UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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Securities Exchange Act of 1934
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| o | Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 |
BROADRIDGE FINANCIAL SOLUTIONS, INC.
(Name of Registrant as Specified In Its Charter)
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5 Dakota Drive
Lake Success, New York 11042
Dear Stockholders
You are cordially invited to attend the 2018 Annual Meeting of Stockholders of Broadridge Financial Solutions, Inc. Our 2018 Annual Meeting will be held on Thursday, November 8, 2018, at 9:00 a.m. Eastern Time.
This is our tenth completely virtual meeting of stockholders. You will be able to attend the 2018 Annual Meeting online, vote, and submit questions during the meeting by visiting broadridge.onlineshareholdermeeting.com.
At the meeting, our stockholders will elect our Board of Directors and several other important items of business will be conducted. I will report on our fiscal year 2018 financial performance at the meeting, and the members of the Board and I will also answer questions from our stockholders.
We announced earlier this month that Timothy C. Gokey will succeed me as Chief Executive Officer of Broadridge, and I will become Executive Chairman, effective January 2, 2019. This follows the Board’s long-planned succession process. Tim is one of the most committed and capable leaders in Fintech, and I am confident that Tim will build on our strong momentum and lead Broadridge to its next phase of growth. In addition, our current Chairman of the Board, Leslie A. Brun, was appointed to the role of Lead Independent Director in connection with the CEO succession plan, effective January 2, 2019. In this new role, Les will continue to provide independent leadership of the Board. We believe that this structure will result in a strong team from both an operational and a governance perspective.
Also, due to an age limitation for election to the Board of Directors in our Corporate Governance Principles, Richard J. Haviland, who has been a member of the Board and the Chair of our Audit Committee since we became a public company in 2007, will be rotating off the Board following the 2018 Annual Meeting. We wish Rich well and thank him for his many years of tireless service on the Board.
Whether or not you plan to attend the 2018 Annual Meeting, please read our 2018 Proxy Statement for important information on each of the proposals, and our practices in the areas of corporate governance and executive compensation. Our 2018 Annual Report to Stockholders contains information about Broadridge and our financial performance.
Please provide your voting instructions by the Internet, telephone, or by returning a proxy card or voting instruction form. Your vote is important to us and our business and we strongly urge you to cast your vote.
I am very much looking forward to our 2018 Annual Meeting of Stockholders.
Sincerely,
Richard J. Daly
Chief Executive Officer
Lake Success, New York
September 24, 2018
5 Dakota Drive
Lake Success, New York 11042
Notice of Annual Meeting of Stockholders
The 2018 Annual Meeting of Stockholders of Broadridge Financial Solutions, Inc., a Delaware corporation, will be held on Thursday, November 8, 2018, at 9:00 a.m. Eastern Time.
You can attend the 2018 Annual Meeting online, vote your shares, and submit questions during the meeting by visiting broadridge.onlineshareholdermeeting.com. Be sure to have the Control Number we have provided to you to join the meeting.
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At the meeting, stockholders will be asked to vote on the following: |
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Election of nine nominees to the Board of Directors to serve until the 2019 annual meeting of stockholders and until their successors are duly elected and qualified
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Advisory vote to approve the compensation of our Named Executive Officers
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Approve the 2018 Omnibus Award Plan
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Ratify the appointment of Deloitte & Touche LLP as our independent registered public accountants for the fiscal year ending June 30, 2019
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Transact such other business as may properly come before the meeting and any adjournment or postponement thereof
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Stockholders of record at the close of business on September 17, 2018, are entitled to vote at the 2018 Annual Meeting.
We began distributing a Notice of Internet Availability of Proxy Materials, the 2018 Proxy Statement, the 2018 Annual Report to Stockholders, and proxy card/voting instruction form, as applicable, to stockholders on September 24, 2018.
By Order of the Board of Directors,
Maria Allen
Secretary
Lake Success, New York
September 24, 2018
Table of Contents
ii Broadridge 2018 Proxy Statement
Proxy Statement for Annual Meeting of Stockholders
This Proxy Statement is furnished to the stockholders of Broadridge Financial Solutions, Inc. (the “Company” or “Broadridge”) in connection with the solicitation of proxies by the Board of Directors of the Company (the “Board of Directors” or the “Board”) for use at the 2018 Annual Meeting of Stockholders of the Company (the “2018 Annual Meeting” or the “Annual Meeting”), for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders.
