date | Plan | Shares | Price | |||||||||||||||
Mangum, David | 11/3/2008 | 11/3/2009 | 2005 | 5,000 | $ | 42.030 | ||||||||||||||
11/3/2008 | 11/3/2010 | 2005 | 5,000 | $ | 42.030 | |||||||||||||||
11/3/2008 | 11/3/1011 | 2005 | 5,000 | $ | 42.030 | |||||||||||||||
7/29/2009 | 7/29/2010 | 2005 | 3,149 | $ | 42.180 | |||||||||||||||
7/29/2009 | 7/29/2011 | 2005 | 3,149 | $ | 42.180 | |||||||||||||||
7/29/2010 | 7/29/2011 | 2005 | 3,760 | $ | 37.400 | |||||||||||||||
Total outstanding options vested on or before 5/31/12 | 25,058 |
44
Name | Grant Date | Vest Date | Plan | Shares | Price | |||||||||||||||
Hyde, Joseph | 6/2/2006 | 6/2/2007 | 2005 | 4,250 | $ | 45.860 | ||||||||||||||
6/2/2006 | 6/2/2008 | 2005 | 4,250 | $ | 45.860 | |||||||||||||||
6/2/2006 | 6/2/2009 | 2005 | 4,250 | $ | 45.860 | |||||||||||||||
6/2/2006 | 6/2/2010 | 2005 | 4,250 | $ | 45.860 | |||||||||||||||
7/31/2007 | 7/31/2008 | 2005 | 2,216 | $ | 37.400 | |||||||||||||||
7/31/2007 | 7/31/2009 | 2005 | 2,216 | $ | 37.400 | |||||||||||||||
7/31/2007 | 7/31/2010 | 2005 | 2,216 | $ | 37.400 | |||||||||||||||
7/31/2007 | 7/31/2011 | 2005 | 2,216 | $ | 37.400 | |||||||||||||||
7/31/2008 | 7/31/2009 | 2005 | 2,347 | $ | 44.290 | |||||||||||||||
7/31/2008 | 7/31/2010 | 2005 | 2,346 | $ | 44.290 | |||||||||||||||
7/31/2008 | 7/31/2011 | 2005 | 2,346 | $ | 44.290 | |||||||||||||||
7/29/2009 | 7/29/2010 | 2005 | 2,501 | $ | 42.180 | |||||||||||||||
7/29/2009 | 7/29/2011 | 2005 | 2,501 | $ | 42.180 | |||||||||||||||
7/29/2010 | 7/29/2011 | 2005 | 2,820 | $ | 37.400 | |||||||||||||||
Total outstanding options vested on or before 5/31/12 | 40,725 | |||||||||||||||||||
Name | Grant Date | Vest Date | Plan | Shares | Price | |||||||||||||||
Schuessler, Morgan | 6/2/2006 | 6/2/2007 | 2005 | 2,500 | $ | 45.860 | ||||||||||||||
6/2/2006 | 6/2/2008 | 2005 | 2,500 | $ | 45.860 | |||||||||||||||
6/2/2006 | 6/2/2009 | 2005 | 2,500 | $ | 45.860 | |||||||||||||||
6/2/2006 | 6/2/2010 | 2005 | 2,500 | $ | 45.860 | |||||||||||||||
7/31/2007 | 7/31/2008 | 2005 | 1,247 | $ | 37.400 | |||||||||||||||
7/31/2007 | 7/31/2009 | 2005 | 1,247 | $ | 37.400 | |||||||||||||||
7/31/2007 | 7/31/2010 | 2005 | 1,246 | $ | 37.400 | |||||||||||||||
7/31/2007 | 7/31/2011 | 2005 | 1,246 | $ | 37.400 | |||||||||||||||
7/31/2008 | 7/31/2009 | 2005 | 1,235 | $ | 44.290 | |||||||||||||||
7/31/2008 | 7/31/2010 | 2005 | 1,235 | $ | 44.290 | |||||||||||||||
7/31/2008 | 7/31/2011 | 2005 | 1,235 | $ | 44.290 | |||||||||||||||
7/29/2009 | 7/29/2010 | 2005 | 1,760 | $ | 42.180 | |||||||||||||||
7/29/2009 | 7/29/2011 | 2005 | 1,760 | $ | 42.180 | |||||||||||||||
7/29/2010 | 7/29/2011 | 2005 | 2,194 | $ | 37.400 | |||||||||||||||
Total outstanding options vested on or before 5/31/12 | 24,405 |
45
Name | Grant Date | Vest Date | Plan | Shares | Price | |||||||||||||||
Garcia, Paul | 7/31/2008 | 7/31/2012 | 2005 | 9,878 | $ | 44.290 | ||||||||||||||
7/29/2009 | 7/29/2012 | 2005 | 11,854 | $ | 42.180 | |||||||||||||||
7/29/2009 | 7/29/2013 | 2005 | 11,854 | $ | 42.180 | |||||||||||||||
7/29/2010 | 7/29/2012 | 2005 | 14,623 | $ | 37.400 | |||||||||||||||
7/29/2010 | 7/29/2013 | 2005 | 14,623 | $ | 37.400 | |||||||||||||||
7/29/2010 | 7/29/2014 | 2005 | 14,622 | $ | 37.400 | |||||||||||||||
Total outstanding options which were unvested on 5/31/12 | 77,454 | |||||||||||||||||||
Name | Grant Date | Vest Date | Plan | Shares | Price | |||||||||||||||
Sloan, Jeffrey | 6/1/2010 | 6/1/2012 | 2005 | 6,250 | $ | 41.44 | ||||||||||||||
6/1/2010 | 6/1/2013 | 2005 | 6,250 | $ | 41.44 | |||||||||||||||
6/1/2010 | 6/1/2014 | 2005 | 6,250 | $ | 41.44 | |||||||||||||||
Total outstanding options which were unvested on 5/31/12 | 18,750 | |||||||||||||||||||
Name | Grant Date | Vest Date | Plan | Shares | Price | |||||||||||||||
Mangum, David | 11/3/2008 | 11/3/2012 | 2005 | 5,000 | $ | 42.030 | ||||||||||||||
7/29/2009 | 7/29/2012 | 2005 | 3,149 | $ | 42.180 | |||||||||||||||
7/29/2009 | 7/29/2013 | 2005 | 3,148 | $ | 42.180 | |||||||||||||||
7/29/2010 | 7/29/2012 | 2005 | 3,760 | $ | 37.400 | |||||||||||||||
7/29/2010 | 7/29/2013 | 2005 | 3,760 | $ | 37.400 | |||||||||||||||
7/29/2010 | 7/29/2014 | 2005 | 3,761 | $ | 37.400 | |||||||||||||||
Total outstanding options which were unvested on 5/31/12 | 22,578 | |||||||||||||||||||
Name | Grant Date | Vest Date | Plan | Shares | Price | |||||||||||||||
Hyde, Joseph | 7/31/2008 | 7/31/2012 | 2005 | 2,346 | $ | 44.290 | ||||||||||||||
7/29/2009 | 7/29/2012 | 2005 | 2,500 | $ | 42.180 | |||||||||||||||
7/29/2009 | 7/29/2013 | 2005 | 2,500 | $ | 42.180 | |||||||||||||||
7/29/2010 | 7/29/2012 | 2005 | 2,820 | $ | 37.400 | |||||||||||||||
7/29/2010 | 7/29/2013 | 2005 | 2,820 | $ | 37.400 | |||||||||||||||
7/29/2010 | 7/29/2014 | 2005 | 2,821 | $ | 37.400 | |||||||||||||||
Total outstanding options which were unvested on 5/31/12 | 15,807 | |||||||||||||||||||
Name | Grant Date | Vest Date | Plan | Shares | Price | |||||||||||||||
Schuessler, Morgan | 7/31/2008 | 7/31/2012 | 2005 | 1,235 | $ | 44.290 | ||||||||||||||
7/29/2009 | 7/29/2012 | 2005 | 1,760 | $ | 42.180 | |||||||||||||||
7/29/2009 | 7/29/2013 | 2005 | 1,759 | $ | 42.180 | |||||||||||||||
7/29/2010 | 7/29/2012 | 2005 | 2,194 | $ | 37.400 | |||||||||||||||
7/29/2010 | 7/29/2013 | 2005 | 2,193 | $ | 37.400 | |||||||||||||||
7/29/2010 | 7/29/2014 | 2005 | 2,193 | $ | 37.400 | |||||||||||||||
Total outstanding options which were unvested on 5/31/12 | 11,334 |
46
Name | Grant Date | Plan | Vest Date | Shares | ||||||||||||
Garcia, Paul | 7/31/2009 | 2005 | 7/31/2012 | 4,830 | ||||||||||||
7/29/2009 | 2005 | 7/29/2012 | 14,334 | |||||||||||||
7/29/2009 | 2005 | 7/29/2013 | 14,334 | |||||||||||||
7/29/2010 | 2005 | 7/29/2012 | 18,389 | |||||||||||||
7/29/2010 | 2005 | 7/29/2013 | 18,389 | |||||||||||||
7/29/2010 | 2005 | 7/29/2014 | 18,389 | |||||||||||||
88,666 Total | ||||||||||||||||
Sloan, Jeffrey | 6/1/2010 | 2005 | 6/1/2012 | 12,500 | ||||||||||||
6/1/2010 | 2005 | 6/1/2013 | 12,500 | |||||||||||||
6/1/2010 | 2005 | 6/1/2014 | 12,500 | |||||||||||||
37,500 Total | ||||||||||||||||
Mangum, David | 11/3/2008 | 2005 | 11/3/2012 | 3,750 | ||||||||||||
7/29/2009 | 2005 | 7/29/2012 | 3,808 | |||||||||||||
7/29/2009 | 2005 | 7/29/2013 | 3,807 | |||||||||||||
7/29/2010 | 2005 | 7/29/2012 | 4,729 | |||||||||||||
7/29/2010 | 2005 | 7/29/2013 | 4,729 | |||||||||||||
7/29/2010 | 2005 | 7/29/2014 | 4,729 | |||||||||||||
25,552 Total | ||||||||||||||||
Hyde, Joseph | 7/31/2009 | 2005 | 7/31/2012 | 1,147 | ||||||||||||
7/29/2009 | 2005 | 7/29/2012 | 3,024 | |||||||||||||
7/29/2009 | 2005 | 7/29/2013 | 3,023 | |||||||||||||
7/29/2010 | 2005 | 7/29/2012 | 3,547 | |||||||||||||
7/29/2010 | 2005 | 7/29/2013 | 3,547 | |||||||||||||
7/29/2010 | 2005 | 7/29/2014 | 3,546 | |||||||||||||
17,834 Total | ||||||||||||||||
Schuessler, Morgan | 7/31/2009 | 2005 | 7/31/2012 | 604 | ||||||||||||
7/29/2009 | 2005 | 7/29/2012 | 2,128 | |||||||||||||
7/29/2009 | 2005 | 7/29/2013 | 2,128 | |||||||||||||
7/29/2010 | 2005 | 7/29/2012 | 2,759 | |||||||||||||
7/29/2010 | 2005 | 7/29/2013 | 2,758 | |||||||||||||
7/29/2010 | 2005 | 7/29/2014 | 2,758 | |||||||||||||
13,135 Total |
47
The following table provides information on options exercised and stock awards that vested in fiscal year 2012. The shares shown as acquired on exercise or on vesting represent shares of the Company’s Common Stock.
2012 OPTION EXERCISES AND STOCK VESTED
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (2) | ||||||||||||
(a) | (b) | (c) | (d) | (e) | ||||||||||||
Paul Garcia | 0 | 0 | 55,784 | $ | 2,657,482 | |||||||||||
Jeffrey Sloan | 0 | 0 | 12,500 | $ | 649,500 | |||||||||||
David Mangum | 0 | 0 | 12,287 | $ | 581,094 | |||||||||||
Joseph Hyde | 14,750 | $ | 243,005 | 11,606 | $ | 552,803 | ||||||||||
Morgan Schuessler | 0 | 0 | 7,678 | $ | 365,920 |
The Named Executive Officers are eligible to participate in the Company’s Non-Qualified Deferred Compensation Plan, or “DC Plan.” Mr. Sloan is the only named executive officer who participated in the DC plan during fiscal 2012.2019. Pursuant to the DC Plan, participantsdeferred compensation plan,non-employee directors are permitted to elect to defer up to 100% of base salary and other forms oftheir annual cash compensation (such as cash incentive bonus).retainer. Participant accounts are credited with earnings based on the participant’s investment allocation among a menu of investment options selected by the DC Plandeferred compensation plan administrator. Participants are 100% vested in the participant deferrals and related earnings. The Company doesWe do not make contributions to the DC Plandeferred compensation plan and doesdo not guarantee any return on participant account balances. Participants may allocate their plan accounts intosub-accounts that are payable upon separation from service or on designated specified dates. Except in the case of death or disability, participants may elect in advance to have their various account balances pay out in a single lump sum or in installments over a period of two to ten years. In the event a participant separates from service by reason of death or disability, the participant or his or her designated beneficiary will receive the undistributed portion of his or her account balances in alump-sum payment. Subject to approval by the DC Plandeferred compensation plan administrator, in the event of an unforeseen financial emergency beyond the participant’s control, a participant may request a withdrawal from an account up to the amount necessary to satisfy the emergency (provided the participant does not have the financial resources to otherwise meet the hardship).
30 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
Target Stock Ownership Guidelines
Our board of directors has implemented stock ownership guidelines for our directors in order to foster equity ownership and align the interests of our directors with our shareholders. Within five years of becoming a director, each director is expected to beneficially own a number of shares of our common stock at least equal in value to 500% of the director’s annual cash retainer.
Contacting Our Board of Directors
Any interested party may contact any individual director, ournon-employee or independent directors as a group, or all of our directors by directing such communications to the applicable directors in care of the Corporate Secretary at our address at 3550 Lenox Road, Suite 3000, Atlanta, Georgia 30326. Any correspondence received by the Corporate Secretary in accordance with the foregoing will be forwarded to the applicable director or directors.
48GLOBAL PAYMENTS INC. |2020 Proxy Statement– 31
Common Stock Ownership by Management
The following table providessets forth information as of February 14, 2020 with respect to the beneficial ownership of our common stock by (i) each of our directors, (ii) each of our NEOs, and (iii) the 16 persons, as a group, who were directors or NEOs of our Company on deferred compensation under the DC Plan for each Named Executive Officer during fiscal 2012.
NON-QUALIFIED DEFERRED COMPENSATIONFebruary 14, 2020.
Name | Executive Contributions in Last FY (1) | Registrant Contributions in Last FY | Aggregate Earnings in Last FY (2) | Aggregate Withdrawals / Distributions | Aggregate Balance at Last FYE (3) | |||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | |||||||||||||||
Paul Garcia | — | — | — | — | — | |||||||||||||||
Jeffrey Sloan | $ | 42,424.41 | — | ($ | 1,379.62 | ) | — | $ | 54,137.44 | |||||||||||
David Mangum | — | — | — | — | — | |||||||||||||||
Joseph Hyde | — | — | — | — | — | |||||||||||||||
Morgan Schuessler | — | — | — | — | — |
Name and Address of Beneficial Owner(1) | Shares Beneficially Owned(2) | Shares Issuable Upon Exercise of Stock Options(3) | Total | Percentage of Class | ||||||||||||||||
Named Executive Officers: | ||||||||||||||||||||
Jeffrey S. Sloan | 432,388 | (4) | 229,996 | 662,384 | * | |||||||||||||||
Cameron M. Bready | 99,399 | 45,284 | 144,683 | * | ||||||||||||||||
Paul M. Todd | 84,862 | 101,859 | 186,721 | * | ||||||||||||||||
Guido F. Sacchi | 34,662 | 31,629 | 66,291 | * | ||||||||||||||||
David L. Green | 58,177 | 50,416 | 108,593 | * | ||||||||||||||||
Non-Employee Director and Director Nominees: | ||||||||||||||||||||
F. Thaddeus Arroyo | 2,379 | 4,822 | 7,201 | * | ||||||||||||||||
Robert H.B. Baldwin, Jr. | 36,397 | — | 36,397 | * | ||||||||||||||||
John G. Bruno | 12,763 | — | 12,763 | * | ||||||||||||||||
Kriss Cloninger III | 36,150 | 11,394 | 47,544 | * | ||||||||||||||||
William I Jacobs | 25,988 | 7,224 | 33,212 | * | ||||||||||||||||
Joia M. Johnson | 2,950 | 3,123 | 6,703 | * | ||||||||||||||||
Ruth Ann Marshall | 38,799 | 3,224 | 42,023 | * | ||||||||||||||||
Connie D. McDaniel | 10,683 | 17,106 | 27,789 | * | ||||||||||||||||
William B. Plummer | 4,792 | — | 4,792 | * | ||||||||||||||||
John T. Turner(5) | 542,340 | 45,014 | 587,354 | * | ||||||||||||||||
M. Troy Woods(6) | 580,602 | 76,274 | 656,876 | * | ||||||||||||||||
All Directors and Executive Officers as a Group | 2,003,331 | 627,365 | 2,630,696 | * |
Less than one percent. |
The address of each of the |
Includes the number of shares of common stock the person “beneficially owns,” as defined by SEC rules, other than shares issuable upon the exercise of options that are currently vested or that will vest within 60 days of February 14, 2020. Unless otherwise indicated, each person listed in the table possesses sole voting and investment power with respect to the common shares reported in this column |
Includes the number of |
(4) | Includes 11,960 shares held by a grantor retained annuity trust, of which Mr. Sloan disclaims beneficial ownership except to the extent of his pecuniary interest. |
(5) | Includes 539,836 shares of which the person has shared voting and investment power, of which Mr. Turner disclaims beneficial ownership except to the extent of his pecuniary interest. |
(6) | Includes 44,249 shares of which the person has shared voting and investment power, of which Mr. Woods disclaims beneficial ownership except to the extent of his pecuniary interest. |
32 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
Common Stock Ownership byNon-Management Shareholders
The following table sets forth information as of February 14, 2020 with respect to the only persons who are known by us, based exclusively on such persons’ filings with the SEC under Sections 13(d) and 13(g) of the Exchange Act, to be the beneficial owners of more than 5% of the outstanding shares of our common stock.
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Shares(1) | ||||||||
BlackRock, Inc.(2) | 20,578,958 | 6.8 | % | |||||||
T. Rowe Price Associates, Inc.(3) | 37,947,964 | 12.6 | % | |||||||
The Vanguard Group(4) | 23,995,318 | 7.98 | % |
(1) | Percentages calculated based on number of shares outstanding as of February 14, 2020. |
(2) | This information is contained in a Schedule 13G/A filed by Blackrock, Inc. with the SEC on February 5, 2020. Blackrock, Inc. reported sole dispositive power of all shares listed above and sole voting power of 18,087,288 of the shares listed above. The address of Blackrock, Inc. is 40 East 52nd Street, New York, NY 10022. |
(3) | This information is contained in a Schedule 13G/A filed by T. Rowe Price Associates, Inc. with the SEC on February 14, 2020. T. Rowe Price Associates, Inc. reported sole dispositive power for all shares listed above and sole voting power for 14,085,275 shares. The address of T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, MD 21202. |
(4) | This information is contained in a Schedule 13G/A filed by The Vanguard Group with the SEC on February 12, 2020. The Vanguard Group reported sole dispositive power for 23,470,179 shares, shared dispositive power for 525,139 shares, sole voting power for 464,710 shares, and shared voting power for 87,765 shares. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. |
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 33
Biographical Information About Our Named Executive Officers
Biographical and other information about each of our current NEOs is set forth below, except for Mr. Sloan, our Chief Executive Officer, whose biographical information is provided above under “Other Directors” beginning on page 16.
Name | Age | Current Position | Position with Global Payments and | |||||||||
Cameron M. Bready | 48 | President and Chief | President and Chief Operating Officer (since September 2019); Senior Executive Vice President and Chief Financial Officer (March 2017 – September 2019); Executive Vice President and Chief Financial Officer (June 2014-February 2017); Executive Vice President and Chief Financial Officer, ITC Holdings Corp., or ITC, a publicly-traded independent electric transmission company (February 2012 — June 2014); Executive Vice President, Treasurer and Chief Financial Officer, ITC (January 2011 — February 2012); Senior Vice President, Treasurer and Chief Financial Officer, ITC (2009 — January 2011). | |||||||||
Paul M. Todd | 49 | Senior Executive Vice | Senior Executive Vice President and Chief Financial Officer (since September 2019); Senior Executive Vice President and Chief Financial Officer of TSYS (July 2014 – September 2019); Executive Vice President of TSYS (2008-2014); President and Chief Executive Officer of Synovus Financial Management family of companies (2007-2008). | |||||||||
Dr. Guido F. Sacchi | 56 | Senior Executive Vice President and Chief Information | Senior Executive Vice President and Chief Information Officer (since March 2019); Executive Vice President and Chief Information Officer of the Company (August 2013 — March 2019); Chief Information Officer of the Company (June 2011 — August 2013); Managing Director, Digital Commerce, Slalom, LLC d/b/a Slalom Consulting, a consulting firm (April 2010 — May 2011); Chief Executive Officer, Moneta Corp., a consumer online payments company (2008 — 2010). | |||||||||
David L. Green | 52 | Senior Executive Vice | Senior Executive Vice President, General Counsel and Corporate Secretary (since September 2019); Executive Vice President, General Counsel and Corporate Secretary (since November 2013); Senior Vice President and Division General Counsel of the Company (November 2011 — November 2013); Vice President and Division General Counsel of the Company (2007 — November 2011). |
There are no arrangements or understandings between any of our NEOs and any other person pursuant to which any of them was appointed an officer, other than arrangements or understandings with our officers acting solely in their capacities as such.
The Company has adopted a Code of Ethics for Senior Financial Officers that is applicable to the Chief Executive Officer and the Chief Financial Officer, and an Employee Code of Conduct and Ethics that is applicable to all employees. The codes deter wrongdoing and promote honest and ethical conduct, compliance with laws, rules and regulations and internal reporting of possible legal or ethics violations. In 2011addition, the Company has adopted a Code of Conduct and Ethics applicable to directors. The Code of Ethics for Senior Financial Officers, the Employees Code of Conduct and Ethics and the Director Code of Conduct and Ethics are available on the Company’s website at:https://investors.globalpaymentsinc.com/corporate-governance.
34 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
Proposal Two: Advisory Vote to Approve the 2019 Compensation of Our Named Executive Officers
In accordance with Section 14A of the Exchange Act, our board of directors is asking shareholders to approve an advisory resolution on executive compensation. The advisory vote is anon-binding vote to approve the compensation of our NEOs in 2019. The vote, which is known as a“say-on-pay” vote, is intended to give our shareholders the opportunity to express their views on our NEOs’ compensation. The vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this proxy statement. At last year’s annual meeting of shareholders, approximately 78% of the votes cast were cast in support of the compensation of our NEOs. The text of the resolution is as follows:
Resolved, that the Company’s shareholders APPROVE, on an advisory basis, the compensation of the Company’s NEOs as disclosed in this proxy statement, including the Compensation Discussion and Analysis, the summary compensation table and related compensation tables and narrative discussion.
We urge you to read the Compensation Discussion and Analysis in this proxy statement, which discusses how our compensation policies and procedures implement our compensation philosophy. You should also read the summary compensation table and other related compensation tables and narrative disclosure which provide additional details about the compensation of our NEOs in 2019. We have designed our compensation and benefits program and philosophy to attract, retain and motivate talented, qualified and committed executive officers who share our philosophy and desire to work toward our goals. We believe that for 2019, our executive compensation program aligned individual compensation with the short-term and long-term performance of our Company in ways such as the following:
Pay opportunities were appropriate to the size of our Company when compared to peer companies.
Our compensation program was heavily performance-based, using multiple measures for short-term incentives.
Performance metrics under our short-term incentive plan are adjusted to reflect acquisitions that we make during the year.
Long-term incentives were linked to shareholder value through performance units, stock options and time-based restricted stock that change in value as share price fluctuates.
Performance units will result in an either increased or decreased payout multiple based on our total shareholder return performance rank relative to the S&P 500 index.
Perquisites are a minor part of our compensation program.
Excise taxgross-ups are not provided to any of our NEOs.
Our insider trading policy prohibits directors and employees from engaging in any transaction in which they profit if the value of our common stock falls.
Pursuant to our clawback policy, we may recoup the value of any annual or long-term incentive awards provided to any NEOs in the event that our financial statements are restated due to material noncompliance with any financial reporting requirement.
Change-in-control severance provisions in employment agreements are double trigger.
The Compensation Committee consideredengages independent compensation consultants.
The Compensation Committee certifies performance results for purposes of executive compensation.
We do notre-price or backdate stock options or issue discounted stock options.
We do not pay dividend equivalent rights with respect to performance units.
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 35
The vote regarding the compensation of the NEOs described in this Proposal No. 2 is advisory, and assessedtherefore, is not binding on us or our board. Althoughnon-binding, our board values the opinions that shareholders express in their votes and will review the voting results and take them into consideration as it deems appropriate when making future decisions regarding our executive compensation programs. Our board of directors has adopted a policy providing for an annualsay-on-pay vote. Unless our board of directors modifies this policy, the nextsay-on-pay vote will be held at our next annual shareholder meeting in 2021.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
“FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE 2019 COMPENSATION OF OUR
NEOs, AS DISCLOSED IN THIS PROXY STATEMENT.
36 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
Compensation Discussion and Analysis
Table of Contents
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Potential Payments upon Termination, Retirement or Change in Control | 59 |
We experienced strong business and financial performance around the world during the year ended December 31, 2019. Highlights related to our financial condition and results of operations as of December 31, 2019 and for the year then ended include the following:
Consolidated revenues were $4,911.9 million and $3,366.4 million for the years ended December 31, 2019 and 2018, respectively. Consolidated revenues increased by 45.9% from 2018 to 2019.
Consolidated operating income was $791.4 million for the year ended December 31, 2019 compared to $737.1 million for 2018. Our operating margin for the year ended December 31, 2019 was 16.1%, compared to 21.9% for the year ended December 31, 2018.
Net income attributable to Global Payments was $430.6 million for the year ended December 31, 2019 compared to $452.1 million for 2018, and diluted earnings per share was $2.16 for the year ended December 31, 2019 compared to $2.84 for 2018.
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 37
Over the12-month period from January 1, 2019 through December 31, 2019, our share price increased by approximately 78%, compared to an increase of approximately 28% in the S&P 500 index. Our share price from January 1, 2015 through December 31, 2019 relative to the performance of our peer group and the S&P 500 index, which we joined in April 2016, is shown in the graph below.
The following graph compares the cumulative shareholder returns of $100 invested in the S&P 500 Index, our Company and the average of our performance peer group from January 1, 2015 through December 31, 2019, assuming reinvestment of dividends.
Named Executive Officer Compensation Design, Elements and Pay Mix
The following charts show the mix of total target compensation in 2019 (reflecting the new compensation targets for base salary and short-term cash incentive set upon completion of the merger with TSYS) for our Chief Executive Officer and the average of the other NEOs, as well as the portion of compensation that is subject to forfeiture (“at risk”) or performance-based.
CEO TOTAL TARGET COMPENSATION | OTHER NEOs TOTAL TARGET COMPENSATION* | |
* | Excludes Mr. Todd, who joined the Company on September 18, 2019. |
Our compensation program is aligned with short- and long-term Company performance and reflects best practices to ensure sound corporate governance. As illustrated above, with the exception of base salary and time-based restricted stock awards, all target compensation is performance-based. NEOs are also subject to stock ownership guidelines, and the securities they are required to hold under those guidelines will continue to fluctuate with our share price.
2019 Compensation Highlights
The short-term cash incentives awarded under our annual performance plan incent and reward our NEOs for achievement of short-term goals aligned with our 2019 operating plan. The long-term incentive plan incents and
38 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
rewards our NEOs for achievement of long-term goals measured over a multi-year period. Together, these plans support our strategy of facilitating the adoption of, and transition to, card, electronic and digital-based payments by expanding our share in existing markets through our distribution channels, new products and services and acquisitions to improve our scale of offerings, while simultaneously seeking expansion into new markets through acquisitions around the world.
Short-Term Cash Incentives
The short-term cash incentives awarded under our annual performance plan are 100% based on achievement of Company performance goals, equally weighted among adjusted earnings per share, which we refer to as adjusted EPS, adjusted net revenue plus network fees and adjusted operating margin. For 2019, each of our NEOs earned 160% of his target under the annual performance plan. These performance goals are discussed below under “Compensation Discussion and Analysis — Short-Term Incentive Plan” beginning on page 44.
Long-Term Incentive Plan Awards
The Compensation Committee grants equity-based compensation to our NEOs, consisting of performance units, stock options and restricted stock, to provide long-term incentives and align management and shareholder interests.
Performance Units. Awards under our long-term incentive plan include performance-based restricted stock units, which we refer to as “performance units,” stock options and time-based restricted stock. The metrics under which performance units are earned are based on the achievement of an annual adjusted EPS growth target each year, with the results certified by the Compensation Committee each year of the performance period and averaged over a three-year performance period, and then modified up or down by the Company’s total shareholder return performance rank relative to the S&P 500 index, or the TSR modifier, at the end of the three-year performance period. The maximum possible payout is four times the target number of the performance units and the minimum payout is zero. To the extent earned, performance units convert into unrestricted shares after performance results for the three-year performance period are certified by the Compensation Committee.
Stock Options and Restricted Stock. Stock options and restricted stock vest in equal installments on each of the first three anniversaries of the respective grant dates. The value of each of the long-term incentive awards changes as our share price changes, thereby aligning the interests of our NEOs with those of our shareholders. Awards under our long-term incentive plan for 2019 are discussed below under “Compensation Discussion and Analysis — Long-Term Incentive Plan” beginning on page 46.
The following individuals are identified as NEOs pursuant to SEC rules for the purpose of describing our compensation for 2019:
Jeffrey S. Sloan, Chief Executive Officer;
Cameron M. Bready, President and Chief Operating Officer;
Paul M. Todd, Senior Executive Vice President and Chief Financial Officer;
Dr. Guido F. Sacchi, Senior Executive Vice President and Chief Information Officer; and
David L. Green, Senior Executive Vice President, General Counsel and Corporate Secretary.
The discussion below explains the detailed information provided in the tables contained in this section and places that information within the context of our overall compensation program. See “Compensation of Named Executive Officers” below for a series of tables containing specific information about the compensation earned or paid to the NEOs.
How Compensation Decisions Are Made
Objectives of Compensation Policies
Our Compensation Committee designs and at least annually reviews our compensation program with a view to retaining and attracting executive leadership of a caliber and level of experience necessary to manage our
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 39
complex, growth-oriented and global businesses. Our objective is to maintain a compensation program that will allow us to:
support the financial and business objectives of our organization;
attract, motivate and retain highly qualified executives;
create an environment where performance is expected and rewarded;
deliver an externally competitive and transparent total compensation structure; and
align the interests of our NEOs with our shareholders.
In order to achieve these results, our Compensation Committee believes our program must:
provide our NEOs with total compensation opportunities at levels that are competitive for comparable positions in a highly competitive industry;
provide variable,at-risk incentive award opportunities that are payable only if specific goals are achieved;
provide significant upside opportunities for outstanding performance;
align our NEOs’ interests with those of our shareholders by making stock-based incentives a core element of our NEOs’ compensation; and
protect our competitive position by prohibiting our NEOs from competing with our Company for a specified period of time following termination of employment.
Our Compensation Committee also considers and assesses potential risk and risk mitigation factors and potential risk aggravators in our compensation program andprogram. For 2019, our Compensation Committee concluded that our compensation practices are balanced, do not encourage excessive risk taking by our employees,NEOs, and are not reasonably likely to have a material adverse effect on our Company.
Role of the Company. AsIndependent Compensation Consultant
Our Compensation Committee retained Frederic W. Cook, Inc., or FWC, as its independent compensation consultant. The Compensation Committee assessed the only material changeindependence of FWC and whether its work raised any conflict of interest, taking into consideration the independence factors set forth in applicable SEC and NYSE rules, and determined that FWC is independent. FWC took guidance from and reported directly to employeethe Compensation Committee. FWC advised the Compensation Committee on current and future trends and issues in executive compensation plans for fiscal 2012 was the replacement of stock options with performance units based upon 3-year total shareholder return, the Committee reaffirms that conclusion. The determination was based, in part,and on the competitiveness of the compensation structure and levels of our NEOs during 2019. At the request of the Compensation Committee and to provide context for the Compensation Committee’s compensation decisions made for 2019, FWC performed the following factors:services:
UseConducted market reviews and analyses for our NEOs to determine whether their total targeted compensation opportunities were competitive with positions of a variety of performance measures, which diversifies the risk associated with any single measure;similar scope in similarly sized companies in similar industries;
Balanced weightingsPrepared tally sheets on our NEOs to allow the Compensation Committee to review the reasonableness of the various performance measures, which discourages excessive attentiontotal wealth accumulated during each executive’s tenure with our Company and to show the impact on one measure toour Company in the detrimentevent of others;
Payout caps;
A varietya termination of cash and equity-based incentives with different time horizons, which drives attention to both short and long term performance and creates alignment with both Company performance and shareholder interests;employment; and
Target stock ownership guidelines applicableAttended Compensation Committee meetings, as requested by the committee, to discuss these items.
All services performed for us by FWC during 2019 were related to executive andnon-employee director compensation.
40 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
Market Data
Our Compensation Committee considers the compensation programs and practices and resulting NEO compensation opportunities and levels of selected other companies to assist it in setting our NEOs’ compensation to ensure that it remains competitive. As a result of the merger with TSYS, the Compensation Committee, in consultation with FWC, revised our peer group to reflect the size, scale and complexity of the combined company. Our peer group for 2019 was updated to include the below listed companies. The companies in the peer group were chosen because (i) each company in the peer group is in the technology industry; (ii) each company in the peer group is publicly traded; (iii) at the time the peer group was constructed, our revenues and market cap were near the median of the group as a whole; and (iv) we compete for talent with many of these companies.
In connection with the Compensation Committee setting the NEO compensation for 2019, FWC collected and analyzed comprehensive market data. FWC presented market figures representing competitive ranges for base salary, target short-term incentive opportunity, and long-term incentive opportunity.
Role of Named Executive Officers
In 2019, our Chief Executive Officer developed compensation recommendations for the NEOs based on market data supplied by FWC, our Company’s performance relative to goals approved by the Compensation Committee and other individual contributions to our performance. FWC examined market data from our peer group and analyzed compensation for comparable positions to our NEOs. The Compensation Committee considered the Chief Executive Officer’s recommendations, in conjunction with the counsel of FWC and the market data, in determining the compensation elements for these NEOs. In considering the FWC report, the Compensation Committee primarily considered and reviewed the median level of compensation within the peer group. In setting actual compensation levels for our NEOs, however, the Compensation Committee did not target any element of compensation at a particular percentile or percentile range of the peer group data. Rather, the Compensation Committee uses this information as one input in its decision-making process. The Compensation Committee determined all aspects of Mr. Sloan’s compensation as Chief Executive Officer in consultation with FWC. Mr. Sloan did not participate in the Compensation Committee’s determination of his compensation.
ShareholderSay-on-Pay Vote for 2018 and Compensation Actions Taken
In 2019, we conducted an expansive shareholder outreach program to gauge support for our executive compensation practices, among other topics. Our management, together with the Chairman of the Compensation Committee, engaged with twenty of our top twenty-four shareholders, including both active and passive investors, representing approximately 65% of our total shares outstanding. The feedback we received from shareholders regarding our executive compensation program was positive, and the general shareholder feedback we received indicated that our investors did not have significant issues with either our program or the compensation mix of our Chief Executive Officer or any of our other officers. At last year’s annual meeting of shareholders, approximately 78% of the votes cast were cast in support of the compensation of our NEOs. The Compensation Committee considered this a positive result and concluded that the shareholders support the compensation paid to our NEOs and our overall pay practices. In light of this support, the Compensation Committee decided to retain the overall design of our executive compensation program.
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 41
The Compensation Committee will continue to monitor best practices, future advisory votes on executive compensation and other shareholder feedback to guide it in evaluating our NEOs compensation program. The Compensation Committee invites our shareholders to communicate any concerns or opinions on executive pay directly to our board of directors. Please refer to “Board and Corporate Governance — Contacting Our Board of Directors” on page 31 for information about communicating with the board of directors.
Elements of Executive Compensation Program
The following executive pay at target levels were approved in February 2019 by the Compensation Committee for 2019:
Name | Base Salary | % of Total | Target Short-Term Cash Incentive | % of Total | Target Equity | % of Total | Total | |||||||||||||||||||||
Jeffrey S. Sloan | $ | 1,000,000 | 7 | % | $ | 1,600,000 | 12 | % | $ | 11,000,000 | 81 | % | $ | 13,600,000 | ||||||||||||||
Cameron M. Bready | $ | 595,000 | 13 | % | $ | 654,500 | 15 | % | $ | 3,250,000 | 72 | % | $ | 4,499,500 | ||||||||||||||
Guido F. Sacchi | $ | 515,000 | 19 | % | $ | 515,000 | 19 | % | $ | 1,750,000 | 62 | % | $ | 2,780,000 | ||||||||||||||
David L. Green | $ | 510,000 | 22 | % | $ | 459,000 | 20 | % | $ | 1,325,000 | 58 | % | $ | 2,294,000 |
(1) | Total Long-Term Equity Incentives includes (i) performance units reflected at target; (ii) restricted stock awards; and (iii) stock options. |
The annual compensation program also includes other benefits, including limited perquisites andnon-qualified deferred compensation plan, as described below.
Compensation Actions Following Completion of Merger with TSYS
Adjustments to Base Salary and Short-Term Cash Incentive
Effective September 22, 2019, the Compensation Committee, in consultation with FWC, revised our peer group to reflect the size, scale and complexity of the combined company and, after considering, among other inputs, the market data on comparable positions provided by FWC from our revised peer group, approved the following adjustments to salary and the target short-term cash incentive for our NEOs, other than Mr. Sloan. The Compensation Committee did not increase any of the components of Mr. Sloan’s compensation following the merger with TSYS. The increases to base salary and target short-term incentive opportunities for the NEOs, other than Mr. Sloan, were prorated for the period between September 22, 2019 and December 31, 2019.
Name | Base Salary at the end of December 31, 2019 | Target Short-Term Cash Incentive the end of December 31, 2019 | ||||||||
Cameron M. Bready | $700,000 | $805,000 | ||||||||
Paul M. Todd | $680,000 | $714,000 | ||||||||
Guido F. Sacchi | $575,000 | $575,000 | ||||||||
David L. Green | $550,000 | $550,000 |
Synergy Awards
On September 18, 2019, we completed our transformative merger with TSYS. The purchase price for the merger exceeds all of our prior acquisitions combined. The Compensation Committee, with input from its independent consultant, adopted a synergy incentive program intended to award participants, including our NEOs, for achieving synergy goals in connection with this landmark transaction. The merger is expected to deliver cost and annualrun-rate revenue synergies primarily through combining business operations, aligninggo-to-market strategies, streamlining technology infrastructure, eliminating duplicative corporate and operational functions,
42 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
scale efficiencies, and cross-selling complementary technology solutions through the combined direct distribution network.
The program is designed to incentivize the participants to maximize synergies related to the merger. Aligning the synergy initiatives of the TSYS merger to the compensation of our key personnel, including our NEOs, will drive the achievement of the initiatives which, in turn, will increase the accretive nature of the transaction and create value for our shareholders, much as we did with the Heartland merger.
The awards to the NEOs are in the form of performance-based units that are eligible to vest based on achievement of cost and revenue synergy goals, as described below, over a three-year performance period. The grant date fair value of the synergy performance units is included in the Summary Compensation Table for the 2019 calendar year. The Compensation Committee further determined that, during the performance period for the synergy incentive program, it would include the value of the synergy performance units when determining annual NEO compensation.
Under the synergy incentive program, the performance units are earned based upon the achievement ofpre-established synergy goals set by our Compensation Committee for the three-year performance period from September 18, 2019 to September 18, 2022. The number of shares issued, if any, will be based on the Company’s achievement of target cost synergies of at least $350 million and target revenue synergies of at least $125 million. The resulting payout multiple for cost synergies and revenue synergies would be averaged together to determine the payout multiple applied to the target award, and will range from 0% to 200% of target for our Chief Executive Officer and 0% to 300% of target for our other NEOs. However, if target performance is not achieved for either cost synergies or revenue synergies, then the payout multiple applied to the target award will be capped at a maximum of 100% of target.
The following chart summarizes the target and maximum award opportunities pursuant to the synergy incentive program for each of our NEOs.
Name | Target | Target Number of Synergy Performance Units Granted(1) | Maximum Number of Synergy Performance Units | ||||||||||||
Jeffrey S. Sloan | $ | 4,500,000 | 27,381 | 54,762 | |||||||||||
Cameron M. Bready | $ | 4,000,000 | 24,339 | 73,017 | |||||||||||
Paul M. Todd | $ | 2,000,000 | 12,170 | 36,510 | |||||||||||
Guido F. Sacchi | $ | 2,000,000 | 12,170 | 36,510 | |||||||||||
David L. Green | $ | 2,000,000 | 12,170 | 36,510 |
(1) | Calculated as the target allocation of synergy performance units (in dollars) divided by our share price on the closing date of the TSYS merger ($164.35). |
Depending on the Compensation Committee’s certification of the achievement of the synergy goals as presented by an independent accounting firm, each of the NEOs may earn an award up to the maximum award set forth above. Achievement of synergies below target will result in zero payout. Achievement between target and maximum will result in a payout interpolated between the target and maximum payouts. Our Compensation Committee has the final authority to determine whether a specific item qualifies as cost savings under the synergy incentive program. Half of any earned synergy performance units will convert into unrestricted shares on September 18, 2022 and the remaining units will convert to unrestricted shares on September 18, 2023.
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 43
Base salary provides our NEOs with a level of compensation consistent with their responsibilities, experience and performance in relation to comparable positions in the marketplace. The Compensation Committee reviews the base salaries of our NEOs annually and may do so more frequently upon a change in circumstances.
Base salary represented 7% of our Chief Executive Officer’s total compensation target and 18% of the total compensation target for our other NEOs (on an average basis and excluding Mr. Todd who joined the Company on September 18, 2019). It is the one component of compensation that does not fluctuate with either our Company’s performance and/or the value of our stock. The base salaries for our NEOs in effect at the end of 2019, compared to their base salaries in effect at the end of 2018, are set forth below:
Name | Base Salary at the end of December 31, 2019 | 2018 | % Change | ||||||||||||
Jeffrey S. Sloan | $ | 1,000,000 | $ | 1,000,000 | 0 | % | |||||||||
Cameron M. Bready | $ | 700,000 | $ | 585,000 | 20 | % | |||||||||
Paul M. Todd | $ | 680,000 | — | — | |||||||||||
Guido F. Sacchi | $ | 575,000 | $ | 500,000 | 15 | % | |||||||||
David L. Green | $ | 550,000 | $ | 500,000 | 10 | % |
The Compensation Committee determined to increase the salaries of Messrs. Bready and Green and Dr. Sacchi in February 2019 after considering, among other inputs, market data on the median level of compensation for comparable positions, retention, internal equity, individual development and succession planning. The Compensation Committee also considered Mr. Sloan’s assessment of Messrs. Bready and Green and Dr. Sacchi.
In connection with the completion of the merger with TSYS in September 2019, the Compensation Committee engaged FWC to review the Company’s competitive peer group and to update its review and competitive assessment of the Company’s executive compensation program based on the updated peer group, if any. Based on such assessment, the Compensation Committee determined to revise the peer group as set forth on page 41, and increase the salaries of Messrs. Bready and Green and Dr. Sacchi again in September 2019. The Compensation Committee did not increase Mr. Sloan’s salary in 2019.
The Compensation Committee does not use a specific formula for evaluating the individual performance of each NEO. The Compensation Committee makes each assessment taking into consideration the competitiveness of each NEO’s pay opportunity, the quality and effectiveness of each NEO’s leadership and their respective contribution to the Company’s financial and operational success, as well as the totality of the executive’s performance.
Under our short-term incentive plan, we provide our NEOs with short-term incentive opportunities to motivate and reward them for the achievement of our defined business goals and objectives. Our short-term incentive plan provides an opportunity for NEOs to earn variableat-risk cash.
Target Bonus Opportunities
The Compensation Committee considers adjustments to target bonus opportunities on an annual basis and may do so more frequently upon a change in circumstances.
44 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
As discussed above, upon completion of the merger with TSYS, after review of the market data for bonus target opportunity and target total cash compensation opportunity for comparable positions with our peer group, as updated after the completion of the merger with TSYS, our Compensation Committee approved the following target bonus opportunities for each of the NEOs, expressed as a percentage of base salary. The Compensation Committee did not increase the target bonus opportunity of Mr. Sloan in 2019 following the completion of the merger with TSYS.
Target Bonus Opportunity(1) | % of Base Salary | |||||||||
Jeffrey S. Sloan | $ | 1,600,000 | 160 | % | ||||||
Cameron M. Bready | $ | 805,000 | 115 | % | ||||||
Paul M. Todd | $ | 714,000 | 105 | % | ||||||
Guido F. Sacchi | $ | 575,000 | 100 | % | ||||||
David. L. Green | $ | 550,000 | 100 | % |
(1) | Reflects annualized pay opportunity. Amounts paid with respect to the increase in target bonus opportunity approved in September 2019 were prorated for the period from September 22, 2019 through December 31, 2019. |
The Compensation Committee does not use a specific formula for evaluating the individual performance of each NEO. The Compensation Committee makes each assessment taking into consideration the quality and effectiveness of each NEO’s leadership and their respective contribution to the Company’s financial and operational success, as well as the totality of the executive’s performance.