Annual Meeting of Stockholders
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Time and Date
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9:00 a.m. Eastern Time, November 8, 2018
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Attend Meeting via Internet
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broadridge.onlineshareholdermeeting.com
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Record Date
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September 17, 2018
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Voting
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Stockholders as of the Record Date are entitled to vote. Each share of common stock is entitled to one vote for each director nominee and one vote for each of the other proposals. There is no cumulative voting.
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The Annual Meeting will be a completely virtual meeting. You will be able to attend online, vote, and submit questions during the Annual Meeting by visiting broadridge.onlineshareholdermeeting.com.
We hope you will exercise your rights and fully participate as a stockholder. It is very important that you vote to play a part in the future of our Company. You do not need to attend the Annual Meeting to vote your shares.
If you hold your shares through a broker, bank or nominee, your broker is not permitted to vote on your behalf on the election of directors and other matters to be considered at the Annual Meeting (except on the ratification of the appointment of our independent registered public accountants for 2019), unless you provide specific instructions by completing and returning the voting instruction form or following the instructions provided to you to vote your shares by telephone or the Internet. For your vote to be counted, you will need to communicate your voting decisions to your broker, bank or nominee before the date of the Annual Meeting.
The following table summarizes the proposals to be considered at the Annual Meeting and the Board’s voting recommendation with respect to each proposal.
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More
information |
Board’s
recommendation |
Broker
discretionary voting allowed? |
Abstentions
and Broker Non-Votes |
Votes
required for approval |
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PROPOSAL 1
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Election of Directors
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Page 7
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FOR each Nominee
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No
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PROPOSAL 2
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Advisory Vote to Approve the Compensation of our Named Executive Officers
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Page 30
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FOR
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No
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Do not count
for all four proposals (no effect) |
Majority of votes cast required
for proposals 1, 2, 3, and 4 |
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PROPOSAL 3
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Approval of the 2018 Omnibus Award Plan
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Page 68
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FOR
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No
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PROPOSAL 4
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Ratification of Appointment of Independent Registered Public Accountants for 2019
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Page 77
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FOR
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Yes
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Broadridge 2018 Proxy Statement 1
Vote Right Away
Advance Voting Methods and Deadlines
Even if you plan to attend our Annual Meeting, please read this Proxy Statement with care and vote right away using one of the following methods.
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BY INTERNET USING
YOUR COMPUTER |
BY TELEPHONE
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BY INTERNET USING
YOUR TABLET OR SMARTPHONE |
IF YOU RECEIVED
YOUR PROXY MATERIALS BY MAIL, BY MAILING YOUR PROXY CARD |
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Registered Owners
Visit 24/7 www.proxyvote.com |
Registered Owners in
the U.S. or Canada dial toll-free 24/7 1-800-690-6903 |
Scan this QR code 24/7
to vote with your mobile device (may require free software) |
Cast your ballot,
sign your proxy card and send by free post |
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You will need the Control Number included on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials. |
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The telephone and Internet voting facilities will close at 11:59 p.m. Eastern Time on November 7, 2018.
If your shares are held in a stock brokerage account or by a bank or other nominee, your ability to vote by telephone or over the Internet depends on your broker’s voting process. Please follow the directions provided to you by your broker, bank or nominee.
Voting During the Annual Meeting
You may also vote during the Annual Meeting by visiting broadridge.onlineshareholdermeeting.com and following the instructions. You will need the Control Number included on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials.
Questions and Answers About the Annual Meeting and Voting
Please see the section entitled “About the Annual Meeting and These Proxy Materials” beginning on page 80 for answers to common questions on the rules and procedures about the proxy and annual meeting process.
2 Broadridge 2018 Proxy Statement
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. Page references are supplied to help you find further information in this Proxy Statement.
Nominees for Director (page 8)
The following table provides summary information about each director nominee. Each director stands for election annually. Detailed information about each nominee’s background, skill set and areas of experience can be found beginning on page 8.
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Director Name
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Age
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Occupation
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Independent
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Director
Since |
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Leslie A. Brun
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66
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Chairman and CEO, SARR Group, LLC
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Yes
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(1)
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2007
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Pamela L. Carter
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69
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Retired President, Cummins Distribution Business, a division of Cummins Inc.