Performance Metrics
For 2019, the Compensation Committee allocated the target opportunity under the short-term incentive plan evenly among the following three performance metrics: adjusted EPS, adjusted net revenue plus network fees and adjusted operating margin. See Appendix A to this proxy statement for a description of the calculation of these measures. We use these performance metrics to set goals for and to determine incentive compensation.
Because these performance metrics are calculated for the sole purpose of determining compensation, they may differ from similarnon-GAAP financial measures reported elsewhere in Company filings. For each of these separately-calculated performance metrics, each NEO could earn from 0% to 200% of the target opportunity.
Degree of Performance Attainment | Adjusted EPS | Adjusted Net Revenue Plus Network Fees Weighted 33% | Adjusted Operating Margin Weighted 33% | Total Opportunity | ||||||||||||||||
Maximum | 200 | % | 200 | % | 200 | % | 200 | % | ||||||||||||
Target | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||
Threshold | 50 | % | 50 | % | 50 | % | 50 | % |
The following table sets forth the range of goals, adjusted for the impact of the merger with TSYS, for the performance measures for 2019, our actual performance results for such period and the resulting payouts.
Performance / Payout | Adjusted EPS | Adjusted Net Revenue Plus Network Fees (millions) | Adjusted Operating Margin | ||||||||||||
Performance thresholds: |
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Maximum | $ | 6.25 | $ | 5,793 | 32.1 | % | |||||||||
Target | $ | 5.95 | $ | 5,679 | 31.6 | % | |||||||||
Threshold | $ | 5.65 | $ | 5,565 | 31.1 | % | |||||||||
Actual 2019 performance | $ | 6.23 | $ | 5,644 | 32.3 | % | |||||||||
Actual payout | 195% | 85% | 200 | % |
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 45
Payouts for Short-Term Incentive Plan
The following table summarizes the final short-term incentive plan payouts for each NEO based on performance in 2019 for each performance metric and in total:
Name | Adjusted EPS | Adjusted Net Revenue Plus Network Fees | Adjusted Operating Margin | Total Payout(1) | Payout | ||||||||||||||||||||
Jeffrey S. Sloan | $ | 1,040,000 | $ | 453,333 | $ | 1,066,667 | $ | 2,560,000 | 160 | % | |||||||||||||||
Cameron M. Bready | $ | 452,494 | $ | 197,241 | $ | 464,097 | $ | 1,113,832 | 160 | % | |||||||||||||||
Paul M. Todd | $ | 128,422 | $ | 55,979 | $ | 131,715 | $ | 316,116 | 160 | % | |||||||||||||||
Guido F. Sacchi | $ | 345,542 | $ | 150,621 | $ | 354,402 | $ | 850,565 | 160 | % | |||||||||||||||
David L. Green | $ | 314,718 | $ | 137,185 | $ | 322,787 | $ | 774,690 | 160 | % |
(1) | Messrs. Bready and Green and Dr. Sacchi’s short-term incentive payout for 2019 was prorated accordingly based on the change in bonus targets in September 2019. Mr. Todd joined the Company on September 18, 2019, and his short-term incentive payout for 2019 was prorated accordingly. |
Each year, we grant long-term incentive awards, which we refer to as LTIs, to our NEOs and other key employees throughout the Company. All LTI grants are made pursuant to our 2011 Amended and Restated Incentive Plan, or the 2011 Incentive Plan, which was last approved at our 2016 annual shareholders meeting. All grants of LTIs to our NEOs were approved by the Compensation Committee and are based on target values consistent with each NEO’s responsibilities, experience and performance relative to comparable positions in the marketplace. LTIs align the NEOs’ interests with those of the shareholders by linking their compensation to our share price.
In determining the LTI awards for each NEO, the Compensation Committee considered the market data for LTI awards and target total direct compensation opportunities for comparable positions within our peer group as of February 2019, as reflected in the FWC report, the Compensation Committee’s general assessment of the Chief Executive Officer, and the Chief Executive Officer’s assessment and recommendations with respect to the other NEOs. The Compensation Committee does not use a specific formula for evaluating the individual performance of each NEO. The Compensation Committee makes each assessment taking into consideration the quality and effectiveness of each NEO’s leadership and their respective contribution to the Company’s financial and operational success, as well as the totality of the executive’s performance.
The grant value of the February 2019 LTI awards for our NEOs is reflected in the following table (at target):
Name | Performance Units | Stock Options | Restricted Stock | Total | ||||||||||||||||
Jeffrey S. Sloan | $ | 5,500,000 | $ | 2,750,000 | $ | 2,750,000 | $ | 11,000,000 | ||||||||||||
Cameron M. Bready | $ | 1,625,000 | $ | 812,500 | $ | 812,500 | $ | 3,250,000 | ||||||||||||
Paul M. Todd(1) | — | — | — | — | ||||||||||||||||
Guido F. Sacchi | $ | 875,000 | $ | 437,500 | $ | 437,500 | $ | 1,750,000 | ||||||||||||
David L. Green | $ | 662,500 | $ | 331,250 | $ | 331,250 | $ | 1,325,000 |
(1) | Mr. Todd was appointed as the Company’s Senior Executive Vice President and Chief Financial Officer on September 18, 2019 and did not receive an LTI grant award for 2019. |
Approximately half of the grant value of LTIs granted to our NEOs in February 2019 was in the form of performance units (expressed at target), approximately 25% was in the form of stock options, and approximately 25% was in the form of time-based restricted shares of common stock. In determining the appropriate mix of LTIs, the Compensation Committee took into account competitive market practices of peer group companies, its belief that a blend of equity awards provides both an incentive and retention effect, and its belief that the utilization of the various LTI awards mitigates compensation risk that may be associated with the use of a single LTI vehicle.
46 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
Performance Units
In February 2019, our Compensation Committee granted approximately 50% of the grant value of the total 2019 LTI awards to our NEOs in performance units. The performance units granted to our NEOs in 2019 are earned based on the growth of our annual adjusted EPS, as modified at the end of the three-year performance period by the TSR modifier. The maximum possible payout is four times the target number of the performance units. The minimum payout is zero.
At the beginning of the performance period, both the threshold, target and maximum annual adjusted EPS growth rates and the TSR modifier are set by the Compensation Committee for the entire three-year performance period. The threshold, target and maximum adjusted EPS growth goal for each of the three years in the performance period is determined as a percentage increase or decrease over the actual results from the prior year, assuming constant currencies. As a result, payouts for the second and third year of the performance period require sustained growth over the three-year period. Because growth rates are calculated separately for each year in the performance period and are not aggregated over the three-year performance period, the plan allows for a long-term growth goal while recalibrating to actual performance on an annual basis.
The TSR modifier is determined based on the Company’s total shareholder return performance rank relative to the S&P 500 index over the entire three-year performance period. The payout percentage from the achievement of the adjusted EPS growth rates, as determined above, is then modified up or down by the TSR modifier, to obtain a final payout percentage. This design rewards our NEOs for strong relative total shareholder return performance.
Earned performance units will convert into unrestricted shares following the third anniversary of the performance unit grant date, provided that the Compensation Committee has previously certified the performance results described above. As a result, there is no payout of the award until the end of the three-year performance period.
The following table summarizes the grant value and target number of performance units to each of the NEOs in 2019:
Name | Target Allocation to Performance Units | Number of Performance Units Granted(1) | ||||||||
Jeffrey S. Sloan | $ | 5,500,000 | 42,896 | |||||||
Cameron M. Bready | $ | 1,625,000 | 12,674 | |||||||
Paul M. Todd(2) | — | — | ||||||||
Guido F. Sacchi | $ | 875,000 | 6,825 | |||||||
David L. Green | $ | 662,500 | 5,167 |
(1) | The number of units was calculated by taking the target value divided by our share price on the grant date ($128.22). |
(2) | Mr. Todd did not join the Company until September 18, 2019, and thus did not receive a performance unit grant for 2019. |
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 47
Payout of 2017 Fiscal Year Performance Units
In each year of the most recently completed three-year performance period beginning January 1, 2017 and ending December 31, 2019, the Company achieved adjusted EPS growth at or above the maximum level, as calculated pursuant to the terms of the 2017 fiscal year awards. As a result, the 2017 fiscal year performance units were earned at 200% of target, as follows:
Name | Shares Earned at End of Performance Period | Value at Vesting(1) | ||||||||
Jeffrey S. Sloan | 75,520 | $ | 13,786,931 | |||||||
Cameron M. Bready | 19,396 | $ | 3,540,934 | |||||||
Guido F. Sacchi | 12,752 | $ | 2,328,005 | |||||||
David L. Green | 11,228 | $ | 2,049,784 |
(1) | Reflects the total value based upon the closing share price of $182.56 on December 31, 2019. |
Stock Options
In February 2019, our Compensation Committee granted approximately 25% of the target 2019 LTI value in stock options. Our Compensation Committee believes stock options provide a strong incentive for creation of long-term shareholder value, as stock options may be exercised for a profit only to the extent the price of the Company’s stock appreciates after the grant date. The exercise price is the closing price of the stock on the grant date. We do not grant discounted options orre-price previously granted options. The stock options vest in equal installments on each of the first three anniversaries of the grant date. During 2019, the Compensation Committee approved the following stock option grants to the NEOs:
Name | Target Allocation to Stock Options | Number of Stock Options Granted(1) | ||||||||
Jeffrey S. Sloan | $ | 2,750,000 | 69,445 | |||||||
Cameron M. Bready | $ | 812,500 | 20,518 | |||||||
Paul M. Todd(2) | — | — | ||||||||
Guido F. Sacchi | $ | 437,500 | 11,048 | |||||||
David L. Green | $ | 331,250 | 8,365 |
(1) | Calculated based on the closing price of our stock on the grant date and the Black-Scholes model at the time the grants were approved. Figures in the tables under “Compensation of Named Executive Officers” beginning on page 52 may be slightly different as they reflect specific accounting methodologies required for table reporting as described therein. |
(2) | Mr. Todd did not join the Company until September 18, 2019, and thus did not receive a stock option grant for 2019. |
Time-Based Restricted Stock
In 2019, our Compensation Committee granted approximately 25% of the total 2019 LTI value in time-based restricted stock. Our Compensation Committee believes restricted stock provides a retentive element to the long-term incentive program while still maintaining alignment with the long-term interests of our shareholders by tying the value of the awards to the value of our share price. The restricted shares vest in equal installments on each of the first three anniversaries of the grant date.
48 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
Our NEOs received the following number of restricted shares in 2019:
Name | Target Allocation to Restricted Shares | Number of Restricted Shares Granted(1) | ||||||||
Jeffrey S. Sloan | $ | 2,750,000 | 21,488 | |||||||
Cameron M. Bready | $ | 812,500 | 6,337 | |||||||
Paul M. Todd(2) | — | — | ||||||||
Guido F. Sacchi | $ | 437,500 | 3,413 | |||||||
David L. Green | $ | 331,250 | 2,584 |
(1) | The number of shares was calculated by dividing the target dollar value by the share price as of the grant date on February 25, 2019 ($128.22). |
(2) | Mr. Todd did not join the Company until September 18, 2019, and thus did not receive a restricted stock grant for 2019. |
Other perquisites are provided to help our NEOs be more productive and efficient and as a competitive compensation measure. They are limited in amount and the Company maintains a strict policy regarding the eligibility and use of these benefits, which include financial planning, access to an executive health program and personal use of the Company airplane. Annual NEO personal use of the plane is capped at 50 hours of flight time for the Chief Executive Officer, 25 hours of flight time for the President and Chief Operating Officer, and 15 hours for all other NEOs. To the extent an NEO or other employee uses the Company’s plane for personal travel without reimbursement to the Company, they are imputed compensation for tax purposes based on the Standard Industry Fare Level rates that are published by the IRS.
In addition, we may ask our NEOs and some of their spouses to participate in President’s Club trips offered as rewards to certain other employees for excellent sales or other performance. We treat the expenses of spouses as taxable income to the executives. Because spousal participation is at our request and can be disruptive to other plans they may have, we provide a gross up on that taxable income.
Our NEOs are also eligible to participate in ournon-qualified deferred compensation plan, pursuant to which they may elect to defer up to 100% of their base salary and other eligible forms of compensation. In 2019, none of our NEOs made any contributions to or withdrawals from the deferred compensation plan. In 2019, we added a 401(k) restoration program to ournon-qualified deferred compensation plan, in which, the employee will continue to receive company match once they have reached the IRS income limit and are contributing on average annually 5% to the 401(k) plan. For 2019, the Company match has a three-year cliff vesting restriction. See “Compensation of Named Executive Officers as described above, which align executive and shareholder interests in long-term value creation.—Non-Qualified Deferred Compensation Plan” on page 58 for more detail regarding the plan.
(1) Summary of Employment Agreements.Each of the Named Executive Officers is aAgreements
We are party to an employment agreement with the Company. Mr. Garcia is also a partyeach of our NEOs. These employment agreements provide benefits to a Key Position Agreement. The material terms of all of the aforementioned agreementsour Company that, we believe, are summarized below.
(a) Employment Agreements applicablenecessary in order to Mr. Garciaattract and Mr. Hyde
Mr. Garcia and Mr. Hyde are entitled to a minimum annual salary, subject to yearly review, plus an annual at-risk incentive bonus opportunity, which is determined annually based on a range of specific financial objectives and other objectives reflecting his area and scope of responsibility.retain highly-qualified executives. Each such executive is also entitled to participate in all incentive, savings and welfare benefit plans generally made available to all salaried employees of the Company.
Each such executiveNEO has agreed not to disclose confidential information or compete with the Company,us, and not to solicit the Company’sour customers or recruit our employees, for a period of generally 24 months following the termination of his or her employment. In exchange, we offer limited income and benefit protections to the NEO, but we do not provide for any excise taxgross-ups.
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 49
Policy Regarding Timing of Equity Grants
Our Compensation Committee, in its discretion, typically makes the annual grant to all eligible employees shortly after the public disclosure of either the Company’s fourth quarter earnings release or the filing of the Company’s annual report, based upon the closing price of our common stock on the grant date. From time to time, our Compensation Committee may approve supplemental or othernon-recurring grants outside of our annual compensation program.
Anti-Hedging Policy
Our insider trading policy prohibits directors and employees from engaging in any transaction in which they profit if the value of our common stock declines.
Target Stock Ownership Guidelines
The Compensation Committee has implemented updated stock ownership guidelines for our NEOs and other members of senior management to foster equity ownership and align the interests of our management team, including our NEOs, with our shareholders. More specifically, within five years of his or her initial appointment to the position, the executive is expected to beneficially own at least the number of shares as follows:
For the Chief Executive Officer: equal to 600% of his or her base salary;
For the President: equal to 400% of his or her base salary;
For the Chief Financial Officer and all other NEOs: equal to 300% of his or her base salary; and
For other members of senior management: equal to 200% - 300% of his or her base salary.
Additionally, each NEO is required to hold such shares until the NEO has met the applicable ownership guideline. Each of our NEOs was in compliance with the stock ownership guidelines as of the record date.
Clawback Policy
The Compensation Committee has adopted a clawback policy, pursuant to which we may recoup all or any portion of the value of any annual or long-term incentive awards provided to any current or former NEOs in the event that our financial statements are restated due to material noncompliance with any financial reporting requirement under the securities laws.
Section 162(m) of the Code places a limit of $1,000,000 on the amount of compensation that we may deduct in any one year with respect to any one of our NEOs. Prior to enactment of the Tax Cuts and Jobs Act of 2017 (the “Jobs Act”), qualifying “performance-based” compensation was not subject to the deduction limit if certain requirements were met.
However, the exemption from Section 162(m)’s deduction limit for performance-based compensation was repealed, effective for taxable years beginning after December 31, 2017, such that compensation paid to our NEOs in excess of $1 million will not be deductible. The Jobs Act provides for transition relief applicable to certain arrangements in place as of November 2, 2017. The scope of the transition relief under the legislation repealing Section 162(m)’s exemption from the deduction limit is uncertain, so there can be no assurance that any compensation awarded will be fully deductible under all circumstances. Also, to maintain flexibility in compensating our NEOs, the Compensation Committee reserves the right to use its judgment to authorize compensation payments that may be subject to the deduction limit when the Compensation Committee believes that such payments are appropriate.
50 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
Report of Compensation Committee Members
The members of the Compensation Committee have reviewed and discussed the foregoing section entitled “Compensation Discussion and Analysis” with management. Based on such review and discussion, the Compensation Committee members recommended to the board of directors that the Compensation Discussion and Analysis be included in this proxy statement, which is to be incorporated by reference into the Company’s Annual Report on Form10-K for 2019.
COMPENSATION COMMITTEE MEMBERS
John G. Bruno (Chair)
Kris Cloninger III
William I Jacobs
Joia M. Johnson
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 51
Compensation of Named Executive Officers
The following table presents certain summary information concerning compensation that we paid or accrued for services rendered in all capacities during 2019, 2018, and 2017.
Name and Principal Position | Year | Salary(1) | Stock Awards(2) | Option Awards(3) | Non-Equity Incentive Plan Compensation(4) | All Other Compensation(5) | Total | ||||||||||||||||||||||||||||
Jeffrey S. Sloan |
| 2019 | $ | 1,000,000 | $ | 14,045,285 | $ | 2,750,022 | $ | 2,560,000 | $ | 146,789 | $ | 20,502,096 | |||||||||||||||||||||
Chief Executive Officer | 2018 | $ | 1,000,000 | $ | 9,950,022 | $ | 1,875,034 | $ | 3,958,667 | $ | 34,837 | $ | 16,818,560 | ||||||||||||||||||||||
2017 | $ | 1,000,000 | $ | 4,500,048 | $ | 1,500,010 | $ | 2,101,333 | $ | 34,392 | $ | 9,135,783 | |||||||||||||||||||||||
Cameron M. Bready |
| 2019 | $ | 623,269 | $ | 6,820,333 | $ | 812,513 | $ | 1,113,832 | $ | 75,859 | $ | 9,445,796 | |||||||||||||||||||||
President and Chief Operating Officer | 2018 | $ | 585,000 | $ | 2,494,011 | $ | 457,503 | $ | 2,152,700 | $ | 34,063 | $ | 5,723,277 | ||||||||||||||||||||||
2017 | $ | 565,000 | $ | 1,155,759 | $ | 385,274 | $ | 667,830 | $ | 29,328 | $ | 2,803,191 | |||||||||||||||||||||||
Paul M. Todd |
| 2019 | $ | 188,164 | $ | 2,000,140 |
| — | $ | 316,116 | $ | 60,844 | $ | 2,565,264 | |||||||||||||||||||||
Senior EVP and Chief Financial Officer | |||||||||||||||||||||||||||||||||||
Guido F. Sacchi |
| 2019 | $ | 531,154 | $ | 3,518,903 | $ | 437,501 | $ | 850,565 | $ | 67,761 | $ | 5,405,884 | |||||||||||||||||||||
Senior EVP and Chief Information Officer | 2018 | $ | 500,000 | $ | 1,454,151 | $ | 350,023 | $ | 1,811,167 | $ | 30,517 | $ | 4,145,858 | ||||||||||||||||||||||
2017 | $ | 485,000 | $ | 759,860 | $ | 253,258 | $ | 573,270 | $ | 29,328 | $ | 2,100,716 | |||||||||||||||||||||||
David L. Green |
| 2019 | $ | 520,769 | $ | 3,149,964 | $ | 331,254 | $ | 774,690 | $ | 63,913 | $ | 4,840,590 | |||||||||||||||||||||
Senior EVP, General Counsel and Corporate Secretary | 2018 | $ | 500,000 | $ | 1,121,258 | $ | 275,000 | $ | 929,000 | $ | 30,517 | $ | 2,855,775 | ||||||||||||||||||||||
2017 | $ | 450,000 | $ | 669,048 | $ | 223,018 | $ | 502,350 | $ | 28,760 | $ | 1,873,176 |
(1) | The increases to base salary and target short-term incentive opportunities for the NEOs, other than Mr. Sloan, were prorated for the period between September 22, 2019 and December 31, 2019. Mr. Sloan’s base salary and short-term incentive opportunity was unchanged in 2019. |
(2) | This column reflects the aggregate grant date fair value of awards of time-based restricted shares of our common stock and awards of performance units (including synergy performance units granted during 2019). The aggregate grant date fair value of awards of synergy performance units granted in 2019 and performance units granted in 2017 was calculated in accordance with FASB ASC Topic 718, based on the value of the underlying shares and the probable outcome of performance-based vesting conditions on the grant date (at target performance levels), excluding the effect of estimated forfeitures. The grant date fair value of the performance units granted in 2019 (other than the synergy performance units) and 2018 was calculated using the Monte Carlo model. The calculation for the grant date fair value of the 2019 performance units incorporated the following assumptions: |
Grant Date | Performance Period End Date | Expected Term (years) | Expected Volatility | Risk-Free Interest Rate | Expected Dividend Yield | ||||||||||||||||||||
2/25/2019 |
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12/31/2021 |
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2.85 |
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23.64 |
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2.47 |
% |
|
0 |
% |
The Company used its historical share prices as the basis for the volatility assumptions. The risk-free interest rates were based on U.S. Treasury rates in effect at the time of grant. The expected term was based on the time remaining in the performance period on the grant date.
52 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
The tables below set forth the maximum grant date fair value, assuming that the highest levels of performance conditions were achieved, for all performance-based awards granted during 2019, 2018 and 2017, for which an amount less than the maximum is reflected in the table above.