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Yes
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2017
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Richard J. Daly
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65
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CEO, Broadridge
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No
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(2)
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2007
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Robert N. Duelks
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63
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Retired Executive, Accenture plc
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Yes
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2009
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Brett A. Keller
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50
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CEO, priceline.com
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Yes
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2015
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Stuart R. Levine
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71
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Chairman and CEO, Stuart Levine and Associates LLC
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Yes
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2007
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Maura A. Markus
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60
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Former President and COO, Bank of the West
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Yes
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2013
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Thomas J. Perna
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67
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Chairman, Board of Trustees, Pioneer Mutual Fund Group
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Yes
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2009
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Alan J. Weber
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69
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CEO, Weber Group LLC
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Yes
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2007
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| (1) | Chairman of the Broadridge Board. If re-elected will serve as Lead Independent Director effective January 2, 2019. |
| (2) | Broadridge Management. If re-elected will serve as Executive Chairman effective January 2, 2019. |
Governance Highlights (page 17)
The Company believes good governance is integral to achieving long-term stockholder value. We are committed to governance policies and practices that serve the interests of the Company and its stockholders. The Board of Directors monitors developments in governance best practices to assure that it continues to meet its commitment to thoughtful and independent representation of stockholder interests. The following table summarizes certain corporate governance practices and facts:
Board
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Strong Independent Board Leadership
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Majority Independent Directors – 8 of the 9 director nominees are independent
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Annual Election of Directors by majority of votes cast
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Director Stock Ownership Guidelines and Holding Period Requirements – each director is expected to own common stock or deferred stock units (“DSUs”) with a value equivalent to a multiple of their annual retainer
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Annual Board and Committee Evaluation Process
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Stockholder Rights
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Proxy Access
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No Poison Pill
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Executive Compensation
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Annual Say on Pay Stockholder Vote
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Clawback Policy
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Prohibition on Hedging, Pledging and Short Sales of our Securities
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Double-trigger on Change in Control
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No Re-pricing or Discount Stock Options
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No Dividends or Dividend Equivalents on Unvested Equity Awards
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Stock Ownership Guidelines and Retention and Holding Period Requirements
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No Employment Agreements
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No Excise Tax Gross-ups
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Restrictive Covenant Agreements
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Modest Perquisites
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Broadridge 2018 Proxy Statement 3
Select Performance Highlights (page 33)
For more complete information about our financial performance, please review the Company’s 2018 Annual Report on Form 10-K (the “2018 Form 10-K”).
Business Highlights.
In fiscal year 2018, we achieved another year of strong financial performance, including record closed sales results. These strong financial results enabled the Company to generate total shareholder return of 55% for the one-year period ended June 30, 2018, which is performance in the top quartile of companies in the S&P 500.
Stockholder Value Creation.
| • | Returned $391 million to stockholders through dividends and share repurchases under our stock repurchase program (net of proceeds from exercises of stock options) |
| • | Increased the annual dividend amount declared by 11% during fiscal year 2018 |
| • | Increased our annual dividend amount for fiscal year 2019 by 33% – with this increase, our annual dividend has increased for the eleventh consecutive year since becoming a public company |
4 Broadridge 2018 Proxy Statement
Pay is Aligned to Company Performance (page 32)
Broadridge’s compensation programs are designed to align the interests of our executives with the interests of our stockholders. For this reason, the mix of compensation elements for the executive officers listed on the Summary Compensation Table on page 54 (the “Named Executive Officers” or “NEOs”), and particularly the chief executive officer (“Chief Executive Officer” or “CEO”), is heavily weighted towards variable, performance-based compensation.
In line with the Company’s strong overall financial performance in fiscal year 2018, the annual cash incentive payments for the Named Executive Officers ranged from 125% to 136% of their targets. In addition, because of our strong EPS performance in fiscal years 2017 and 2018, performance-based restricted stock unit (“RSU”) awards were earned at 130% of their target amounts.
The total direct compensation (“TDC”) of the Named Executive Officers increased in fiscal year 2018 due to the short-term cash incentive payouts reflecting the Company’s performance in this fiscal year. In addition, in some cases, based on executive performance in the prior fiscal year, TDC targets were increased for fiscal year 2018.