2019 Performance Units | 2019 Synergy Performance Units | |||||||||||||||||||||
Name | Grant Date Fair Value at Target | Value Assuming Highest Performance | Grant Date Fair Value at Target | Value Assuming Highest Performance | ||||||||||||||||||
Jeffrey S. Sloan | $ | 6,795,155 | $ | 27,180,621 | $ | 4,500,067 | $ | 9,000,135 | ||||||||||||||
Cameron M. Bready | $ | 2,007,688 | $ | 8,030,753 | $ | 4,000,115 | $ | 12,000,344 | ||||||||||||||
Paul M. Todd | — | — | $ | 2,000,140 | $ | 6,000,419 | ||||||||||||||||
Guido F. Sacchi | $ | 1,081,148 | $ | 4,324,593 | $ | 2,000,140 | $ | 6,000,419 | ||||||||||||||
David L. Green | $ | 818,504 | $ | 3,274,018 | $ | 2,000,140 | $ | 6,000,419 |
2018 Performance Units | ||||||||||||
Name | Grant Date Fair Value at Target | Value Assuming Highest Performance | ||||||||||
Jeffrey S. Sloan | $ | 4,575,002 | $ | 18,300,009 | ||||||||
Cameron M. Bready | $ | 1,116,393 | $ | 4,465,574 | ||||||||
Guido F. Sacchi | $ | 854,017 | $ | 3,416,069 | ||||||||
David L. Green | $ | 671,123 | $ | 2,684,494 |
2017 Performance Units | ||||||||||||
Name | Grant Date Fair Value at Target | Value Assuming Highest Performance | ||||||||||
Jeffrey S. Sloan | $ | 3,000,032 | $ | 6,000,064 | ||||||||
Cameron M. Bready | $ | 770,506 | $ | 1,541,012 | ||||||||
Guido F. Sacchi | $ | 506,573 | $ | 1,013,146 | ||||||||
David L. Green | $ | 446,032 | $ | 892,064 |
(3) | This column reflects the aggregate grant date fair value of option awards computed in accordance with FASB ASC Topic 718. The grant date fair values were calculated using the Black-Scholes valuation model. The assumptions used in determining the Black-Scholes value are provided in Note 11 of the Notes to the Consolidated Financial Statements in our Annual Report on Form10-K for the year ended December 31, 2019. |
(4) | This column reflects cash payouts under our short-term incentive plan. For 2018, this column also includes (i) cash payouts under our short-term incentive plan and (ii) the synergy cash bonus payout granted to our NEOs in the 2016 fiscal year in connection with the Heartland acquisition. |
(5) | This column includes the following compensation components for 2019: |
Name | Company Contributions to 401(K) Plans | Company Contributions to Non-Qualified Deferred Compensation Plan | Financial Planning Services | Other Perquisites and Personal Benefits(a) | Total | ||||||||||||||||||||
Jeffrey S. Sloan | $ | 11,200 | $ | 111,147 | $ | 22,280 | $ | 2,162 | $ | 146,789 | |||||||||||||||
Cameron M. Bready | $ | 11,200 | $ | 43,839 | $ | 17,960 | $ | 2,850 | $ | 75,849 | |||||||||||||||
Paul M. Todd | — | $ | 58,584 | — | $ | 2,260 | $ | 60,844 | |||||||||||||||||
Guido F. Sacchi | $ | 11,200 | $ | 34,493 | $ | 17,960 | $ | 4,180 | $ | 67,761 | |||||||||||||||
David L. Green | $ | 11,200 | $ | 32,791 | $ | 17,960 | $ | 1,962 | $ | 63,913 |
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 53
(a) | These perquisites and personal benefits consist of compensation related to personal usage of the Company airplane (for Mr. Bready and Dr. Sacchi in 2019), and attendance at Company-sponsored events for our NEOs. The dollar amount of perquisites and personal benefits represents the cost we incurred to provide the perquisite or benefit. For compensation reporting purposes, we valued the incremental cost of the personal use of the aircraft based on the variable costs incurred by the Company, which include (i) landing, ramp and parking fees and expenses; (ii) crew travel expenses; (iii) supplies and catering, (iv) aircraft fuel and oil expense; (v) any customs, foreign permit and similar fees; (vi) crew travel; (vii) passenger ground transportation; and (viii) maintenance fees and expenses associated with the plane. The incremental cost of the use of the airplane does not include any costs that would have been incurred by the Company whether or not the personal trip was taken. |
Grants of Plan-Based Awards in 2019
The following table sets forth information concerning grants of plan-based awards during 2019 to the NEOs, all of which were made pursuant to our 2011 Incentive Plan.
Estimated Future Payouts UnderNon-Equity Incentive Plan Awards(1) |
Estimated Future Payouts | All Other
| All Other (#)(4)
| Exercise
| Grant Date Option
| ||||||||||||||||||||||||||||||||||||||||||||||||||
Name
| Grant
| Threshold ($)
| Target ($)
| Max ($)
| Threshold (#)
| Target (#)
| Max (#)
| ||||||||||||||||||||||||||||||||||||||||||||||||
Jeffrey S. Sloan | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash | 2/25/2019 | $ | 800,000 | $ | 1,600,000 | $ | 3,200,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Performance units | 2/25/2019 | 10,724 | 42,896 | 171,584 | $ | 6,795,155 | |||||||||||||||||||||||||||||||||||||||||||||||||
Synergy performance units | 9/18/2019 | — | 27,381 | 54,762 | $ | 4,500,067 | |||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares | 2/25/2019 | 21,488 | $ | 2,750,063 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options | 2/25/2019 | 69,455 | $ | 128.22 | $ | 2,750,022 | |||||||||||||||||||||||||||||||||||||||||||||||||
Cameron M. Bready | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash | 9/22/2019 | $ | 402,500 | $ | 805,000 | $ | 1,610,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Performance units | 2/25/2019 | 3,169 | 12,674 | 50,696 | $ | 2,007,688 | |||||||||||||||||||||||||||||||||||||||||||||||||
Synergy performance units | 9/18/2019 | — | 24,339 | 73,017 | $ | 4,000,115 | |||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares | 2/25/2019 | 6,337 | $ | 812,530 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options | 2/25/2019 | 20,518 | $ | 128.22 | $ | 812,513 | |||||||||||||||||||||||||||||||||||||||||||||||||
Paul M. Todd(6) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash | 9/22/2019 | $ | 357,000 | $ | 714,000 | $ | 1,428,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Synergy performance units | 9/18/2019 | — | 12,170 | 36,510 | $ | 2,000,140 | |||||||||||||||||||||||||||||||||||||||||||||||||
Guido F. Sacchi |
| — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash | 9/22/2019 | $ | 287,500 | $ | 575,000 | $ | 1,150,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Performance units | 2/25/2019 | 1,706 | 6,825 | 27,300 | $ | 1,081,148 | |||||||||||||||||||||||||||||||||||||||||||||||||
Synergy performance units | 9/18/2019 | — | 12,170 | 36,510 | $ | 2,000,140 | |||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares | 2/25/2019 | 3,413 | $ | 437,615 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options | 2/25/2019 | 11,048 | $ | 128.22 | $ | 437,501 | |||||||||||||||||||||||||||||||||||||||||||||||||
David L. Green | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash | 9/22/2019 | $ | 275,000 | $ | 550,000 | $ | 1,100,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Performance units | 2/25/2019 | 1,292 | 5,167 | 20,668 | $ | 818,504 | |||||||||||||||||||||||||||||||||||||||||||||||||
Synergy performance units | 9/18/2019 | — | 12,170 | 36,510 | $ | 2,000,140 | |||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares | 2/25/2019 | 2,584 | $ | 331,320 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options | 2/25/2019 | 8,365 | $ | 128.22 | $ | 331,254 |
(1) | These columns reflect the threshold, target and maximum annual cash incentive opportunities under our short-term incentive plan approved by the Compensation Committee following the completion of the merger with TSYS. At the time of the filing of this proxy statement, the actual results of ournon-equity incentive plan were certified, and our NEOs received the amounts set forth in the“Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. |
(2) | These columns reflect the number of estimated future payouts of (i) performance units granted in 2019 based on threshold, target and maximum award opportunities and (ii) synergy performance units granted in 2019 based on target and maximum award opportunities. There is no threshold award opportunity for the synergy performance units. |
54 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
For purposes of the performance units granted in 2019, after a three-year performance period, our Compensation Committee will certify the results and determine the number of performance units that have been earned. Thereafter, all of the performance units will convert to unrestricted shares.
Depending on the Compensation Committee’s certification of the achievement of the synergy goals as presented by an independent accounting firm, half of the synergy performance units will convert into unrestricted shares on September 18, 2022, and the remaining units will convert to unrestricted shares on September 18, 2023, subject to the NEO’s continued employment with the Company on each respective date.
The NEOs do not have the right to vote the underlying shares, and dividends are not payable or otherwise accrued to the NEOs until the units are converted into a stock grant at the end of the applicable performance period. Once the stock grant is made, dividends are paid on such stock at the same rate as all of our other shareholders.
(3) | This column reflects the number of restricted shares of our common stock granted in 2019 that will vest in equal installments on each of the first three anniversaries of the grant date. |
(4) | This column represents the number of stock options granted in 2019 that will vest in equal installments on each of the first three anniversaries of the grant date. |
(5) | This column represents the aggregate grant date fair value of equity awards granted in 2019, calculated in accordance with FASB ASC Topic 718, excluding the estimated effect of forfeitures, with respect to the synergy performance units, restricted shares and stock options, and the Monte Carlo model, with respect to the performance units. |
(6) | Mr. Todd was appointed as the Company’s Senior Executive Vice President and Chief Financial Officer on September 18, 2019 and did not participate in the February 2019 grant of LTI awards. |
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 55
Outstanding Equity Awards at December 31, 2019
The following table provides the outstanding equity awards at December 31, 2019 for each of the NEOs.
Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||
Name | Grant/ Date | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($/sh) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | ||||||||||||||||||||||||||||||||||||
Jeffrey S. Sloan | 7/30/2015 | 71,204 | — | $ | 55.92 | 7/30/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||||
7/29/2016 | 36,676 | — | $ | 74.66 | 7/29/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
3/1/2017 | 42,230 | 21,115 | $ | 79.45 | 3/1/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
2/26/2018 | 17,812 | 35,623 | $ | 114.70 | 2/26/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
2/25/2019 | — | 69,445 | $ | 128.22 | 2/25/2029 | — | — | — | |||||||||||||||||||||||||||||||||||||
3/1/2017 | — | — | — | — | 6,293 | (3) | $ | 1,148,850 | — | — | |||||||||||||||||||||||||||||||||||
2/26/2018 | — | — | — | — | 10,898 | 3) | $ | 1,989,539 | — | — | |||||||||||||||||||||||||||||||||||
6/12/2018 | — | — | — | — | 19,697 | 3) | $ | 3,595,884 | — | — | |||||||||||||||||||||||||||||||||||
2/25/2019 | — | — | — | — | 21,488 | (3) | $ | 3,915,547 | — | — | |||||||||||||||||||||||||||||||||||
3/1/2017 | — | — | — | — | 75,520 | (4) | $ | 13,786,931 | |||||||||||||||||||||||||||||||||||||
2/26/2018 | — | — | — | — | — | — | 98,082 | (5) | $ | 17,905,850 | |||||||||||||||||||||||||||||||||||
2/25/2019 | — | — | — | — | — | — | 128,688 | (6) | $ | 23,493,281 | |||||||||||||||||||||||||||||||||||
9/18/2019 | — | — | — | — | — | — | 27,381 | (7) | $ | 4,998,675 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Total | 167,922 | 126,183 | 133,856 | $ | 24,436,751 | 254,151 | $ | 46,397,806 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Cameron M. Bready | 7/30/2015 | 3,780 | — | $ | 55.92 | 7/30/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||||
7/29/2016 | 9,703 | — | $ | 74.66 | 7/29/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
3/1/2017 | 10,847 | 5,423 | $ | 79.45 | 3/1/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
2/26/2018 | 4,346 | 8,692 | $ | 114.70 | 2/26/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
2/25/2019 | — | 20,518 | $ | 128.22 | 2/25/2029 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
3/1/2017 | — | — | — | — | 1,616 | (3) | $ | 295,017 | — | — | |||||||||||||||||||||||||||||||||||
2/26/2018 | — | — | — | — | 2,659 | (3) | $ | 485,427 | — | — | |||||||||||||||||||||||||||||||||||
6/12/2018 | — | — | — | — | 5,178 | (3) | $ | 945,296 | — | — | |||||||||||||||||||||||||||||||||||
2/25/2019 | — | — | — | — | 6,337 | (3) | $ | 1,156,883 | — | — | |||||||||||||||||||||||||||||||||||
3/1/2017 | — | — | — | — | 19,396 | (4) | $ | 3,540,934 | |||||||||||||||||||||||||||||||||||||
2/26/2018 | — | — | — | — | — | — | 23,934 | (5) | $ | 4,369,391 | |||||||||||||||||||||||||||||||||||
2/25/2019 | — | — | — | — | — | — | 38,022 | (6) | $ | 6,941,296 | |||||||||||||||||||||||||||||||||||
9/18/2019 | — | — | — | — | — | — | 24,339 | (7) | $ | 4,443,328 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Total | 28,676 | 34,633 | — | — | 35,186 | $ | 6,423,557 | 86,295 | $ | 15,754,015 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Paul M. Todd | 9/18/2019 | — | — | — | — | — | — | 12,170 | (7) | $ | 2,221,755 | ||||||||||||||||||||||||||||||||||
Guido Sacchi | 7/30/2015 | 4,220 | — | $ | 55.92 | 7/30/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||||
7/29/2016 | 6,382 | — | $ | 74.66 | 7/29/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
3/1/2017 | 7,130 | 3,565 | $ | 79.45 | 3/1/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
2/26/2018 | 3,325 | 6,650 | $ | 114.70 | 2/26/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
2/25/2019 | — | 11,048 | $ | 128.22 | 2/25/2029 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
3/1/2017 | — | — | — | — | 1,063 | (3) | $ | 194,061 | — | — | |||||||||||||||||||||||||||||||||||
2/26/2018 | — | — | — | — | 2,035 | (3) | $ | 371,510 | — | — | |||||||||||||||||||||||||||||||||||
6/12/2018 | — | — | — | — | 1,407 | (3) | $ | 256,862 | — | — | |||||||||||||||||||||||||||||||||||
2/25/2019 | — | — | — | — | 3,413 | (3) | $ | 623,077 | — | — | |||||||||||||||||||||||||||||||||||
3/1/2017 | — | — | — | — | 12,752 | (4) | $ | 2,328,005 | |||||||||||||||||||||||||||||||||||||
2/26/2018 | — | — | — | — | — | — | 18,309 | (5) | $ | 3,342,491 | |||||||||||||||||||||||||||||||||||
2/25/2019 | — | — | — | — | — | — | 20,475 | (6) | $ | 3,737,916 | |||||||||||||||||||||||||||||||||||
9/18/2019 | — | — | — | — | — | — | 12,170 | (7) | $ | 2,221,755 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Total | 21,057 | 21,263 | 20,670 | $ | 3,773,515 | 50,954 | $ | 9,302,162 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
David L. Green | 8/18/2014 | 15,482 | — | $ | 35.78 | 8/18/2024 | — | — | — | — | |||||||||||||||||||||||||||||||||||
7/30/2015 | 11,868 | — | $ | 55.92 | 7/30/2025 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
7/29/2016 | 5,635 | — | $ | 74.66 | 7/29/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
3/1/2017 | 6,279 | 3,139 | $ | 79.45 | 3/1/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
2/26/2018 | 2,612 | 5,225 | $ | 114.70 | 2/26/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
2/25/2019 | — | 8,365 | $ | 128.22 | 2/25/2029 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
3/1/2017 | — | — | — | — | 936 | (3) | $ | 170,876 | — | — | |||||||||||||||||||||||||||||||||||
2/26/2018 | — | — | — | — | 1,599 | (3) | $ | 291,913 | — | — | |||||||||||||||||||||||||||||||||||
6/12/2018 | — | — | — | — | 985 | (3) | $ | 179,822 | — | — | |||||||||||||||||||||||||||||||||||
2/25/2019 | — | — | — | — | 2,584 | (3) | $ | 471,735 | — | — | |||||||||||||||||||||||||||||||||||
3/1/2017 | — | — | — | — | 11,228 | (4) | $ | 2,049,784 | |||||||||||||||||||||||||||||||||||||
2/26/2018 | — | — | — | — | — | — | 14,388 | (5) | $ | 2,626,673 | |||||||||||||||||||||||||||||||||||
2/25/2019 | — | — | — | — | — | — | 15,501 | (6) | $ | 2,829,863 | |||||||||||||||||||||||||||||||||||
9/18/2019 | — | — | — | — | — | — | 12,170 | (7) | $ | 2,221,755 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Total | 41,876 | 16,729 | 17,332 | $ | 3,164,130 | 42,059 | $ | 7,678,291 | |||||||||||||||||||||||||||||||||||||
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|
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| ||||||||||||||||||||||||||||||||||
56 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
(1) | All stock options were granted pursuant to our 2011 Incentive Plan and vest in equal installments on each of the first three anniversaries of the grant date. |
(2) | Market value is calculated based on the closing price of our common stock on December 31, 2019 of $182.56. |
(3) | Represents shares of restricted stock that vest in equal installments on each of the first three anniversaries of the grant date. |
(4) | Represents performance units granted in 2017. These performance units are earned based on the growth of our annual adjusted EPS over each year (calculated separately) in the three-year performance period ended December 31, 2019. The final percentage of performance units earned will be calculated as the average of each of the three annual payout percentages (as percentages of target). The earned units will convert into unrestricted shares following the third anniversary of the performance unit grant date, or March 1, 2020, provided that the Compensation Committee has previously certified the performance results described above. In accordance with SEC rules and based on actual performance through 2019, the number of performance units reflected in the table is based on the actual achievement at the maximum payout level of 200%. See the “Payout of 2017 Fiscal Year Performance Units” section of the Compensation Discussion and Analysis for additional information. |
(5) | Represents performance units granted during 2018. These performance units are earned based on the growth of our annual adjusted EPS over each year (calculated separately) in the three-year performance period ending December 31, 2020, as may be further adjusted based on the TSR modifier. The final percentage of performance units earned is determined as the average of each of the three annual adjusted EPS payout percentages (as a percent of target) and then multiplied by the TSR modifier. The earned units will convert into unrestricted shares following the third anniversary of the performance unit grant date, or February 26, 2021, provided that the Compensation Committee has previously certified the performance results described above. In accordance with SEC rules, the number of performance units reflected in the table is based on an assumed achievement at the payout level of 300%, based on actual adjusted EPS during 2018 and 2019 and no modification of such payout based on actual TSR for the three-year performance period. |
(6) | Represents performance units granted during 2019. These performance units are earned based on the same calculation as the performance units granted in 2018. In accordance with SEC rules, the number of performance units reflected in the table is based on an assumed achievement at the payout level of 300%, based on actual adjusted EPS during 2019 and no modification of such payout based on actual TSR for the three-year performance period. |
(7) | Represents synergy performance units granted in 2019 in connection with the merger with TSYS as anon-recurring, supplemental award. The synergy performance units are earned based upon the achievement ofpre-established synergy goals set by our Compensation Committee for the three-year performance period from September 18, 2019 to September 19, 2022. The number of shares issued, if any, will be based on the Company’s achievement of cost synergies of at least $350 million and revenue synergies of at least $125 million. The resulting payout multiple for cost synergies and revenue synergies would be averaged together to determine the payout multiple applied to the target award, and will range from 0% to 200% of target for our Chief Executive Officer and 0% to 300% of target for our other NEOs. In accordance with SEC rules and based on actual performance for 2019, the number of synergy performance units reflected in the table is based on an assumed achievement at the target performance level. |
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 57
Stock Options Exercised and Stock Vested during 2019
The following table provides information on options exercised and stock awards that vested in 2019. The shares shown as acquired on exercise or on vesting represent shares of our common stock.
Option Awards | Stock Awards | ||||||||||||||||||||||||||
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#)(2) | Value Realized on Vesting ($)(3) | ||||||||||||||||||||||||
Jeffrey S. Sloan | 132,686 | $ | 12,443,521 | 144,896 | $ | 22,878,595 | |||||||||||||||||||||
Cameron M. Bready | 16,000 | $ | 1,208,002 | 48,378 | $ | 7,467,242 | |||||||||||||||||||||
Paul M. Todd | — | — | — | — | |||||||||||||||||||||||
Guido F. Sacchi | — | — | 31,605 | $ | 4,815,014 | ||||||||||||||||||||||
David L. Green | — | — | 21,460 | $ | 3,377,815 |
(1) | Represents the excess of the fair market value of the shares at the time of exercise over the exercise price of the options. |
(2) | Includes shares acquired on the vesting of (i) restricted stock awards and (ii) performance units granted in 2016. |
(3) | Represents the fair market value of the shares on the vesting date. |
Non-Qualified Deferred Compensation Plan
Our NEOs are eligible to participate in ourNon-Qualified Deferred Compensation Plan, or the deferred compensation plan.
The following table provides information on deferred compensation under the deferred compensation plan for each NEO during 2019. Mr. Sloan and Mr. Todd participate, but did not make any contributions or withdrawals, nor did they receive any distributions, during 2019. In 2019, we added a 401(k) restoration program to the deferred compensation plan, in which the employee will continue to receive company match once they have reached the IRS income limit and are contributing on average annually 5% to the 401(k) plan. For 2019, the Company match will have a three-year cliff vesting restriction. Aggregate earnings (Iosses) are not includable in the summary compensation table above because they were not above-market or preferential earnings. The aggregate balance includes amounts previously reported in the summary compensation table above in the previous years when earned if the NEO’s compensation was required to be disclosed in a previous year.
Name | Company Contribution in 2019(1) | Aggregate Earnings (Losses) in 2019 | Aggregate Balance at December 31, 2019 | ||||||||||||
Jeffrey S. Sloan | $ | 111,147 | $ | 24,891 | $ | 127,810 | |||||||||
Cameron M. Bready | $ | 43,839 | — | — | |||||||||||
Paul M. Todd | $ | 58,584 | $ | 11,864 | $ | 208,670 | |||||||||
Guido F. Sacchi | $ | 34,493 | — | — | |||||||||||
David L. Green | $ | 32,791 | — | — |
(1) | The Company contribution was earned as of December 31, 2019 and will be deposited in the NEOs’ deferred compensation plan account in 2020. This contribution will vest on December 31, 2022. |
Pursuant to the deferred compensation plan, participants are permitted to elect to defer up to 100% of their base salary and other eligible forms of cash compensation (such as cash incentive bonus). Participant accounts are credited with earnings based on the participant’s investment allocation among a menu of investment options selected by the deferred compensation plan administrator. Participants are 100% vested in the participant deferrals and related earnings. We do not make contributions to the deferred compensation plan and do not guarantee any return on participant account balances. Participants may allocate their plan accounts intosub-accounts that are payable upon separation from service or on designated specified dates. Except in the case
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of death or disability, participants may elect in advance to have their various account balances pay out in a single lump sum or in installments over a period of two to ten years. In the event a participant separates from service by reason of death or disability, the participant or his designated beneficiary will receive the undistributed portion of his or her account balances in alump-sum payment. Subject to approval by the deferred compensation plan administrator, in the event of an unforeseen financial emergency beyond the participant’s control, a participant may request a withdrawal from an account up to the amount necessary to satisfy the emergency (provided the participant does not have the financial resources to otherwise meet the hardship).
We maintain a noncontributory defined benefit pension plan covering our U.S. employees who have met the eligibility provisions. The retirement plan was closed to new participants beginning June 1, 1998, and none of our NEOs were hired before that date.
Potential Payments upon Termination, Retirement or Change in Control
This section describes the post-employment benefits that each of our NEOs would be entitled to receive in connection with various termination of employment andchange-in-control scenarios.
Employment Agreements with Our Named Executive Officers
In connection with the completion of the merger with TSYS, Messrs. Sloan, Bready and Green and Dr. Sacchi each entered into an amended and restated agreement with our Company, and Mr. Todd entered into a new employment agreement. These agreements are each for an initial term of three years following the completion of the merger with TSYS and are automatically extended for one additional year on the second anniversary of the closing of the merger with TSYS and each anniversary thereafter unless either party provides notice ofnon-renewal before such anniversary date. The initial term of each employment agreement is until September 18, 2022.
Each of these agreements prohibits the NEO from disclosing our confidential information, soliciting our customers or recruiting our employees for a period of 24 months following the terminationseparation date. In addition, if the NEO’s employment is terminated by the Company or the NEO, the NEO has agreed not to compete with us generally for a period of his employment.
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Each suchThe employment agreementagreements with the NEOs may be terminated by the Companyus at any time for “cause” or “poor performance” (as defined therein)below) or for no reason or by the applicable executiveNEO with or without “good reason” (as defined therein)below). EachThe employment agreementagreements will also be terminatedterminate upon the NEO’s death, disability or retirement of the executive.retirement. Depending on the reason for the termination and when it occurs, the executiveNEO will be entitled to certain severance benefits, as described below, which may be delayed for such time as may be necessary to avoid a violation of Code Section 409A.
If, prior409A of the Internal Revenue Code. “Cause,” as defined in the employment agreements, generally means (i) the failure by the NEO to perform substantially his responsibilities after delivery of notice and a cure period of ten business days, (ii) engagement in any fraud, misappropriation, embezzlement or similar dishonest or wrongful act, (iii) substance abuse which materially interferes with the NEO’s ability to perform or the use of illegal drugs, (iv) violation of laws or Company policies regarding employment discrimination, harassment, conflicts of interest, retaliation, competition with our Company, solicitation of our customers or employees on behalf of anyone other than us, improper use or disclosure of confidential or proprietary information, or (v) commission of or conviction for, or plea of guilty or nolo contendere to, a felony or a crime involving dishonesty or other moral turpitude. In the case of Mr. Sloan, any determination of “Cause” requires a finding that such circumstances exist by not less than a majority (or, following a transaction constituting a change in control, not less than three-quarters) of the executive’sboard. “Good Reason,” as defined in the employment agreements, generally means (a) a material adverse reduction in position, duties or responsibilities, (b) in the case of Mr. Sloan, a change such that he no longer reports directly and exclusively to the board, (c) a reduction of the NEO’s base salary, bonus opportunity (to a target below the minimum specified in the agreement), or in welfare benefits (in each case, unless such reduction is terminatedmade to similarly situated senior executives), (d) a failure of our Company to require asuccessor-in-interest to agree to perform our obligations under the employment agreement, (e) relocation from the Atlanta, Georgia metropolitan
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area (in the case of Messrs. Sloan, Bready, Sacchi and Green) or from the Columbus, Georgia metropolitan area, other than a relocation to Atlanta, Georgia (in the case of Mr. Todd), or (f) material breach by the Company without cause (but not for poor performance) or he resigns for good reason, the Company will be required to pay such executive’s accrued salary and benefits through the date of termination, plus Mr. Garcia will receive an amount equal to the greater of (i) 50% of his target annual bonus for the current year, or (ii) 100% of his target annual bonus, prorated through the date of termination and adjusted up or down by reference to year-to-date performance at the date of termination, and Mr. Hyde will receive 50% of his target annual bonus for the current year. In addition:
In addition, all of the executive’s restricted stock awards will vest, and for Mr. Garcia, those stock options that would have vested in the next 24 months will vest and remain exercisable for 90 days after the end of the severance period, while for Mr. Hyde those stock options that would have vested in the next 24 months will vest and remain exercisable for 90 days after the termination of his employment.
If, prior to a change in control, the executive’s employment is terminated by the Company for poor performance, the Company will be required to pay such executive’s accrued salary and benefits through the date of termination. In addition, Mr. Garcia may receive 100% of his target annual bonus, prorated through the date of termination and adjusted up or down by reference to year-to-date performance at the date of termination. In addition:
In addition, the executive’s restricted stock awards and stock options that would have vested in the next 24 months will vest, and for Mr. Garcia, those stock options remain exercisable for 90 days after the end of the severance period, while for Mr. Hyde those stock options remain exercisable for 90 days after the termination of his employment.
If, within 36 months after a change in control or in anticipation of a change in control, the executive’s employment is terminated by the Company without cause or such executive resigns for good reason, the Company will be required to pay such executive’s accrued salary and benefits through the date of termination plus 100% of his annual bonus opportunity for the current year. In addition:
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Whether or not a change in control shall have occurred, if the employment of the executive is terminated by reason of his death, disability or retirement, such executive will be entitled to receive accrued salary and benefits through the date of termination and any death, disability or retirement benefits that may apply, but no additional severance amount. In addition, if the employment of the executive is terminated by reason of his death or disability, all of his restricted stock awards and stock options will vest in accordance with the terms of the plan, which is applicable to all employees who participate in the equity incentive plans. Furthermore, if the employment of Mr. Hyde is terminated by reason of his retirement, all of his restricted stock awards and stock options will vest pursuant to his agreement.
If the Company terminates the executive for cause, or if he resigns from the Company without good reason, such executive will be entitled to receive accrued salary and benefits through the date of termination, but no additional severance amount is payable under the terms of the employment agreements.agreement.
For purposes of these employment agreements, a change in control of the Company is generally defined as the acquisition by a third party of 35%Termination Without Cause or more of the voting power of the Company, or the consummation of certain mergers, asset sales or other major business combinations. A restructuring or separation of any line of business of the Company will not, of itself, constitute a change in control. Each of these employment agreements provides that the executive will be entitledResignation for Good Reason When Not Related to a tax gross-up payment from the Company to cover any excise tax liability such executive may incur as a result of payments or benefits contingent on a changeChange in control, but such gross-up payment will be made only if the after-tax benefit to the executive of such tax gross-up is at least $50,000. If not, the benefits would be reduced to an amount that would not trigger the excise tax.
In addition, each of the agreements contains a waiver provision that provides that the failure of either party to insist, in one or more instances, on performance by the other in strict accordance with the terms and conditions of the agreement shall not be deemed a waiver or relinquishment of any right granted in the agreement or of the future performance of any such term or condition or of any other term or condition of the agreement, unless such waiver is contained in a writing signed by the party making the waiver.
(b) Employment Agreement with Mr. Mangum and Mr. SloanControl
Mr. Mangum’s employment agreement was effective on March 1, 2010 and will remain in effect through May 31, 2013, with automatic renewals on a year to year basis unless either party provides notice that there will be no extension. Mr. Sloan’s employment agreement was effective on June 1, 2010 and will remain in effect through May 31, 2013 with automatic renewals on a year to year basis unless either party provides notice that there will be no extension. Pursuant to their agreements, Messrs. Mangum and Sloan are entitled to a minimum annual salary, subject to yearly review, plus an annual at-risk incentive bonus opportunity, which is based on the achievement of financial and performance objectives determined annually by the Compensation Committee. They are also entitled to participate in all incentive, savings and welfare benefit plans generally made available to all salaried employees of the Company.
Messrs. Mangum and Sloan both have agreed not to disclose confidential information and not to solicit the Company’s customers or recruit its employees, for a period of 24 months following the termination of his employment. If the executive’s employment is terminated (other than as a result of the Company failing to extend his employment agreement), he has agreed not to compete with the Company for a period of 24 months or, under certain circumstances, 18 months. The non-compete does not apply if the executive’s employment is terminated as a result of the Company failing to extend his employment agreement.
The employment agreements may be terminated by the Company at any time for “cause” or for no reason, or by the executive with or without “good reason” (as defined therein). The employment agreements will also be terminated upon the executive’s death, disability or retirement. Depending on the reason for the termination and when it occurs, the executive will be entitled to certain severance benefits, as described below, which may be delayed for such time as may be necessary to avoid a violation of Code Section 409A.
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If, prior to a change in control or on or after the second anniversary of a change in control, the executive’sNEO’s employment is terminated by the Companyus without cause or hethe NEO resigns for good reason, the CompanyNEO will be requiredentitled to pay his accruedthe following payments and benefits:
Accrued salary and benefits through the dateseparation date.
Continued payments of termination plus a pro-rata portionthe NEO’s base salary for 24 months (in the case of hisMr. Sloan) or 18 months (in the case of the other NEOs), in each case provided that the NEO does not violate any restrictive covenants.
A prorated annual incentive bonus for the year ofin which the termination occurs, based uponon actual performance against certifiedpre-established bonus targets. In addition:
An additional cash payment equal to 2x (in the case of Mr. Sloan) or 1.5x (in the |
All of the executive’sother NEOs) the NEO’s target annual bonus opportunity, payable nine months after the separation date, provided that the NEO does not violate any restrictive covenants.
A lump sum cash payment equal to 18 months of the NEO’s COBRA premiums, payable within 60 days following separation.
The NEO’s performance units granted following the closing of the merger with TSYS will vestpro-rata based on target performance (if termination occurs in the first year of the applicable performance cycle) or actual performance (if termination occurs after the first year of the applicable performance cycle). With respect to Messrs. Sloan, Bready, and Green and Dr. Sacchi, any such awards granted prior to the closing of the merger with TSYS will remain outstanding, and, after the Compensation Committee certifies the results at the end of the performance period in which the separation date falls, the NEO will receive 50% of the number of shares that would have vested based on actual performance.
With respect to Messrs. Sloan, Bready, and Green and Dr. Sacchi, restricted stock awards granted prior to the closing of the merger with TSYS will vest as of the separation date, and those stock options granted prior to the closing of the merger with TSYS that would have vested in the next 24 months will vest and remain exercisable for no more than 90 days from the date of termination. His performance-basedseparation date.
With respect to Mr. Todd’s stock options, restricted stock units will remain outstanding,unit awards and afterperformance share awards granted prior to the Compensation Committee certifies the results at the endclosing of the performance cycle in whichmerger with TSYS, such awards were converted pursuant to the date of termination falls, he will receive 50%terms of the numbermerger agreement into (a) in the case of shares that vested based onMr. Todd’s TSYS stock options, Company stock options and (b) in the actual satisfactioncase of Mr. Todd’s TSYS restricted stock unit awards and performance share awards, Company restricted stock unit awards. Such awards remained subject to the same terms and conditions (including vesting and payment terms) as applied to Mr. Todd’s corresponding TSYS awards immediately prior to the closing of the merger. Therefore, upon a termination of employment not related to a change in control, Mr. Todd would not be entitled to additional vesting with respect to such performance requirements.equity awards which were granted prior to the closing of the merger with TSYS. Such awards would vest upon Mr. Todd’s termination without cause or upon a resignation for good reason as described below.
Termination Without Cause or Resignation for Good Reason When Related to a Change in Control. If, within 24 months after a change in control, the executive’sNEO’s employment is terminated by the Companyus without cause or hethe NEO resigns for good reason, the CompanyNEO will be requiredentitled to pay his accruedthe following benefits:
Accrued salary and benefits through the dateseparation date.
A cash payment equal to 3x (in the case of termination. In addition, the Company will pay:
In addition, all of the executive’sother NEOs) the amount of the NEO’s then-current base salary as a lump sum payment or payments, provided that the NEO does not violate any restrictive covenants.
A prorated annual incentive bonus for the year in which the termination occurs based on (a) the NEO’s then-current target bonus opportunity, if the separation date occurs before the end of the year in which the change of control occurred, or (b) the actual amount earned based on certified results, if the separation date occurs during a year that began after the change in control occurred.
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A cash payment equal to 3x (in the case of Mr. Sloan) or 2x (in the case of the other NEOs) of the amount of the NEO’s then-current target bonus opportunity, payable nine months after the separation date, provided that the NEO does not violate any restrictive covenants.
A lump sum cash payment equal to 18 months of the NEO’s COBRA premiums, payable within 60 days following separation.
All of the NEO’s restricted stock awards and stock options granted following the closing of the merger with TSYS (and, with respect to Messrs. Sloan, Bready, and Green and Dr. Sacchi, any such awards granted prior to the closing of the merger with TSYS) will vest as of the separation date, and the options will remain exercisable for no more than 90 days from the dateseparation date.
The NEO’s performance units granted following the closing of termination. The executive’s performance-based restricted stock unitsthe merger with TSYS will vest in full based on target performance (if termination occurs in the first year of the applicable performance cycle) or actual performance (if termination occurs after the first year of the applicable performance cycle). With respect to Messrs. Sloan, Bready and Green and Dr. Sacchi, any such awards granted prior to the closing of the merger with TSYS will convert tointo fully-vested shares of Company Common Stockour common stock based uponon (i) assumed target performance, if the separation date of termination occurs before the end of the performance cycle in which the change in control occurs, or (ii) the greater of assumed target performance or actual performance, if the separation date of termination occurs after the end of the performance cycle in which the change of control occurs, or (iii) actual performance, if the separation date of termination occurs during a performance cycle that began after the change in control occurred.
With respect to Mr. Todd’s stock options, restricted stock unit awards and performance share awards granted prior to the closing of the merger with TSYS that were converted as described above into Company stock options and restricted stock unit awards, as applicable, upon the closing of the merger with TSYS, a prorated portion of such awards that would have become vested on the next vesting date will become immediately vested, with stock options to remain exercisable for the remainder of the applicable term.
The executiveNEO also will be eligible for comparable benefits if his employment is terminated without cause or if he resigns for good reason afterin anticipation of achange-in-control transaction. The employment agreements specify that a termination or resignation is considered to be in anticipation of achange-in-control transaction if the termination occurs following public announcement of achange-in-control transaction which would lead to a changetransaction is consummated within nine months (or, in control and the transaction closes no later than 9 months and 1 day after his terminationcase of employment.
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Death or Disability. Whether or not a change in control shall have occurred,occurs, if the executive’sNEO’s employment is terminated by reason of his death or disability, or retirement, hethe NEO will be entitled to receive accrued salary and benefits through the separation date of termination and any death, disability or retirementother benefits that may apply. In addition, allAll of the executive’sNEO’s performance units, restricted stock awards and stock options granted following the closing of the merger with TSYS (and, with respect to Messrs. Sloan, Bready, and Green and Dr. Sacchi, any such awards granted prior to the closing of the merger with TSYS) will vest. Invest (in the case of termination due to retirement, the executive’s performance-based restricted stock units will convert to fully-vested shares of Company Common Stockawards, based on actual performance as certified by the Committee at the end of the performance cycle. In the case of termination due to death or disability, the executive’s performance-based restricted stock units will convert to fully-vested shares of Company Common Stock based upon assumed performance at the target level.
If the Company terminates the executive for cause, or if he resigns from the Company without good reason, he will be entitled to receive accrued salary and benefits through the date of termination, but no additional severance amount is payable under the terms of his employment agreement.
For purposes of the executive’s employment agreement, a change in control of the Company is generally defined as the acquisition by a third party of 35% or more of the voting power of the Company, or the consummation of certain mergers, asset sales or other major business combinations. His employment agreement provides that the executive will be entitled to a tax gross-up payment from the Company to cover any excise tax liability such executive may incur as a result of payments or benefits contingent on a change in control that occurs before the fourth anniversary of the effective date of his employment agreement, but no gross-up payment will be made if a determination is made that the payments required under the agreement are less than 110% of the safe harbor amount, where the safe harbor amount is 2.99 times the executive’s base amount as determined under Code Section 280G(b)(3). If not, the benefits would be reduced to an amount that would not trigger the excise tax.
In addition, the agreement contains a waiver provision that provides that the failure of either party to insist, in one or more instances, on performance by the other in strict accordance with the terms and conditions of the agreement shall not be deemed a waiver or relinquishment of any right granted in the agreement or of the future performance of any such term or condition or of any other term or condition of the agreement, unless such waiver is contained in a writing signed by the party making the waiver.
(c) Employment Agreement applicable to Mr. Schuessler
Mr. Schuessler’s employment agreement will remain in effect through May 31, 2015 with automatic renewals on a year to year basis unless either party provides notice that there will be no extension. Pursuant to his agreement, Mr. Schuessler is entitled to a minimum annual salary, subject to yearly review, plus an annual at-risk incentive bonus opportunity, which is based on the achievement of financial and performance objectives determined annually by the Compensation Committee. He is also entitled to participate in all incentive, savings and welfare benefit plans generally made available to all salaried employees of the Company.
Mr. Schuessler has agreed not to disclose confidential information or compete with the Company, and not to solicit the Company’s customers or recruit its employees, for a period of 24 months following the termination of his employment.
His employment agreement may be terminated by the Company at any time for “cause” or for no reason, or by him with or without “good reason” (as defined therein). The employment agreement will also be terminated upon the executive’s death, disability or retirement. Depending on the reason for the termination and when it occurs, he will be entitled to certain severance benefits, as described below, which may be delayed for such time as may be necessary to avoid a violation of Code Section 409A.
If, prior to a change in control, the executive’s employment is terminated by the Company without cause or he resigns for good reason, the Company will be required to pay such executive’s accrued salary and benefits through the date of termination, plus a pro-rata portion of his annual bonus for the year of termination, based upon actual performance against certified pre-established bonus targets. In addition:
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In addition, all of the executive’s restricted stock awards will vest, and those stock options that would have vested in the next 24 months will vest and remain exercisable for no more than 90 days from the date of termination. His performance-based restricted stock units will remain outstanding, and, after the Compensation Committee certifies the results at the end of the performance cycle in which the date of termination falls, he will receive 50% of the number of shares that vested based on the actual satisfaction of such performance requirements.
If, within 24 months after a change in control or in anticipation of a change in control, the executive’s employment is terminated by the Company without cause or he resigns for good reason, the Company will be required to pay his accrued salary and benefits through the date of termination. In addition, the Company will pay:
In addition, all of the executive’s restricted stock awards and stock options will vest, and the options will remain exercisable for no more than 90 days from the date of termination. His performance-basedseparation date. With respect to Mr. Todd’s stock options, restricted stock units will remain outstanding,unit awards and afterperformance share awards granted prior to the Compensation Committee certifies the results at the endclosing of the performance cycle in whichmerger with TSYS that were converted as described above into Company stock options and restricted stock unit awards, as applicable, upon the date of termination falls, he will receive 100%closing of the numbermerger with TSYS, such awards will vest in full (in the case of sharestime-vesting awards) orpro-rata (in the case of awards that vested based onwere performance share awards immediately prior to the actual satisfactionmerger with TSYS) upon termination due to death or disability, with stock options to remain exercisable for the remainder of such performance requirements.the applicable term.
Retirement. Whether or not a change in control shall have occurred,occurs, if the executive’sNEO’s employment is terminated by reason of his death, disability or retirement, hethe NEO will be entitled to receive accrued salary and benefits through the separation date of termination and any death, disability or retirementother benefits that may apply. In addition, allAll of the executive’sNEO’s performance units, restricted stock awards and stock options granted following the closing of the merger with TSYS (and, with respect to Messrs. Sloan, Bready, and Green and Dr. Sacchi, any such awards granted prior to the closing of the merger with TSYS) will vest. The numbervest (in the case of performance-based restricted stockperformance units, earned shall be determined based on actual performance as certified by the Committee at the end of the applicable performance cycle.cycle), and the options will remain exercisable for no more than 90 days following retirement. With respect to Mr. Todd’s stock options, restricted stock unit awards and performance share awards granted prior to the closing of the merger with TSYS that were converted as described above into Company stock options and restricted stock unit awards, as
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applicable, upon the closing of the merger with TSYS, Mr. Todd would not be entitled to additional vesting with respect to such awards given that Mr. Todd will not be retirement eligible pursuant to the terms of the TSYS equity plans prior to the time when such awards become fully vested pursuant to their terms.
Termination for Cause or Resignation Without Good Reason. If we terminate the Company terminates the executiveNEO for cause, or if hethe NEO resigns from the Company without good reason, hethe NEO will be entitled to receive accrued salary and benefits through the separation date, of termination, but no additional severance amount iswill be payable under the terms of histhe employment agreement.
For purposesChange in Control Without Termination of these employment agreements,Employment. Our compensation arrangements with our NEOs are “double trigger,” meaning that in order for the NEO to receive severance payments and for the vesting of any of an NEO’s awards to accelerate upon a change in control, there must be achange-in-control transaction as well as a termination of employment without cause or resignation for good reason within 24 months after the Company is generally definedchange in control (or, as the acquisition bydescribed above, a third partytermination in anticipation of 35% or more of the voting power of the Company, or the consummation of certain mergers, asset sales or other major business combinations. A restructuring or separation of any line of business of the Company will not, of itself, constitute a change in control.
control). In addition, the agreements contains a waiver provision that provides that the failurereceipt of either party to insist, in one or more instances, on performance by the other in strict accordance with the terms and conditions of the agreement shall not be deemed a waiver or relinquishment of any right granted in the agreement or of the future performance of any such term or condition or of any other term or condition of the agreement, unless such waiver is contained in a writing signed by the party making the waiver.
(d) Key Position Agreement with Mr. Garcia
Mr. Garcia and the Company entered into a Key Position Agreement on January 6, 2010. Pursuant to such agreement, at any time on or after July 31, 2013, Mr. Garcia (upon one year’s prior notice) can retire from the Company and receive
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certain benefits in exchange for certain restrictive covenants. He has agreed not to disclose confidential information, not to compete with the Company, not to solicit the Company’s customers, and not to recruit its employees for a period of 4 years following his retirement date. He has also agreed not to sell any of the stock accelerated as a part of the agreement for a period of 1 year after his retirement date. At the end of such one year period, he may only dispose of 25% of the accelerated shares per year, on a cumulative basis. In exchange for abiding by the restrictive covenants set forth above, Mr. Garcia will receive $500,000 per year plus either health insurance coverage or reimbursement pursuant to COBRA for up to 4 years. In addition, all of his restricted stock awards and stock options will vest, and the options will remain exercisable for 5 years. He will also be entitled to receive the restricted stock granted as a result of any performance-based incentive awards issued prior to the retirement date once the results for the applicable year are certified.
(2) Value of Potential Payments upon Termination or Change in Control.The following tables summarize the value of the terminationseverance payments and benefits, whether or not in connection with a change in control, requires the NEO to execute a release of claims in favor of the Company.
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Potential Payments Table
The following table sets forth quantitatively the potential post-employment payments that are described above for each of our Named Executive Officers would receive if such executive had terminatedNEOs. The potential payments to our NEOs are hypothetical situations only and assume that termination of employment and/orchange-in-control occurred on MayDecember 31, 2012 under the circumstances shown.2019. The amounts shown in the tablestable do not include payments and benefits to the extent they are provided on anon-discriminatory basis to salaried employees generally upon termination of employment. These includeemployment, such as accrued salary and distributions of plan balances under ourtax-qualified 401(k) plan. A terminationThe value of employment due to death or disability does entitle the executive to an acceleration of allvesting of his outstandingstock options, restricted stock and options, but since that is a provision ofperformance-based restricted stock units are calculated based on the incentive plans, the Named Executive Officers would not be entitled to any payments or benefits that are not available to salaried employees generally who are also participants in the plans. For the purposes of the tables below, we have assumed that the price of the Company’s stock was the$182.56 closing price on the first business day after MayDecember 31, 2012, which was $42.48.