Target Compensation for Named Executive Officers (page 37)
A summary of the fiscal year 2018 target TDC of the Named Executive Officers as approved by the Compensation Committee is set forth in the table below. The compensation presented in this table differs from the compensation presented in the Summary Compensation Table, which can be found on page 54 of this Proxy Statement, and is not a substitute for such information.
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Base Salary
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Annual Cash Incentive
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Annual Equity Incentive
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Name
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Annual
Value |
Fixed Cash as
% of Target TDC |
Cash
Incentive Target as % of Base |
Target
Value |
Cash
Incentive as % of Target TDC |
Target
Value |
Equity as
% of Target TDC |
Target TDC
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Mr. Daly
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$
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928,288
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11%
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165%
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$
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1,531,675
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18%
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$
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6,000,000
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71%
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$
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8,459,963
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Mr. Young
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$
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562,754
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21%
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90%
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$
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506,479
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19%
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$
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1,650,000
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61%
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$
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2,719,233
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Mr. Gokey
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$
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636,540
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19%
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130%
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$
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827,502
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24%
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$
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1,950,000
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57%
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$
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3,414,042
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Mr. Perry
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$
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601,000
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28%
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140%
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$
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841,400
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39%
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$
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700,000
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33%
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$
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2,142,400
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Mr. Schifellite
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$
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583,495
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26%
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115%
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$
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671,019
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30%
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$
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1,000,000
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44%
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$
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2,254,514
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Executive Total Compensation Mix (page 37)
A significant portion of the CEO’s and other Named Executive Officers’ target TDC is variable, performance-based compensation. This is intended to ensure that the executives who are most responsible for overall performance and changes in stockholder value are held most accountable for results.
Broadridge 2018 Proxy Statement 5
Response to Say on Pay Advisory Vote (page 37)
Each year, the Company provides stockholders with an opportunity to cast an advisory vote on the compensation of the Company’s Named Executive Officers (the “Say on Pay Vote”). At the 2017 annual meeting of stockholders, stockholders continued their strong support of our executive compensation program with approximately 97% of the votes cast in favor of the proposal. Based on the outcome of the annual Say on Pay Vote, the Compensation Committee believes that the Company’s current executive compensation program is aligned with the interests of the Company’s stockholders. Accordingly, the Compensation Committee decided to retain the core elements and pay-for-performance design of our executive compensation program for fiscal year 2018.
In addition, at the 2017 annual meeting of stockholders, the Company held a non-binding vote on the frequency of the Say on Pay Vote to approve the compensation of its Named Executive Officers as disclosed in the Proxy Statement (the “Frequency Vote”). Currently, the Say on Pay Vote is included every year. At the 2017 annual meeting of stockholders, approximately 84% of the votes cast by stockholders were in favor of continuing to hold the Say on Pay Vote every year.
The Compensation Committee will continue to consider the outcome of the Company’s Say on Pay Votes and the views of our stockholders when making future compensation decisions for the Named Executive Officers.
Approval of the 2018 Omnibus Award Plan (page 68)
We are requesting that stockholders vote in favor of the Broadridge Financial Solutions, Inc. 2018 Omnibus Award Plan (the “2018 Omnibus Award Plan”), which is maintained for the benefit of eligible employees, directors and consultants of the Company and its affiliates.
The 2018 Omnibus Award Plan was unanimously adopted by the Board of Directors on August 2, 2018, subject to approval by our stockholders. The Board of Directors believes that approval of the 2018 Omnibus Award Plan is in the best interests of the Company and the stockholders. Awards that may be granted under the 2018 Omnibus Award Plan (and are currently granted under our Amended and Restated 2007 Omnibus Award Plan (the “2007 Omnibus Award Plan”)) are an important component of our overall compensation program, which allows us to link the compensation of our employees, directors and consultants to Company performance, align their interests with stockholder interests and enables our employees, directors and consultants to build long-term stockholder value.
As described in more detail in this Proxy Statement, the 2018 Omnibus Award Plan is intended to replace the 2007 Omnibus Award Plan, which is our only equity plan. It will provide that an additional 7,190,000 shares of our common stock, together with the number of shares that remain available under the 2007 Omnibus Award Plan at the effective time, may be issued as equity-based compensation awards to our employees, directors and consultants. If our stockholders do not approve the 2018 Omnibus Award Plan, the 2007 Omnibus Award Plan will remain in effect with its current terms and conditions. As of June 30, 2018, there were 2,755,510 shares available for grant under the 2007 Omnibus Award Plan, all of which could be granted as any form of award authorized under the 2007 Omnibus Award Plan. Upon effectiveness of the 2018 Omnibus Award Plan, no further grants of awards will be made under the 2007 Omnibus Award Plan.