Name and Form of Payment | Termination Without Cause; Resignation for Good Reason (No Change in Control) | Termination Without Cause or Resignation for Good Reason (Change in Control)(1) | Death or Disability | Retirement | Termination for Cause; Resignation Without Good Reason | ||||||||||||||||||||
Jeffrey S. Sloan | |||||||||||||||||||||||||
Base salary severance | $ | 2,000,000 | $ | 3,000,000 | $ | — | $ | — | $ | — | |||||||||||||||
Annual cash incentive bonus | 2,560,000 | 1,600,000 | — | — | — | ||||||||||||||||||||
Other cash severance | 3,200,000 | 4,800,000 | — | — | — | ||||||||||||||||||||
Restricted stock acceleration | 10,649,820 | 10,649,820 | 10,649,820 | 10,649,820 | — | ||||||||||||||||||||
Stock option acceleration(2) | 7,110,323 | 8,368,186 | 8,368,186 | 8,368,186 | — | ||||||||||||||||||||
Performance units | 28,067,791 | (3) | 32,585,317 | (4) | 25,691,851 | (5) | 60,184,738 | (6) | — | ||||||||||||||||
COBRA | 30,655 | 30,655 | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Total | $ | 53,618,590 | $ | 61,033,978 | $ | 44,709,857 | $ | 79,202,744 | $ | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Cameron M. Bready | |||||||||||||||||||||||||
Base salary severance | $ | 1,050,000 | $ | 1,400,000 | $ | — | $ | — | $ | — | |||||||||||||||
Annual cash incentive bonus | 1,113,832 | 805,000 | — | — | — | ||||||||||||||||||||
Other cash severance | 1,207,500 | 1,610,000 | — | — | — | ||||||||||||||||||||
Restricted stock acceleration | 2,882,622 | 2,882,622 | 2,882,622 | 2,882,622 | — | ||||||||||||||||||||
Stock option acceleration(2) | 1,892,322 | 2,263,953 | 2,263,953 | 2,263,953 | — | ||||||||||||||||||||
Performance units | 7,847,825 | (3) | 11,754,491 | (4) | 9,984,024 | (5) | 19,294,949 | (6) | — | ||||||||||||||||
COBRA | 30,655 | 30,655 | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Total | $ | 16,024,756 | $ | 20,746,721 | $ | 15,130,599 | $ | 24,441,524 | $ | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Paul M. Todd | |||||||||||||||||||||||||
Base salary severance | $ | 1,020,000 | $ | 1,360,000 | $ | — | $ | — | $ | — | |||||||||||||||
Annual cash incentive bonus | 316,116 | 714,000 | — | — | — | ||||||||||||||||||||
Other cash severance | 1,071,000 | 1,428,000 | — | — | — | ||||||||||||||||||||
Restricted stock acceleration | 4,846,603 | 157,732 | 3,609,394 | — | — | ||||||||||||||||||||
Stock option acceleration(2) | 3,081,138 | 1,578,755 | 3,081,138 | — | — | ||||||||||||||||||||
Performance units | 211,016 | (3) | 2,221,755 | 2,221,755 | (5) | 2,221,755 | (6) | — | |||||||||||||||||
COBRA | 24,778 | 24,778 | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Total | $ | 10,570,652 | $ | 7,485,057 | $ | 8,912,287 | $ | 2,221,755 | $ | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Guido F. Sacchi | |||||||||||||||||||||||||
Base salary severance | $ | 862,500 | $ | 1,150,000 | $ | — | $ | — | $ | — | |||||||||||||||
Annual cash incentive bonus | 850,565 | 575,000 | — | — | — | ||||||||||||||||||||
Other cash severance | 862,500 | 1,150,000 | — | — | — | ||||||||||||||||||||
Restricted stock acceleration | 1,445,510 | 1,445,510 | 1,445,510 | 1,445,510 | — | ||||||||||||||||||||
Stock option acceleration(2) | 1,219,070 | 1,419,204 | 1,419,204 | 1,419,204 | — | ||||||||||||||||||||
Performance units | 4,915,222 | (3) | 6,909,896 | (4) | 5,745,893 | (5) | 11,630,167 | (6) | — | ||||||||||||||||
COBRA | 34,784 | 34,784 | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Total | $ | 10,190,152 | $ | 12,684,395 | $ | 8,610,608 | $ | 14,494,882 | $ | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
David L. Green | |||||||||||||||||||||||||
Base salary severance | $ | 825,000 | $ | 1,100,000 | $ | — | $ | — | $ | — | |||||||||||||||
Annual cash incentive bonus | 774,690 | 550,000 | — | — | — | ||||||||||||||||||||
Other cash severance | 825,000 | 1,100,000 | — | — | — | ||||||||||||||||||||
Restricted stock acceleration | 1,114,346 | 1,114,346 | 1,114,346 | 1,114,346 | — | ||||||||||||||||||||
Stock option acceleration(2) | 981,285 | 1,132,785 | 1,132,785 | 1,132,785 | — | ||||||||||||||||||||
Performance units | 3,964,176 | (3) | 6,090,384 | (4) | 5,065,492 | (5) | 9,728,075 | (6) | — | ||||||||||||||||
COBRA | 30,655 | 30,655 | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Total | $ | 8,515,152 | $ | 11,118,171 | $ | 7,312,623 | $ | 11,975,206 | $ | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
55
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 63
Paul Garcia
Type of Payment | Termination by the Company other than for Cause or for Poor Performance or for Poor Performance or Resignation by Executive for Good Reason Prior to Change in Control | Termination for Poor Performance | Termination Without Cause or Resignation by Executive for Good Reason in Connection with a Change of Control | |||||||||||||||
Base salary severance (1) | $ | 500,000 | payable in a lump sum no less than 6 months after termination provided he does not violate restrictive covenants (2) | $ | 500,000 | payable in a lump sum no less than 6 months after termination provided he does not violate restrictive covenants (3) | $ | 500,000 | payable in a lump sum no less than 6 months after termination provided he does not violate restrictive covenants (4) | |||||||||
$0-$1,000,000 | salary continuation of up to 12 additional months (2) | $0-$500,000 | salary continuation of up to 6 additional months (3) | $0-$1,500,000 | salary continuation of up to 18 additional months (4) | |||||||||||||
Other cash severance | $ | 1,500,000 | 100% of target opportunity since termination is assumed to have occurred on May 31 | $1,500,000 | 100% of target opportunity since termination is assumed to have occurred on May 31 | $1,500,000 | 100% of target opportunity | |||||||||||
Restricted Stock Acceleration | $ | 3,766,532 | all | $ | 2,985,367 | 24 months | $ | 3,766,532 | all | |||||||||
Performance-Based Restricted Stock Unit Acceleration | 0 | none | 0 | none | 0 | none | ||||||||||||
Stock Option Acceleration | $ | 155,682 | 24 months | $ | 155,682 | 24 months | $ | 229,962 | all | |||||||||
Benefit Continuation | $ | 25,965 max. | up to 18 months | $ | 17,310 max. | up to 12 months | $ | 34,620 max. | up to 24 months | |||||||||
280G Tax Gross-Up | — | — | 0 |
Assumes a change in control occurred on December 31, |
For the purpose of this calculation, outstanding unvested options having an exercise price greater than the closing price of our common stock on such date have a |
Amount reflects 50% of the |
Amount reflects the number of shares that would be issued at (i) the target payout levels for |
2017 performance units).
Type of Payment | Voluntary Resignation or Termination for Cause | Death | Disability | Retirement | ||||||||||||||||||||||||||||
Base salary severance | 0 | none | 0 | none | 0 | none | 0 | none | ||||||||||||||||||||||||
Other cash severance | 0 | none | 0 | none | 0 | none | 0 | none | ||||||||||||||||||||||||
Restricted Stock Acceleration | 0 | none | $ | 3,766,532 | all | $ | 3,766,532 | all | 0 | none | ||||||||||||||||||||||
Performance-Based Restricted Stock Unit Acceleration | 0 | none | $ | 4,072,133 | | actual earned based on certified results | | $ | 4,072,133 | | actual earned based on certified results | | 0 | none | ||||||||||||||||||
Stock Option Acceleration | 0 | none | $ | 229,962 | all | $ | 229,962 | all | 0 | none | ||||||||||||||||||||||
Benefit Continuation | 0 | none | 0 | none | 0 | none | 0 | none |
56
Jeffrey Sloan
Type of Payment | Termination by the Company other than for Cause or Resignation by Executive for Good Reason | Termination Without Cause or Resignation by Executive for Good Reason in connection with a Change of Control | ||||||||||
Base salary severance (1) | $ | 309,000 - $927,000 | minimum of 6 months salary continuation but up to 18 months (2) | $ | 1,236,000 | 2 times base salary | ||||||
Other cash severance | $ | 490,669 | pro-rated actual bonus based upon certified results | $ | 1,575,900 | actual bonus earned based upon certified results or target opportunity (depending on when the change of control occurred) plus 2 times the then current bonus opportunity. | ||||||
Restricted Stock Acceleration | $ | 1,593,000 | all | $ | 1,593,000 | all | ||||||
Performance-Based Restricted Stock Unit Acceleration | $ | 585,374 | 50% of actual amount earned based upon certified results | $ | 1,170,749 | actual amount earned based upon certified results or 100% of target, depending on when the change of control occurred | ||||||
Stock Option Acceleration | $ | 13,000 | 24 months | $ | 19,500 | all | ||||||
Benefit Continuation | $ | 17,310 max | up to 12 months | $ | 25,964 max | up to 18 months | ||||||
280G Tax Gross-Up | — | 0 |
Amount reflects the number of shares that would be issued at (i) the target payout levels for |
2017.
Type of Payment | Voluntary Resignation or Termination for Cause | Death | Disability | Retirement | ||||||||||||||||||||||||||
Base salary severance | 0 | none | 0 | none | 0 | none | 0 | none | ||||||||||||||||||||||
Other cash severance | 0 | none | 0 | none | 0 | none | 0 | none | ||||||||||||||||||||||
Restricted Stock Acceleration | 0 | none | $ | 1,593,000 | all | $ | 1,593,000 | all | $ | 1,593,000 | all | |||||||||||||||||||
Performance-Based Restricted Stock Unit Acceleration | 0 | none | $ | 1,170,749 | | actual amount earned based | | $ | 1,170,749 | | actual amount earned based | | $ | 1,170,749 | | actual amount earned based on certified results | ||||||||||||||
Stock Option Acceleration | 0 | none | $ | 19,500 | all | $ | 19,500 | all | $ | 19,500 | all | |||||||||||||||||||
Benefit Continuation | 0 | none | 0 | none | 0 | none | 0 | none |
57
David Mangum
Type of Payment | Termination by the Company other than for Cause or Resignation by Executive for Good Reason | Termination Without Cause or Resignation by Executive for Good Reason in connection with a Change of Control | ||||||||||
Base salary severance (1) | $ | 265,000 - $795,000 | minimum of 6 months’ salary continuation but up to 18 months (2) | $ | 1,060,000 | 2 times base salary | ||||||
Other cash severance | $ | 421,956 | pro-rated actual bonus based upon certified results | $ | 1,350,000 | actual bonus earned based upon certified results or target opportunity (depending on when the change of control occurred) plus 2 times the then current bonus opportunity. | ||||||
Restricted Stock Acceleration | $ | 1,085,449 | all | $ | 1,085,449 | all | ||||||
Performance-Based Restricted | $ | 585,374 | 50% of actual amount earned based upon certified results | $ | 1,170,749 | actual amount earned based upon certified results or 100% of target, depending on when the change of control occurred | ||||||
Stock Option Acceleration | $ | 42,346 | 24 months | $ | 61,447 | all | ||||||
Benefit Continuation | $ | 17,310 max. | up to 12 months | $ | 25,965 max. | up to 18 months | ||||||
280G Tax Gross-Up | — | 0 |
Amount reflects the number of shares that would be issued at (i) 300% of target for |
Type of Payment | Voluntary Resignation or Termination for Cause | Death | Disability | Retirement | ||||||||||||||||||||||||||
Base salary severance | 0 | none | 0 | none | 0 | none | 0 | none | ||||||||||||||||||||||
Other cash severance | 0 | none | 0 | none | 0 | none | 0 | none | ||||||||||||||||||||||
Restricted Stock Acceleration | 0 | none | $ | 1,085,449 | all | $ | 1,085,449 | all | $ | 1,085,449 | all | |||||||||||||||||||
Performance-Based Restricted Stock Unit Acceleration | 0 | none | $ | 1,170,749 | | actual amount earned based | | $ | 1,170,749 | | actual amount earned based | | $ | 1,170,749 | actual amount earned based on certified results | |||||||||||||||
Stock Option Acceleration | 0 | none | $ | 61,447 | all | $ | 61,447 | all | $ | 61,447 | all | |||||||||||||||||||
Benefit Continuation | 0 | none | 0 | none | 0 | none | 0 | none |
64 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of RegulationS-K, we are providing the following information about the relationship of the median of the annual total compensation of our employees (excluding the Chief Executive Officer) and the annual total compensation of Jeffrey S. Sloan, our Chief Executive Officer. The pay ratio included in this information is a reasonable estimate calculated in a manner consistent with Item 402(u) of RegulationS-K. Given the different methodologies that various public companies will use to determine an estimate of their pay ratio, the estimated ratio reported below should not be used as a basis for comparison between companies.
For 2019, our last completed fiscal year:
The annual total compensation of the median employee was $56,040; and
The annual total compensation of our Chief Executive Officer, as reported in the Summary Compensation Table presented earlier in this Proxy, was $20,502,096 (which amount is exclusive of $15,046 in employer-provided health and welfare benefits).
Based on this information, for 2019, the ratio of the annual total compensation of the median employee to the annual total compensation of Mr. Sloan, our Chief Executive Officer, was 1 to 367.
To determine the annual total compensation of the “median employee,” the methodology and the material assumptions, adjustments and estimates that we used were as follows:
We selected December 31, 2019 as the date upon which we would identify the “median employee.”
We determined that, as of December 31, 2019, we had approximately 23,782 employees working at the Company and its consolidated subsidiaries.
As is permitted under SEC rules, we eliminated 1,010 global employees (approximately 4.25% of our total population) from the data set. A list of the excluded employees and their country of residency is provided in the table below.
Country | # of Employees | Country | # of Employees | Country | # of Employees | |||||
Austria | 4 | Italy | 1 | Romania | 10 | |||||
Belgium | 1 | Macao | 6 | Singapore | 23 | |||||
Brazil | 141 | Malaysia | 103 | Slovakia | 20 | |||||
Germany | 4 | Malta | 15 | Spain | 85 | |||||
Hong Kong | 142 | Mexico | 31 | Sri Lanka | 36 | |||||
Hungary | 51 | Netherlands | 130 | Taiwan | 51 | |||||
Ireland | 129 | New Zealand | 11 | United Arab Emirates | 16 |
To determine our “median employee” from our adjusted employee population, we used a consistently applied compensation definition and chose “base pay (actual).” We used a stratified statistical sampling methodology to provide a reasonable estimate of the median base pay for the employee population considered. We conducted an analysis using a sample of 23,782 employees. Then we identified employees who we expected were paid within approximately a +/- 10% range of that value, based on our assumptions that the median employee was likely to be within that group and that those within that group had substantially similarly probabilities of being the median employee. We then analyzed taxable wages for this group (annualizing pay for permanent employees who commenced work during 2019) to select a single median employee. We did not change our methodology or material assumptions, adjustments, or estimates from those used in our pay ratio disclosure for 2018.
Using this methodology, we determined that the “median employee” was a full-time, hourly employee located in the United States, with base pay (actual) for the12-month period ending December 31, 2019 in the amount of $46,763.
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 65
With respect to the annual total compensation of the “median employee,” we identified and calculated the elements of such employee’s compensation for 2019 in accordance with the requirements of Item 402(c)(2)(x) of RegulationS-K, resulting in annual total compensation of $56,040 (inclusive of the value of employer-provided health and welfare benefits).
With respect to the annual total compensation of our Chief Executive Officer, we used the amount reported in the “Total” column of the Summary Compensation Table, plus the value of employer-provided health and welfare benefits in the amount of $15,046, which was not included in the Summary Compensation Table.
Supplemental CEO Pay Ratio
We understand that the CEO pay ratio is intended to provide greater transparency to annual CEO pay and how it compares to the pay of the median employee. As such, we are providing a supplemental ratio that compares the Chief Executive Officer’s annual pay, excluding theone-time synergy performance unit award (see the “Synergy Awards” section), to the pay of the median-paid employee as we believe that this supplemental ratio reflects a more representative comparison. Using the same methodology above, the resulting supplemental CEO pay ratio is 286 to 1.
5866 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
Joseph HydeProposal Three: Approval of Amendments to our Articles of Incorporation to Eliminate the Supermajority Voting Requirements
After careful consideration and upon the recommendation of the Governance and Nominating Committee, the board has unanimously determined that it would be in the best interests of Global Payments and our shareholders to amend the Company’s Third Amended and Restated Articles of Incorporation, or the Articles of Incorporation, to remove supermajority voting thresholds and provide for holders of a majority of the total number of votes entitled to vote thereon to be able to take action on items that currently require the approval of the affirmative vote of the holders oftwo-thirds of the outstanding shares of common stock entitled to vote. The board is now asking the Company’s shareholders to approve the amendments to the Articles of Incorporation as described below.
Global Payments’ Current Supermajority Standards
The Articles of Incorporation currently require the affirmative vote of the holders oftwo-thirds of the shares of the Company’s total issued and outstanding common stock entitled to vote to take the following actions:
Type of Payment | Termination by the Company other than For Cause or For Poor Performance or Resignation by Executive for Good Reason | Termination for Poor Performance | Termination Without Cause or Resignation by Executive for Good Reason in connection with a Change of Control | |||||||||||||||
Base salary severance (1) | $ | 212,500 | payable in a lump sum no less than 6 months after termination provided he does not violate restrictive covenants (2) | $ | 212,500 | payable in a lump sum no less than 6 months after termination provided he does not violate restrictive covenants (3) | $ | 212,500 | payable in a lump sum no less than 6 months after termination provided he does not violate restrictive covenants (4) | |||||||||
$ | 0-$425,000 | salary continuation of up to 12 additional months (2) | 0-$ | 212,500 | salary continuation of up to 6 additional months (3) | $ | 0-$637,500 | salary continuation of up to 18 additional months (4) | ||||||||||
Other cash severance | $ | 159,375 | at least 50% of target opportunity is guaranteed | 0 | no bonus guaranteed | $ | 318,750 | 100% of target opportunity | ||||||||||
Restricted Stock Acceleration | $ | 757,588 | all | $ | 606,954 | 24 months | $ | 757,588 | all | |||||||||
Performance-Based Restricted Stock Unit Acceleration | 0 | none | 0 | none | 0 | none | ||||||||||||
Stock Option Acceleration | $ | 30,156 | 24 months | $ | 30,152 | 24 months | $ | 44,482 | all | |||||||||
Benefit Continuation | $ | 25,791 max | up to 18 months | $ | 25,791 max | up to 18 months | $ | 25,791 max | up to 18 months | |||||||||
280G Tax Gross-Up | — | — | 0 |
Pursuant to Article 3.2 of the Articles of Incorporation, to remove directors from the Board for cause, and
Pursuant to Article 5 of the Articles of Incorporation, to alter, amend or repeal the bylaws, including any bylaws adopted by the Board, and adopt new bylaws.
Proposed Amendments
If shareholders approve these amendments to the Articles of Incorporation, the holders of a majority of the total number of shares entitled to vote thereon will have the authority to (i) remove directors for cause and (ii) alter, amend, repeal or adopt bylaws, including any bylaws adopted by the board (the “Amendments”).
The board has already approved amendments to the Company’s bylaws to change the voting thresholds required to (i) remove directors for cause; (ii) call a special meeting of the shareholders; and (iii) alter, amend, repeal or adopt new bylaws, in each case from the affirmative vote of the holders oftwo-thirds of the shares of the Company’s total issued and outstanding common stock entitled to vote to the majority of the total number of votes entitled to vote, with such amendments to take effect upon the filing of the Amendments to the Articles of Incorporation with the Georgia Secretary of State. If this proposal is approved and after the Amendments become effective, the Company will no longer have any supermajority vote requirements under our governing documents or under Georgia law.
Type of Payment | Voluntary Resignation or Termination for Cause | Death | Disability | Retirement | ||||||||||||||||||||||||||||
Base salary severance | 0 | none | 0 | none | 0 | none | 0 | none | ||||||||||||||||||||||||
Other cash severance | 0 | none | 0 | none | 0 | none | 0 | none | ||||||||||||||||||||||||
Restricted Stock Acceleration | 0 | none | $ | 757,588 | all | $ | 757,588 | all | $ | 757,588 | all | |||||||||||||||||||||
Performance-Based Restricted Stock | 0 | none | $ | 763,536 | | actual earned based on certified results | | $ | 763,536 | | actual earned based on certified results | | 0 | none | ||||||||||||||||||
Stock Option Acceleration | 0 | none | $ | 44,483 | all | $ | 44,483 | all | $ | 44,483 | all | |||||||||||||||||||||
Benefit Continuation | 0 | none | 0 | none | 0 | none | 0 | none |
Rationale for Proposed Amendments
In January 2020, the board voted to approve the Amendments and to recommend that the Company’s shareholders approve the Amendments at the 2020 Annual Meeting of Shareholders.
The Company’s board is committed to strong corporate governance practices and regularly assesses ways to improve the Company’s practices. In determining whether to propose the Amendments, the board carefully considered various arguments in support of and against the Amendments. The board recognizes that a supermajority threshold for the removal of directors and amendment, repeal or adoption of bylaws may promote continuity and stability in the Company’s corporate governance practices. While the board continues to believe that these are important benefits, the board has also considered that supermajority requirements may have the effect of reducing the accountability of directors to shareholders, and recognizes the benefit of providing shareholders an opportunity to participate in corporate governance. The board also recognizes that a growing number of public companies have proposed eliminating supermajority voting requirements and these proposals have generally received strong support from shareholders.
59GLOBAL PAYMENTS INC. |2020 Proxy Statement– 67
Morgan SchuesslerIn view of the considerations described above, the board, upon the recommendation of its Governance and Nominating Committee, has unanimously determined to eliminate the supermajority voting threshold as proposed.
Text and Effectiveness of the Proposed Amendments
The complete text of the proposed amendments to Article III and Article V of the Articles of Incorporation is set forth below with deletions indicated by strike-throughs and additions indicated by underlining:
ARTICLE THREE
3.2 Removal. Directors may only be removed from the Board of Directors for cause and only at a special meeting of shareholders called for such a purpose by the affirmative vote of at leasta majoritytwo thirds (2/3)of the total number of votes of the then outstanding shares of the Corporation’s capital stock entitled to vote in the election of directors and only if notice of such proposal was contained in the notice of such meeting. Any vacancy in the Board of Directors resulting from such removal shall be filled in accordance with Section 3.3 hereof. For purposes of this Section, “cause” shall mean only (a) conviction of a felony, (b) declaration of unsound mind or order of a court, (c) gross dereliction of duty, (d) commission of an action involving moral turpitude, or (e) commission of an action which constitutes intentional misconduct or a knowing violation of law if such action in either event results both in an improper substantial personal benefit and a material injury to the Corporation.