Ratification of Auditors (page 77)
We ask our stockholders to ratify the appointment of Deloitte & Touche LLP as our independent registered public accountants for the year ending June 30, 2019. Below is summary information about Deloitte & Touche LLP’s fees for 2018 and 2017.
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Type of Fees ($ in thousands)
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2018
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2017
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Audit Fees
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$
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4,771
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$
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4,474
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Audit-Related Fees
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4,187
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3,286
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Tax Fees
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671
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251
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All Other Fees
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—
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—
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Total Fees
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$
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9,629
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$
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8,011
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6 Broadridge 2018 Proxy Statement
Proposal 1 — Election of Directors
At the 2018 Annual Meeting, nine directors are to be elected, each of whom will serve until the 2019 annual meeting of stockholders and until their respective successors are duly elected and qualified. The Board has nominated the following individuals to serve as members of the Board of Directors: Leslie A. Brun, Pamela L. Carter, Richard J. Daly, Robert N. Duelks, Brett A. Keller, Stuart R. Levine, Maura A. Markus, Thomas J. Perna, and Alan J. Weber.
Each of the nominees currently serves on the Board and was elected by the stockholders at the 2017 annual meeting of stockholders. Each nominee has consented to be nominated and to serve, if elected.
Under the Company’s Corporate Governance Principles, a majority of the Board must be comprised of directors who are independent based on the rules of the New York Stock Exchange (the “NYSE”). The NYSE rules provide that the Board is required to affirmatively determine which directors are independent and to disclose such determination for each annual meeting of stockholders. No director will be deemed to be independent unless the Board affirmatively determines that the director has no material relationship with the Company, either directly or as an officer, stockholder or partner of an organization that has a relationship with the Company. In its review of director independence, the Board of Directors considers all relevant facts and circumstances, including without limitation, all commercial, banking, consulting, legal, accounting, charitable or other business relationships any director may have with the Company in conjunction with the Corporate Governance Principles and Section 303A of the NYSE’s Listed Company Manual (the “NYSE Listing Standards”).
On August 2, 2018, the Board reviewed each director’s relationship with us and affirmatively determined that all of the directors, other than Mr. Daly, are independent under the NYSE Listing Standards. Mr. Daly was determined to not be independent because he is our Chief Executive Officer. The Governance and Nominating Committee seeks directors with established strong professional reputations and experience in areas relevant to the strategy and operations of the Company’s businesses, particularly industries that Broadridge serves.
Broadridge is a global financial technology leader and a member of the S&P 500, providing investor communications and technology-driven solutions to banks, broker-dealers, asset managers and corporate issuers. Our services include investor and customer communications, securities processing, and data and analytics solutions. In short, we provide important infrastructure that powers the financial services industry. With over 50 years of experience, including over 10 years as an independent public company, we provide financial services firms with advanced, dependable, scalable and cost-effective integrated solutions. Our solutions help reduce the need for clients to make significant capital investments in operations infrastructure, thereby allowing them to increase their focus on core business activities.
We serve a large and diverse client base across four client groups: capital markets, asset management, wealth management and corporations. Our clients in the financial services industry include retail and institutional brokerage firms, global banks, mutual funds, asset managers, insurance companies, annuity companies, institutional investors, specialty trading firms, clearing firms, third party administrators, hedge funds, and financial advisors. Our corporate clients are typically publicly held companies. In addition to financial services firms, our customer communications business services other corporate clients in the healthcare, insurance, consumer finance, telecommunications, utilities, retail and other service industries with their essential communications.
Our directors’ skills, expertise, background and experiences encompass the areas of banking and financial services, information processing services, technology services, and providers of services to the financial services industry, all of which are areas important to our Company’s businesses and strategy.
The biographies of the director nominees are set forth below. They contain information regarding the individual’s service as a director of the Company, business experience, director positions held currently or any time in the past five years, and the experiences, qualifications, attributes or skills that caused the Board to determine that such individual should serve as a director of the Company.
Each of the nominees for election as a director at the 2018 Annual Meeting holds or has held senior executive positions in large, complex organizations, and most hold or have held the role of chief executive officer. This experience demonstrates their ability to perform at the highest levels. In these positions, they have gained experience in core business skills, such as strategic and financial planning, public company financial reporting, compliance, risk management, leadership development, and marketing. This experience enables them to provide sound judgment concerning the issues facing a large corporation in today’s environment, provide oversight of these areas at the Company and evaluate our performance.
Broadridge 2018 Proxy Statement 7
Proposal 1 — Election of Directors
The Governance and Nominating Committee also believes that each of the nominees has other key attributes that are important to an effective board: wisdom, integrity, an understanding and general acceptance of the Company’s corporate philosophy, valid business or professional knowledge and experience, a proven record of accomplishment with excellent organizations, an inquiring mind, a willingness to speak one’s mind, an ability to challenge and stimulate management, and a willingness to commit time and energy. The Governance and Nominating Committee takes diversity into account in determining the Company’s slate of nominees and believes that, as a group, the directors bring a diverse range of perspectives to the Board’s deliberations.
In addition to the above, the Governance and Nominating Committee also considered the specific experience described in the biographical details that follow in determining to nominate the individuals set forth below for election as directors. For more information on the process undertaken by the Governance and Nominating Committee in recommending qualified director candidates to the Board, see the “Corporate Governance–Nomination Process” section of this Proxy Statement.
Information About the Nominees
Leslie A. Brun
Age 66, has served as Chairman of the Board since 2011 and has been a member of our Board of Directors since 2007. The Board has appointed Mr. Brun to serve as Lead Independent Director of the Board, and if re-elected, will serve in such role effective January 2, 2019.
Independent Chairman
Mr. Brun has been the Chairman and Chief Executive Officer of SARR Group, LLC, an investment holding company, since 2006. He is currently Vice Chairman and Senior Advisor of G100 Companies, a unique business partnership that combines the world’s best C-level learning communities with premier professional services firms. He has served as the Non-Executive Chairman of CDK Global, Inc., a global provider of integrated technology solutions to the information technology and marketing/advertising markets of the automotive retail industry, since 2014. Mr. Brun has served as a director of Merck & Co., Inc., a health care company, since 2008, where he has served as the Lead Independent Director since 2014. He served on the Board of Directors of Hewlett Packard Enterprise Company from 2015 through 2018. In 2018, he was elected to the Board of Directors of Corning, Inc. From 2011 to 2013, he was Managing Director and head of Investor Relations at CCMP Capital, a global private equity firm. Previously, from 1991 to 2005, Mr. Brun served as founder, Chairman and Chief Executive Officer of Hamilton Lane Advisors, a private markets investment firm. From 1988 to 1990, he served as co-founder and Managing Director of the investment banking group of Fidelity Bank. Mr. Brun served as a director of Automatic Data Processing, Inc. (“ADP”), a provider of business outsourcing solutions and our former parent company, from 2003 to 2015, including serving as ADP’s Chairman of the Board from 2007 to 2015. Mr. Brun is a former trustee of Widener University, the University at Buffalo Foundation, Inc. and The Episcopal Academy in Merion, Pennsylvania.
Specific experience, qualifications, attributes or skills:
| • | Extensive finance, management, investment banking, commercial banking, and financial advisory experience |
| • | Operating and management experience, including as chief executive officer of an investment holding company |
| • | Public company directorship and committee experience |
8 Broadridge 2018 Proxy Statement
Proposal 1 — Election of Directors
Pamela L. Carter
Age 69, is a member of the Audit Committee. Ms. Carter has been a member of our Board of Directors since 2017.
Independent Nominee
Ms. Carter is the retired President of Cummins Distribution Business, a division of Cummins Inc., a global manufacturer of diesel engines and related technologies. She assumed that role in 2008 and served in that position until she retired in 2015. She previously served as President – Cummins Filtration, then as Vice President and General Manager of Europe, Middle East and Africa business and operations for Cummins Inc. since 1999. Ms. Carter served as Vice President and General Counsel of Cummins Inc. from 1997 to 1999. Prior to joining Cummins Inc., she served as the Attorney General for the State of Indiana from 1993 to 1997. In 2010, Ms. Carter was appointed to the Export-Import Bank of the United States’ (the “U.S.”) sub-Saharan Africa Advisory Council. Ms. Carter currently serves on the Board of Directors of Enbridge Inc. following the merger of Spectra Energy Corp. and Enbridge in 2017. She has served on Spectra’s Board since 2007. In addition, she is also on the Board of Directors of CSX Corp. where she has served since 2010, and she has been a member of the Board of Directors of Hewlett Packard Enterprise Company since 2015.