ARTICLE FIVE
AMENDMENT OF BYLAWS
Except as otherwise provided in this Article Five, the Bylaws may be altered, amended or repealed, and new Bylaws may be adopted, by (a) the affirmative vote of the holders ofa majoritytwo thirds (2/3)of the shares of stock then outstanding and entitled to vote in the election of directors, or (b) the Board of Directors of the Corporation, but any Bylaw adopted by the Board of Directors may be altered, amended, or repealed, or new Bylaws may be adopted, by the affirmative vote of the holders ofa majoritytwo thirds (2/3)of the shares of stock entitled to vote in the election of directors. The shareholders may prescribe, by so expressing in the action they take in amending or adopting any Bylaw or Bylaws, that the Bylaw or Bylaws so amended or adopted by them shall not be altered, amended or repealed by the Board Directors. Notwithstanding the foregoing, Section 4.05 of the Bylaws may not be modified, amended or repealed except by the affirmative vote of the holders of a majority of the shares of stock then outstanding and entitled to vote in the election of directors.
VOTE REQUIRED
The affirmative vote of shareholders holding a majority of our issued and outstanding shares of common stock is required to approve the proposed amendments.
Type of Payment | Termination by the Company other than For Cause or Resignation by Executive for Good Reason | Termination Without Cause or Resignation by Executive for Good Reason in connection with a Change of Control | ||||||||||
Base salary severance (1) | $ | 175,000 | payable in a lump sum no less than 6 months after termination provided he does not violate restrictive covenants (2) | $ | 175,000 | payable in a lump sum no less than 6 months after termination provided he does not violate restrictive covenants (3) | ||||||
$ | 0-$350,000 | salary continuation of up to 12 additional months (2) | 0-$525,000 | salary continuation of up to 18 additional months (3) | ||||||||
Other cash severance | $ | 191,741 | Pro-rated actual bonus based upon certified results | $ | 611,741 | Pro-rated actual bonus based upon certified results plus 2 times the then current bonus opportunity. | ||||||
Restricted Stock Acceleration | $ | 557,975 | all | $ | 557,975 | all | ||||||
Performance-Based Restricted Stock Unit Acceleration | $ | 356,322 | 50% of actual amount earned based upon certified results | $ | 712,644 | 100% of actual amount earned based upon certified results | ||||||
Stock Option Acceleration | $ | 23,342 | 24 months | $ | 34,482 | all | ||||||
Benefit Continuation | $ | 25,813 max | up to 18 months | $ | 25,813 max | up to 18 months | ||||||
280G Tax Gross-Up | — | 0 | No provision contained in Agreement requiring Gross-up payment by Company |
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL
OF THE AMENDMENTS TO GLOBAL PAYMENTS’ ARTICLES OF INCORPORATION TO
ELIMINATE THE SUPERMAJORITY VOTING REQUIREMENTS.
Type of Payment | Voluntary Resignation or Termination for Cause | Death | Disability | Retirement | ||||||||||||||||||||||||||||
Base salary severance | 0 | none | 0 | none | 0 | none | 0 | none | ||||||||||||||||||||||||
Other cash severance | 0 | none | 0 | none | 0 | none | 0 | none | ||||||||||||||||||||||||
Restricted Stock Acceleration | 0 | none | $ | 558,017 | all | $ | 558,017 | all | $ | 558,017 | all | |||||||||||||||||||||
Performance- Based Restricted Stock Unit Acceleration | 0 | none | $ | 712,644 | | actual amount earned based on certified results | | $ | 712,644 | | actual amount earned based on certified results | | $ | 712,644 | | actual amount earned based on certified results | | |||||||||||||||
Stock Option Acceleration | 0 | none | $ | 34,482 | all | $ | 34,482 | all | $ | 34,482 | all | |||||||||||||||||||||
Benefit Continuation | 0 | none | 0 | none | 0 | none | 0 | none |
6068 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
REPORT OF THE AUDIT COMMITTEEProposal Four: Ratification of Reappointment of Independent Registered Public Accounting Firm
We are asking you to ratify the reappointment of Deloitte for the year ending December 31, 2020. Ratification of the selection of Deloitte as the Company’s independent registered public accounting firm is not required by the SEC or NYSE rules, Georgia law, the Company’s articles of incorporation or the Company’s bylaws. However, the board of directors is submitting the selection of Deloitte to shareholders for ratification as a matter of good corporate practice. If a majority of shareholders fail to ratify the selection, the Audit Committee will consider the selection of other independent public accountants for the year ending December 31, 2020.
Our Board of Directors recommends that you vote FOR the following resolution:
RESOLVED, that the appointment by the Audit Committee of the Company’s board of directors of Deloitte as the independent registered public accounting firm for the Company, to audit the financial statements of the Company and its subsidiaries for the year ending December 31, 2020, is ratified and approved.
The Audit Committee selects our independent public accountants. Our Audit Committee has determined that it is in the best interest of our Company and its shareholders to continue to retain Deloitte, who served during 2019, to serve as our independent registered public accounting firm for the year ending December 31, 2020, and the board has ratified the selection. A representative of Deloitte is expected to be present at the annual meeting. The representative will be given the opportunity to make a statement, if he or she desires to do so, and will be available to respond to appropriate questions from shareholders.
In accordance with applicable SEC rules, the Audit Committee issued the following report on February 19, 2020. The Audit Committee consisted of the following members as of such date: William B. Plummer (Chair), Robert H.B. Baldwin, Jr., Connie D. McDaniel and John T. Turner, each of whom is independent under the listing standards of the NYSE and the applicable rules and regulations promulgated by the SEC. The duties and responsibilities of the Audit Committee are set forth in a written Audit Committee charter, which is available on the Investor Relations section of our website atwww.globalpaymentsinc.com. The Audit Committee reviews the charter annually and, when appropriate, recommends any changes to the board for approval.
The primary responsibility of the Audit Committee is to oversee our financial reporting process on behalf of the Boardboard and to report the results of the Audit Committee’s activities to the Board.board. Management has the primary responsibility for the financial statements and reporting process, including the systems of internal control, and the independent registered public accounting firm (Deloitte) is responsible for auditing those financial statements in accordance with the standards of the Public Company Accounting Oversight Board, (United States)or the PCAOB, and issuing a report thereon.
The Audit Committee is directly responsible for the compensation, retention and oversight of the Company’s independent registered public accounting firm and meets with the Company’s internal auditors and independent registered public accounting firm, with and without management present (in person or by telephone), to discuss the scope, plan, status and results of their respective audits. In this context,addition, the Audit Committee meets with management and the independent public accounting firm to review the Company’s financial results and earnings press releases related thereto prior to their issuance.
In 2019, the Audit Committee held five meetings. Meeting agendas are established by the Audit Committee Chair, based on input from the Chief Financial Officer and the Chief Accounting Officer. During 2019, among other things, the Audit Committee:
met with the senior members of the Company’s financial management team at each regularly scheduled meeting;
held separate private sessions, during its regularly scheduled meetings, with each of the Company’s General Counsel, the independent registered public accounting firm, and the head of Internal Audit, at
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 69
which candid discussions regarding financial management, legal, accounting, auditing and internal control matters took place; |
received periodic updates on management’s processes to assess the adequacy of the Company’s internal control over financial reporting and the framework used to make the assessment;
received periodic updates from management on the Company’s financial risk management practices;
reviewed and discussed with management and Deloitte the Company’s earnings releases and quarterly reports on Form10-Q and annual report on Form10-K prior to filing with the SEC;
reviewed and approved the Company’s internal audit plan; and
participated, with representatives of management and Deloitte, in educational sessions about various relevant topics of interest to the Audit Committee.
Deloitte has served as the Company’s independent registered public accounting firm since 2002. Before retaining Deloitte for the year ending December 31, 2020, the Audit Committee evaluated Deloitte’s performance with respect to its services to the Company provided during 2019. In conducting this evaluation, the Audit Committee reviewed and discussed with management matters related to Deloitte’s independence, technical expertise and industry knowledge. The Audit Committee also reviewed Deloitte’s communications with the Audit Committee during 2019 and considered Deloitte’s tenure. In addition, in order to ensure continuing auditor independence, the Audit Committee periodically considers whether there should be a regular rotation of the independent public accounting firm. The Audit Committee ensures that the mandated rotation of Deloitte’s personnel occurs routinely.
In keeping with its responsibilities and the performance of its oversight function, the members of the Audit Committee as of February 19, 2020 have reviewed and discussed with management and Deloitte our audited financial statements as of December 31, 2019 and for the year ended May 31, 2012.twelve months then ended. The Audit Committee has discussed with Deloitte the matters required to be discussed by the statement onPCAOB Auditing StandardsStandard No. 61, as amended and as adopted by the Public Company Accounting Oversight Board in Rule 3200T.1301 (Communication with Audit Committees). The Audit Committee has received and reviewed the written disclosures and the letter from Deloitte required by the applicable requirements of the Public Company Accounting Oversight BoardPCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence and has discussed with Deloitte theirits independence. In addition, the Audit Committee has considered the compatibility ofnon-audit services with Deloitte’s independence. Based on the reviews and discussions referred to above, the members of the Audit Committee as of February 19, 2020 recommended to the Board of Directors that the audited financial statements referred to above be included in the Company’s annual reportour Annual Report on Form10-K for the year ended May 31, 2012 for filing2019 filed with the SEC.
AUDIT COMMITTEE
Michael W. Trapp, ChairpersonWilliam B. Plummer (Chair)
Gerald J. WilkinsRobert H.B. Baldwin, Jr.
Alan M. SilbersteinConnie D. McDaniel
John T. Turner
The following table presents the aggregate fees for professional services rendered by Deloitte during 2019 and 2018:
|
2019 |
2018 | ||||||||
Audit fees | $ | 6,512,400 | $ | 5,541,200 | ||||||
Audit-related fees | 495,661 | 170,750 | ||||||||
Tax fees | 2,797,420 | 2,025,323 | ||||||||
Other fees | — | — | ||||||||
|
|
|
| |||||||
Total | $ | 9,805,481 | $ | 7,737,273 | ||||||
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70 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
Audit fees. Audit fees represent fees for the audit of our annual financial statements, the reviews of the financial statements included in our Quarterly Reports on Form10-Q and the services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements.
Audit-related fees. Audit-related fees represent fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not included under “Audit fees” disclosed above. Each period includes fees for reports on service organization controls and other fees associated with various initiatives by the Company. In fiscal 2019, the fees were also for services provided in connection with our merger with TYSY. Specifically, the services in connection with the merger included consultations and procedures associated with the inclusion of unaudited pro forma condensed combined financial information in our Registration Statement on FormS-4 filed in connection with the merger.
Tax fees. Tax fees represent fees for tax compliance, tax consulting and advisory services. In 2019, $639,250 of the fees were for tax return preparation and compliance, and $2,158,170 were for tax consulting and advisory services. In 2018, $236,248 of the fees were for tax return preparation and compliance, and $1,789,075 were for tax consulting and advisory services related primarily to compliance with the JOBS Act
Audit CommitteePre-approval Policies
The Audit Committee must approve any audit services and any permissiblenon-audit services provided by Deloitte prior to the commencement of the services, and is responsible for the audit fee negotiations associated with the engagement. In making itspre-approval determination, the Audit Committee considers whether providing thenon-audit services is compatible with maintaining the auditor’s independence. To minimize relationships which could appear to impair the objectivity of the independent registered public accounting firm, it is generally the Audit Committee’s practice to restrict thenon-audit services that may be provided to us by our independent public accounting firm to audit-related services, tax services and merger and acquisition due diligence and integration services, but other permissiblenon-audit services are approved on acase-by-case basis.
The Audit Committee has delegated to the Chair of the Audit Committee the authority to approvenon-audit services by the independent registered public accounting firm within the guidelines set forth above, provided that the fees associated with the applicable engagement are not anticipated to exceed $250,000. Any decision by the Chair topre-approvenon-audit services must be presented to the full Audit Committee for ratification at its next scheduled meeting. All of the services described above were approved by the Audit Committee in accordance with the foregoing policy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE
REAPPOINTMENT OF DELOITTE AS THE COMPANY’S INDEPENDENT PUBLIC
ACCOUNTING FIRM.
GLOBAL PAYMENTS INC. |2020 Proxy Statement– 71
Relationships and Related Party Transactions
Related Party Transaction Policy
The board of directors has adopted a written policy for the review, approval or ratification of certain transactions with related parties of the Company. Transactions that are covered under the policy include any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships, in which: (1) the aggregate amount involved will or may be expected to exceed $100,000 in any calendar year; (2) the Company is a participant; and (3) any related party of the Company (such as an executive officer, director, nominee for election as a director or greater than 5% beneficial owners of Company stock, or their immediate family members) has or will have a direct or indirect material interest.
In determining whether to approve a related party transaction, the Audit Committee evaluates the relevant facts and circumstances, including the fairness of the terms of the transaction, the benefit of the transaction to the Company, the impact on a director or officer’s independence, the availability of the goods or services from other sources and other facts considered material by the Audit Committee.
The policy does not apply to transactions which occurred, or in the case of ongoing transactions, transactions which began prior to the date of the adoption of the policy by the board.
Related Party Transactions
Charles D. Todd, the brother of Paul M. Todd, the Company’s Senior Executive Vice President and Chief Financial Officer, is employed by the Company as a vice president and assistant treasurer following the completion of the merger with TSYS. Charles D. Todd received $198,892 in compensation from the Company during 2019.
A copy of our Annual Report on Form10-K for 2019, including the financial statements and financial statement schedules (but without exhibits), will be provided, free of charge, upon written request of any shareholder addressed to Global Payments Inc., 3550 Lenox Road, Suite 3000 Atlanta, Georgia 30326, Attention: Investor Relations. Additionally, our Annual Report on Form10-K is available on the SEC’s web site atwww.sec.gov.
Shareholders Sharing the Same Address
The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements with respect to two or more shareholders sharing the same address by delivering to that address a single proxy statement to those shareholders. This process, which is commonly referred to as “householding,” provides convenience for shareholders and cost savings for companies. Some brokers household proxy materials, delivering a single proxy statement to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker or us that they or we will be householding materials to your address, householding will continue until you are notified otherwise or until you notify us or your broker that you no longer wish to participate in householding. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement, or if you are receiving multiple copies of the proxy statement and wish to receive only one copy, please notify your broker if your shares are held in a brokerage account, or notify us if you hold registered shares. You can notify us by sending a written request to Global Payments Inc., c/o Corporate Secretary, 3550 Lenox Road, Suite 3000, Atlanta, Georgia 30326 or by contacting Investor Relations at Investor.Relations@globalpay.com or (770)829-8478.
Delinquent Section 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEReports
Based solely on a review of copies of Forms 3 and 4 filed with the SEC, or written representations that no annual forms (Form 5) were required, we believe that, during the 2011 fiscal year,2019, all of our officers, directors and 10% shareholders complied with the reporting requirements of the SEC regarding their ownership and changes in ownership of Common Stockour common stock (as required pursuant to Section 16(a) of the Securities Exchange Act of 1934)Act), except for one late Form 4 filed by Mr. Garcia on [ ], 2012, reflecting his transfer of 75,438 shares to a grantor retained annuity trust.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We review all relationships and transactions in which the Company and our directors and executive officers or their immediate family members are participants to determine whether they qualify for disclosure as a transaction with related persons under Item 404(a) of Regulation S-K of the Securities Exchange Act of 1934. Management screens for these relationships and transactions through the annual circulation of a Directors and Officers Questionnaire (“D&O Questionnaire”) to each member of the Board of Directors and each officer of the Company that is a reporting person under Section 16 of the Securities Act of 1934. The D&O Questionnaire contains questions intended to identify related persons and transactions between the Company and related persons. In addition, our Employee Code of Conduct and Ethics requires employees to report to the General Counsel or Chief Executive Officer any transaction involving themselves or their immediate family members and the Company that may create a conflict of interest with the Company, and further requires the Chief Executive Officer to approve in writing any such transaction withfollowing exceptions: a related person. The members of our disclosure committee also identify any potential related-person transactions. If our management identifies a transaction with a related person, the Audit Committee Charter requires that such transaction be brought to the attention of the Audit Committee for its approval of the financial disclosure pertaining to such transaction. Since June 1, 2008, there have been no transactions with related persons required to be disclosed pursuant to Item 404 of Regulation S-K.
6172 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
ADDITIONAL INFORMATION
The costForm 4 with respect to each of soliciting proxies will be borneMessrs. Todd and Woods reported an incorrect number of shares owned as a result of an error by us; however, shareholders voting electronically (via phone or the Internet) should understand that there may be costs associated with electronic access, such as usage charges from Internet service providers or telephone companies. In addition to solicitation of shareholders of record by mail, telephone, or personal contact, arrangements will be made with brokerage houses to furnish proxy materials to their principals,our third party equity plan administrator and we may reimburse them for mailing expenses. Custodians and fiduciaries will be supplied with proxy materials to forward to beneficial owners of Common Stock. We have also engaged Georgeson to solicit proxies on our behalf and we estimate that the fees for such services will not exceed $15,000.
Only proper proposals under Rule 14a-8 of the Securities Exchange Act of 1934 that are timely received will be included in the proxy statement and proxy for the 2013 annual meeting of shareholders. Notice of shareholder proposals will be considered untimely if received by us after April 20, 2013. If we do not receive notice of any matter that a shareholder wishes to raise at the 2013 annual meeting no later than 45 calendar days before the first anniversary of the date on which this proxy statement is first mailed by the Company, which is expectedhad to be August 10, 2012, and a matter is properly raised at such meeting, the proxies grantedamended. All errors have been corrected in connection with that meeting will have discretionary authority whether or not to vote on the matter.subsequent filings.
We will maintain a list of shareholders entitled to vote at the Annual Meetingannual meeting at our corporate offices at 10 Glenlake Parkway, North Tower,3550 Lenox Road, Atlanta, Georgia 30328-3473.GA 30326. The list will be available for examination at the Annual Meeting.annual meeting.
A copy of our Annual Report on Form 10-K, including the financial statements and financial statement schedules (but without exhibits) for the fiscal year ended May 31, 2012, will be provided, free of charge, upon written request of any shareholder addressed to Global Payments Inc., 10 Glenlake Parkway, North Tower, Atlanta, Georgia 30328-3473, Attention: Jane Elliott, Investor Relations. Additionally, the EDGAR version of our Form 10-K is available on the Internet on the SEC’s web site (www.sec.gov).
The closing price of the Common Stock, as reported by the New York Stock Exchange on , 2012 was $ .
We have adopted an Employee Code of Conduct and Ethics, a Director Code of Conduct and Ethics, and a Code of Ethics for Senior Financial Officers, all of which are available on our website at www.globalpaymentsinc.com and will be provided free of charge, upon written request of any shareholder addressed to Global Payments Inc., 10 Glenlake Parkway, North Tower, Atlanta, Georgia, 30328-3473, Attention: Investor Relations.
We intend to post amendments to or waivers from the Code of Ethics for Senior Financial Officers on our website at www.globalpaymentsinc.com.
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APPENDIX A
SECOND AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
GLOBAL PAYMENTS INC.|2020 Proxy Statement– 73
ARTICLE ONE
NAME
The name of the corporation is Global Payments Inc. (the “Corporation”).
ARTICLE TWO
CAPITALIZATION
The Corporation shall have authority, to be exercised by the board of directors, to issue no more than (i) Two Hundred Million (200,000,000) shares of common stock, without par value, which shall be entitled to one vote per share and shall be entitled to receive the net assets of the Corporation upon dissolution and (ii) Five Million (5,000,000) shares of preferred stock, without par value. Shares of preferred stock may be issued from time to time in one or more classes or series, each such class or series to be so designated as to distinguish the shares thereof from the shares of all other classes and series. The Board of Directors is hereby vested with the authority to divide preferred stock into classes or series and to fix and determine the relative rights, preferences, qualifications, and limitation of the shares of any class or series so established.
ARTICLE THREE
BOARD OF DIRECTORS
3.1 Classified Board of Directors.The number of directors of the Corporation shall be as fixed from time to time by or pursuant to the Corporation’s Bylaws. The directors shall be divided into three classes, Class I, Class II and Class III. At the annual shareholders meeting in 2001, the terms of the initial Class I directors shall expire and a new Class I shall be electedPerformance Metrics for a term expiring at the third annual meeting of shareholders following their election and upon the election and qualification of their respective successors; at the annual shareholders meeting in 2002, the terms of the initial Class II directors shall expire and a new Class II shall be elected for a term expiring at the third annual meeting of shareholders following their election and upon the election and qualification of their respective successors; and at the annual shareholders meeting in 2003, the terms of the initial Class III directors shall expire and a new Class III shall be elected for a term expiring at the third annual meeting of shareholders following their election and upon the election and qualification of their respective successors. At each succeeding annual meeting of shareholders, successors to the class of directors whose term expires at the annual meeting of shareholders shall be elected for a term expiring at the third annual meeting of shareholders following their election and upon the election and qualification of their respective successor.
3.2 Removal. Directors may only be removed from the Board of Directors for cause and only at a special meeting of shareholders called for such a purpose by the affirmative vote of at least two-thirds (2/3) of the total number of votes of the then outstanding shares of the Corporation’s capital stock entitled to vote in the election of directors and only if notice of such proposal was contained in the notice of such meeting. Any vacancy in the Board of Directors resulting from such removal shall be filled in accordance with Section 3.4 hereof. For purposes of this Section, “cause” shall mean only (a) conviction of a felony, (b) declaration of unsound mind or order of a court, (c) gross dereliction of duty, (d) commission of an action involving moral turpitude, or (e) commission of an action which constitutes intentional misconduct or a knowing violation of law if such action in either event results both in an improper substantial personal benefit and a material injury to the Corporation.
3.3 Vacancies and Changes of Authorized Number.All vacancies and any newly created directorship resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although fewer than a quorum, or by a sole remaining director. Each director chosen in accordance with this Section shall hold office until the next election of the class for which such director shall have been chosen, and until such director’s successor is elected and qualified, or until the director’s earlier death, resignation or removal; provided, however that a director chosen in accordance with this Section to fill a newly-created directorship shall hold office only until the next election of directors by the shareholders and until such director’s successor is elected and qualified, or until the director’s earlier death, resignation or removal.
63
3.4 Amending or Repealing Article Three. Notwithstanding any provision hereof, or of the Bylaws or any law which might otherwise permit a lesser vote, the affirmative vote of the holders of at least two-thirds (2/3) of all classes of stock entitled to vote in the election of directors shall be required to alter, amend or repeal this Article Three.
ARTICLE FOUR
CONSTITUENCY CONSIDERATIONSDetermining Short-Term Cash Incentives
In discharging the duties of their respective positionsthis proxy statement, we disclose performance goals related to cash incentive awards under our short-term incentive plan based on adjusted EPS, adjusted net revenue plus network fees and in determining what is believed to be in the best interests of the Corporation, the Board of Directors, committees of the Board of Directors, and individual directors, in addition to considering the effects of any action on the Corporation or its shareholders, may consider the interests of the employees, customers, suppliers, and creditors of the Corporation, the communities in which offices or other establishments of the Corporationadjusted operating margin. These performance metrics, as used herein, are located, and all other factors such directors consider pertinent; provided, however, that this Article shall be deemed solely to grant discretionary authority to the directors and shall not be deemed to provide to any constituency and right to be considered.
ARTICLE FIVE
AMENDMENT OF BYLAWS
Except as otherwise provided in this Article Five, the Bylaws may be altered, amended or repealed, and new Bylaws may be adopted, by (a) the affirmative vote of the holders of two-thirds (2/3) of the shares of stock then outstanding and entitled to vote in the election of directors, or (b) the Board of Directors of the Corporation, but any Bylaw adopted by the Board of Directors may be altered, amended, or repealed, or new Bylaws may be adopted, by the affirmative vote of the holders of two-thirds (2/3) of the shares of stock entitled to vote in the election of directors. The shareholders may prescribe, by so expressing in the action they take in amending or adopting any Bylaw or Bylaws, that the Bylaw or Bylaws so amended or adopted by them shall not be altered, amended or repealed by the Board of Directors. Notwithstanding the foregoing, Section 4.05 of the Bylaws may not be modified, amended or repealed except by the affirmative vote of the holders of a majority of the shares of stock then outstanding and entitled to vote in the election of directors.
ARTICLE SIX
LIMITATION OF DIRECTOR LIABILITY
6.1 Limitation of Liability.A director of the Corporation shall not be liable to the Corporation or its shareholders for monetary damages for any action taken, or any failure to take any action, as a director, except liability:
(i) for any appropriation, in violation of his or her duties, of any business opportunity of the Corporation;
(ii) for acts or omissions which involve intentional misconduct or a knowing violation of law;
(iii)calculated for the typessole purpose of liability setdetermining compensation. Set forth in Section 14-2-832 ofbelow is a methodology for determining, and the Georgia Business Corporation Code; or
(iv)rational for any transaction from which the director received an improper personal benefit.
6.2 Repeal or Modification of this Article.Any repeal or modification of the provisions of this Article by the shareholders of the Corporation shall be prospective only and shall not adversely affect any limitation on the liability of a director of the corporation with respect to any act or omission occurring prior to the effective date of such repeal or modification.
6.3 Additional Provisions.If the Georgia Business Corporation Code is amended, after this Article becomes effective, to authorize corporate action further eliminating or limiting the liability of directors, then, without further corporate action, the liability of a director of the Corporation, in addition to the limitation on liability provided herein, shall be limited to the fullest extent permitted by the Georgia Business Corporation Code, as so amended.
64
6.4 Severability.In the event that any of the provisions of this Article (including any provision within a single sentence) is held by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable, the remaining provisions are severable and shall remain enforceable to the fullest extent permitted by law.
* * *
These Second Amended and Restated Articles of Incorporation contain amendments requiring shareholder approval and were duly adopted in accordance with the applicable provisions of Section 14-2-1003 of the Georgia Business Corporation Code by the Board of Directors of the Corporation on July 24, 2012 and by the shareholders of the Corporation on September [ ], 2012
These Second Amended and Restated Articles of Incorporation supersede the Amended and Restated Articles of Incorporation and all amendments thereto.
IN WITNESS WHEREOF, the Corporation has caused these Second Amended and Restated Articles of Incorporation to be executed by its duly authorized officer on this day of , 2012.
Metric |
| |||
Definition | Rationale for Use | |||
Adjusted EPS | Adjusted EPS is calculated by dividing adjusted net income attributable to the Company, excluding the impact of foreign currency exchange rates, by the diluted weighted-average number of shares outstanding. Adjusted net income attributable to the Company for 2019 reflects adjustments to remove (i) amortization of acquired intangibles; (ii) employee termination costs; (iii) acquisition and integration costs; (iv) share-based compensation expense; (v) a gain recognized on the partial sale of our investment in Brazil; (vi) charges from interest expense in connection with the merger with TSYS that relate to the bridge facility the Company entered into, thewrite-off of debt issuance fees in connection with the refinancing of our credit facility and interest expense, net of interest income on new senior notes attributable to the period between issuance and merger close; and (vii) the income tax effect of the aforementioned adjustments. | Adjusted EPS is a primary metric management uses to more clearly focus on the economic benefits to our core business and other factors we believe are pertinent to the daily management of our operations. | ||
Adjusted Net Revenue Plus Network Fees | Adjusted net revenue plus network fees for 2019 excludes(i) gross-up related payments associated with certain lines of business to reflect the economic benefits to the Company; (ii) the effect of acquisition accounting fair value adjustments for software-related contract liabilities associated with acquired businesses, and includes certain amounts that we pay to third parties, including payment networks. | Adjusted net revenue plus network fees is used to set goals for and to determine incentive compensation. | ||
Adjusted Operating Margin | Adjusted operating margin is calculated by dividing adjusted operating income, by adjusted net revenue plus network fees; both measures exclude the impact of foreign currency exchange rates. | Adjusted operating margin allows us to assess the quality and efficiency of our operations to promote a long-term outlook. |
Adjusted EPS, adjusted net revenue plus network fees and adjusted operating margin should be considered in addition to, and not as a substitute for, GAAP diluted earnings per share, revenue and operating income, respectively. Because these performance metrics, as used herein, are calculated for the sole purpose of determining compensation, they may differ from thenon-GAAP financial measures reported elsewhere in Company filings.
6574 – GLOBAL PAYMENTS INC. |2020 Proxy Statement
MMMMMMMMMMMM MMMMMMMMMMMMMMM C123456789 IMPORTANT ANNUAL MEETING INFORMATION 000004 000000000.000000 ext 000000000.000000 ext ENDORSEMENT_LINE. SACKPACK 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext MR A SAMPLE Electronic Voting Instructions DESIGNATION (IF ANY) Available 24 hours aGLOBAL PAYMENTS INC. 3550 LENOX ROAD, SUITE 3000 ATLANTA, GA 30326 SCAN TO VIEW MATERIALS & VOTE w Use VOTE the BY Internet INTERNET to transmit —www your .proxyvote voting instructions .com or scan and the for QR electronic Barcode delivery above of or information thecut-off date up until . Have 11:59 your P .proxy M. Eastern card in Time hand the when day 7 days a week! ADD 1 Instead ofbefore you access the meeting the web date site voting and follow instruction the instructions form. to obtain your records and to create an electronic ELECTRONIC If you would like DELIVERY to reduce OF the FUTURE costs incurred PROXY by MATERIALS Global Payments Inc. in mailing cards proxy and materials, annual you reports can consent electronically to receiving viae-mail all future or the proxy Internet statements, . To sign up proxy for electronic and, when delivery, prompted, please indicate follow that the instructions you agree to above receive to vote or access using shareholder the Internet communications electronically in future years. VOTE Use any BY touch PHONE -tone —1 telephone-800-690-6903 to transmit your voting instructions up until Have 11:59 your P.M ..proxy Eastern card Time in hand the day when before you call the and meeting then date follow or the the instructionscut-off date . . Mark, VOTE BY sign MAIL and date your proxy you may choose one ofcard and return it in the voting ADD 2 methods outlined below to vote your proxy. ADD 3 ADD 4 VALIDATION DETAILS ARE LOCATEDpostage-paid 51 envelope Mercedes we have Way, provided Edgewood, or return NY 11717 it to. Vote Processing, c/o Broadridge, TO VOTE, MARK BLOCKS BELOW IN THE TITLE BAR. MMMMMMMMM ADD 5 Proxies 1:00 a.m. submitted , Central Time, by the on Internet September or telephone 19, 2012. must be received by ADD 6 Vote by Internet • Go to www.envisionreports.com/GPN • Or scan the QR code with your smartphone • Follow the steps outlined on the secure website Vote by telephone • Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone • Follow the instructions provided by the recorded message Using a black ink pen, mark your votes with an X as shown in X this example. Please do not write outside the designated areas. Annual Meeting Proxy Card 1234 5678 9012 345 3IF YOU HAVE NOT VOTED VIA THE INTERNETBLUE OR TELEPHONE, FOLD ALONG THE PERFORATION,BLACK INK AS FOLLOWS: E91286-P34767 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY GLOBAL PAYMENTS INC. THE BOTTOM PORTIONBOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL NOMINEES IN THE ENCLOSED ENVELOPE.PROPOSAL 1 AND “FOR” PROPOSALS 2, 3, A Proposals — The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposals 2 throughAND 4. 1. Election of Class IIITwelve Nominees as Directors: For Withhold For Withhold For Withhold + 01—Alex W. Hart* 02—William I Jacobs* 03—Alan M. Silberstein* * and Each qualified to serve or until until the their 2015 respective Annual Meeting earlier resignation, of Shareholders, retirement, or until disqualification, their respective removal successors from office are elected or death. For Against Abstain 1a. F. Thaddeus Arroyo ! ! ! For Against Abstain 1b. Robert H.B. Baldwin, Jr. ! ! ! 1i. William B. Plummer ! ! ! 1c. John G. Bruno ! ! ! 1j. Jeffrey S. Sloan ! ! ! 1d. Kriss Cloninger III ! ! ! 1k. John T. Turner ! ! ! 1e. William I Jacobs ! ! ! 1l. M. Troy Woods ! ! ! 1f. Joia M. Johnson ! ! ! 2. ToApproval, compensation on of an our advisory named approve, executive basis, officers of the ! ! ! for 2019. 1g. Ruth Ann Marshall ! ! ! 3. Approval incorporation of amendments to eliminate to supermajority our articles of ! ! ! 1h. Connie D. McDaniel voting requirements. ! ! ! 4. R Deloitte a t i f i c a & t i Touche o n o f LLP t h e as a p our p o independent i n t m e n t o f ! ! ! For address changes and/or comments, please check this box public accounting firm for the year ending ! December 31, 2020. and write them on an officers. advisory basis, the compensationback where indicated. The undersigned hereby acknowledges receipt of our 3. ToNOTICE of Incorporation. approve the Second AmendedANNUAL MEETING and Restated Articles 4. To Company’s ratify the independent reappointment public of Deloitte accountants. & Touche LLPPROXY STATEMENT and hereby revokes all Proxies previously given by the undersigned for the ANNUAL MEETING. Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the B Non-Voting Items Change of Address — Please print new address below. C Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Belowsigner is a corporation, please Please give sign full exactlycorporate name by duly authorized officer, giving full title as as your such. name If a corporation, appears on please your stock sign certificate in full corporate and date. name Where by president shares are or held other jointly, authorized each shareholder officer. Ifsigner is a partnership, should sign. please When signing sign in partnership as executor, name administrator, by authorized trustee, person. or guardian,Signature [PLEASE SIGN WITHIN BOX] Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. C 1234567890 J N T MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MMMMMMM3 3 A V 1 4 2 0 7 4 1 MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND + 01I6RC(Joint Owners) Date
DirectionsImportant notice regarding the Internet availability of proxy materials for the Annual Meeting of Shareholders: The Notice and Proxy Statement and the 2019 Annual Report to Global Payments Corporate Headquarters Global Payments Inc. 10 Glenlake Parkway NE, North Tower Atlanta, GA 30328-3473 770.829.8000 Using GA 400 North, take exit 5B (Sandy Springs) and drive west on Abernathy Road about one block. Turn right on Glenlake Parkway. 10 Glenlake Parkway is the first drive on the left. (The North Tower is the building to your right upon entering the circular drive). Using GA 400 South, exit 5 Abernathy Road and follow instructions above. 3IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. 3 Proxy —Shareholders are available at: www.proxyvote.com E91287-P34767 GLOBAL PAYMENTS INC. 20123550 LENOX ROAD, SUITE 3000, ATLANTA, GEORGIA 30326 ANNUAL MEETING OF SHAREHOLDERS THIS PROXY ISOF GLOBAL PAYMENTS INC. TO BE HELD APRIL 29, 2020 SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF GLOBAL PAYMENTS INC. AND MAY BE REVOKED BY THE SHAREHOLDER PRIOR TO ITS EXERCISE The undersigned shareholder of Global Payments Inc. (the “Company”), Atlanta, Georgia,By signing on the reverse side, I hereby constitutesappoint Jeffrey S. Sloan and appoints Paul R. Garcia or Suellyn P. Tomay or either oneDavid L. Green as Proxies, each of them singly and each with full power of substitution, to vote the number ofall shares of Common Stock of Global Payments Inc. of the undersigned or with respect to which the undersigned would beis entitled to vote if personally presenton March 6, 2020 at the ANNUAL MEETING OF SHAREHOLDERS OF GLOBAL PAYMENTS INC. to be held on April 29, 2020, and at any adjournments or postponements thereof. The Board of Directors is not aware of any matters likely to be presented for action at the Annual Meeting of shareholders to be held atShareholders of Global Payments Inc., other than the Company’s offices at 10 Glenlake Parkway, North Tower, Atlanta, Georgia 30328, on September 19, 2012, at 11:00 a.m., Atlanta time (the “Annual Meeting”), or at any adjournments or postponements thereof, upon the proposals described in the Notice of 2012 Annual Meeting of Shareholders and Proxy Statement, both dated August 10, 2012, the receipt of which is acknowledged, in the manner specified below. The proxies, in their discretion, are further authorized to vote on any adjournments or postponements of the Annual Meeting, for the election of one or more person to the Board of Directorsmatters listed herein. However, if any of the nominees named herein becomes unable to serve or for good cause will not serve, on matters which the Board of Directors does not know a reasonable time before making the proxy solicitations will be presented at the Annual Meeting, or any other matters which mayare properly comebrought before the Annual Meeting, and any adjournments or postponements thereto. This proxy, when properly executed, will be votedthe persons named in the manner directed by the undersigned shareholder. If no direction is made, this Proxy or their substitutes will be votedvote upon such other matters in accordance with their best judgment. This Proxy is revocable at any time prior to its use. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED. IN THE ABSENCE OF SPECIFIC INSTRUCTIONS, THIS PROXY WILL BE VOTED “FOR” election of the director nominees named in ProposalALL DIRECTOR NOMINEES IN PROPOSAL 1 AND “FOR” ProposalPROPOSALS 2, relating to the advisory vote3, AND 4, AND ACCORDING TO THE DISCRETION OF THE PROXY HOLDERS ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY POSTPONEMENT OR ADJOURNMENT THEREOF. IF YOU DO NOT VOTE BY PHONE OR OVER THE INTERNET, PLEASE VOTE, DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. Address Changes/Comments: (If you noted any Address Changes/Comments above, please mark corresponding box on the compensationreverse side.) (Continued and to be signed on the reverse side.)
*** Exercise Your Right to Vote *** Important Notice Regarding the Availability of our named executive officers, “FOR” Proposal 3 relatingProxy Materials for the Shareholder Meeting to the Second Amended and Restated Articles of Incorporation, and “FOR” reappointment of Deloitte & Touche LLP as the Company’s independent public accountants, and with discretionary authorityBe Held on all other matters that may properly come before theApril 29, 2020. Meeting Information GLOBAL PAYMENTS INC. Meeting Type: Annual Meeting and any adjournments or postponements thereof. YOU MAY VOTE BY TELEPHONE, THE INTERNET, OR U.S. MAIL. If you are voting by telephone or the Internet, please do not mail your proxy.
NNNNNNNNNNNN + C 1234567890 IMPORTANT ANNUAL MEETING INFORMATION 000004 NNNNNN ENDORSEMENT_LINE SACKPACK MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 NNNNNNNNN ADD 5 ADDFor holders as of: March 6, Vote by Internet • Go to www.envisionreports.com/GPN • Or scan the QR code with your smartphone Follow the steps outlined on the secure website Shareholder Meeting Notice 1234 5678 9012 345 Global Payments Important Inc. Notice Annual Regarding Shareholder the Availability Meeting to of be Proxy Held Materials on September for the 19, 2012 Under Securities and Exchange Commission rules, you2020 Date: April 29, 2020 Time: 9:30 a.m. EDT Location: 3550 Lenox Road Atlanta, GA 30326 You are receiving this communication because you hold shares in the company named above. GLOBAL PAYMENTS INC. 3550 LENOX ROAD, SUITE 3000 This is not a ballot. You cannot use this notice that the proxy materials for the annual shareholders’ meeting are available on the Internet. Follow the instructions below to view the materials and vote online or request a copy. The items to be voted on and location of the annual meeting are on the reverse side. Your vote is important!these ATLANTA, GA 30326 shares. This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. You may view the proxy materials online at www.proxyvote.com, scan the QR Barcode on the reverse side, or easily request a paper copy (see reverse side). We encourage you to access and review all of the important information contained in the proxy materials before voting. TheP34767 See proxy statementthe materials reverse and annual reportside voting of this instructions notice to shareholders are available at: www.envisionreports.com/GPN Easy Onlineobtain . E91289—
Before You Vote How to Access — A Convenient Way to View Proxy Materials and Vote 3 When you go online to view materials, you can also vote your shares. Step 1: Go to www.envisionreports.com/GPN to view the materials. Step 2: Click on Cast Your Vote or Request Materials. Step Step 3: 4: Follow Make your the instructions selection as on instructed the screen on each to log screen in. to select delivery preferences and vote. When you go online, you can also help the environment by consenting to receive electronic delivery of future materials. Obtaining a Copy of the Proxy Materials –Proxy Materials Available to VIEW or RECEIVE: NOTICE AND PROXY STATEMENT 2019 ANNUAL REPORT How to View Online: Have the information that is printed in the box marked by the arrow XXXX XXXX XXXX XXXX (located on the following page) and visit: www.proxyvote.com, or scan the QR Barcode below. How to Request and Receive a PAPER orE-MAIL Copy: If you want to receive a paper ore-mail copy of these documents, you must request one. There is noNO charge to you for requesting a copy. Please choose one of the following methods to make your request forrequest: 1) BY INTERNET: www.proxyvote.com 2) BY TELEPHONE:1-800-579-1639 3) BYE-MAIL*: sendmaterial@proxyvote.com * If requesting materials bye-mail, please send a copyblanke-mail with the information that is printed in the box marked by the arrow XXXX XXXX XXXX XXXX (located on the following page) in the subject line. Requests, instructions and other inquiries sent to thise-mail address will NOT be forwarded to your investment advisor. Please make the request as instructed on the reverse sideabove on or before September 9, 2012April 15, 2020 to facilitate timely delivery. How To Vote SCAN TO VIEW MATERIALS & VOTE w Please Choose One of the Following Voting Methods Vote In Person: Many shareholder meetings have attendance requirements including, but not limited to, the possession of an attendance ticket issued by the entity holding the meeting. Please check the meeting materials for any special requirements for meeting attendance. At the meeting, you will need to request a ballot to vote these shares. Vote By Internet: Go to www.proxyvote.com or from a smartphone, scan the QR Barcode above. Have the information that is printed in the box marked by the arrow XXXX XXXX XXXX XXXX (located on the following page) available and follow the instructions. P34767 Vote By Mail: You will not otherwise receivecan vote by mail by requesting a paper or email copy.copy of the materials, which will include a proxy card. E91290—
Voting Items THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL NOMINEES IN PROPOSAL 1 4AND “FOR” PROPOSALS 2, 0 7 4 + 01I6TC
Shareholder Meeting Notice Global Payments Inc.’s Annual Meeting of Shareholders will be held on September 19, 2012 at 10 Glenlake Parkway, North Tower, Atlanta, Georgia 30328, at 11:00 a.m. Atlanta Time. Proposals to be voted on at the meeting are listed below along with the Board of Directors’ recommendations. The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposals 2 through 5.3, AND 4. 1. The Nominees for Election of Class III Directors – 01—Alex W. Hart*, 02—William I Jacobs*, 03—Alan M. Silberstein* * Each to serve until the 2015 Annual Meeting of Shareholders, or until their respective successors are elected and qualified or until their respective earlier resignation, retirement, disqualification, removal from office or death.Twelve Nominees as Directors: 2. To approve,Approval, on an advisory basis, of the compensation of our named executive officers.1a. F. Thaddeus Arroyo officers for 2019. 3. To approveApproval of amendments to our articles of 1b. Robert H.B. Baldwin, Jr. incorporation to eliminate supermajority voting requirements. 1c. John G. Bruno 4. Ratification of the Second Amended and Restated Articles of Incorporation. 4. To ratify the reappointmentappointment of Deloitte & Touche LLP as the Company’sour independent 1d. Kriss Cloninger III public accountants. PLEASE NOTE – YOU CANNOT VOTE BY RETURNING THIS NOTICE. To vote your shares you must vote online or request a paper copy of the proxy materials to receive a proxy card. If you wish to attend and vote at the meeting, please bring this notice with you. Directions to the Global Payments Inc. Annual Meeting Directions to the 2012 annual meeting. Using GA 400 North, take exit 5B (Sandy Springs) and drive west on Abernathy Road about one block. Turn right on Glenlake Parkway. 10 Glenlake Parkway is the first drive on the left. (The North Tower is the building to your right upon entering the circular drive). Using GA 400 South, exit 5 Abernathy Road and follow instructions above. Here’s how to order a copy of the proxy materials and select a future delivery preference: Paper copies: Current and future paper delivery requests can be submitted via the telephone, Internet or email options below. Email copies: Current and future email delivery requests must be submitted via the Internet following the instructions below. If you request an email copy of current materials you will receive an email with a link to the materials. PLEASE NOTE: You must use the number in the shaded bar on the reverse side when requesting a set of proxy materials. 3 Internet – Go to www.envisionreports.com/GPN. Click Cast Your Vote or Request Materials. Follow the instructions to log in and order a paper or email copy of the current meeting materials and submit your preference for email or paper delivery of future meeting materials. 3 Telephone – Call us free of charge at 1-866-641-4276 using a touch-tone phone and follow the instructions to log in and order a paper copy of the materials by mailaccounting firm for the current meeting. You can also submit a preference to receive a paper copy for future meetings. 3 Email – Send email to investorvote@computershare.com with “Proxy Materials Global Payments Inc.” in the subject line. Include in the message your full name and address, plus the number located in the shaded bar on the reverse, and state in the email that you want a paper copy of current meeting materials. You can also state your preference to receive a paper copy for future meetings. To facilitate timely delivery, all requests for a paper copy of the proxy materials must be received by September 9, 2012. 01I6TCyear ending December 31, 2020. 1e. William I Jacobs 1f. Joia M. Johnson 1g. Ruth Ann Marshall 1h. Connie D. McDaniel 1i. William B. Plummer 1j. Jeffrey S. Sloan 1k. John T. Turner 1l. M. Troy Woods—P34767 E91291
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