Specific experience, qualifications, attributes or skills:
| • | Extensive global management and operational experience |
| • | Government leadership provides regulatory perspective |
| • | Public company directorship and committee experience |
Richard J. Daly
Age 65, is our Chief Executive Officer and has been a member of our Board of Directors since 2007. The Board has appointed Mr. Daly to serve as Executive Chairman, and if re-elected, will serve in such role effective January 2, 2019. Mr. Daly will be succeeded as Chief Executive Officer by Timothy C. Gokey effective January 2, 2019.
Management
Mr. Daly has served as our Chief Executive Officer since we became an independent company in 2007. He also served as President of Broadridge from 2014 to 2017, when Timothy C. Gokey assumed the role. Prior to the 2007 spin-off of Broadridge from ADP, Mr. Daly served as Group President of the Brokerage Services Group of ADP, as a member of the Executive Committee and a Corporate Officer of ADP since June 1996. In his role as President, he shared the responsibility of running the Brokerage Services Group and was directly responsible for our Investor Communication Solutions business. Mr. Daly joined ADP in 1989, as Senior Vice President of the Brokerage Services Group, following the acquisition by ADP of the proxy services business he founded. Mr. Daly served as a member of the Board of Directors of The ADT Corporation from January 2014 until May 2016, when it became a privately-held company. He is a member of the Advisory Board of the National Association of Corporate Directors (the “NACD”), and the Board of Directors of the SIFMA Foundation.
Specific experience, qualifications, attributes or skills:
| • | Chief Executive Officer’s unique perspective and insights into the Company, including its businesses, relationships, competitive and financial positioning, senior leadership and strategic opportunities and challenges |
| • | Operating, business and management experience at a major global company as president of the Company’s predecessor business |
| • | Founder of the Investor Communication Solutions business, the Company’s largest business |
| • | Public company directorship and committee experience |
| • | Core business skills |
Broadridge 2018 Proxy Statement 9
Proposal 1 — Election of Directors
Robert N. Duelks
Age 63, is a member of the Audit Committee and the Compensation Committee. Mr. Duelks has been a member of our Board of Directors since 2009.
Independent Director
Mr. Duelks is a former executive of Accenture plc; having served for 27 years in various capacities until his retirement in 2006. Throughout his tenure at Accenture, Mr. Duelks held multiple roles and had responsibilities including and ranging from local client service, regional operations management to management of global offerings. While at Accenture, he served on multiple leadership committees including the Board of Partners, the Management Committee and the Executive and Operating Committee for the Global Financial Services Operating Group. Mr. Duelks has served as an advisor to the senior executives of Tree Zero, a manufacturer of 100% tree free paper products since 2010. He is the former Chairman and a current member of the Board of Trustees of Gettysburg College, and previously served as a member of the Advisory Board for the Business School at Rutgers University.
Specific experience, qualifications, attributes or skills:
| • | Extensive experience in the management and operation of a technology and consulting services business |
| • | Core business skills |
Brett A. Keller
Age 50, is a member of the Audit Committee. He was appointed as a member of our Board of Directors in 2015.
Independent Director
Mr. Keller is the Chief Executive Officer of priceline.com, a leading provider of online travel services, and a subsidiary of Booking Holdings, Inc., a position he has held since 2016. Prior to his appointment as Chief Executive Officer, he served as priceline.com’s Chief Operating Officer, in 2016, and as its Chief Marketing Officer from 2002 to 2015. Mr. Keller joined priceline.com in 1999 and has played a central role in the Company’s evolution. As Chief Operating Officer, he was responsible for all marketing, technology, and product development areas of the business. As Chief Marketing Officer, he oversaw all global and strategic branding, marketing, distribution, product development and customer led data initiatives for the Company. Prior to joining priceline.com, Mr. Keller served as a director of online travel services for Cendant, a consumer services holding company. Mr. Keller sits on the National Advisory Council for the Marriott School of Management at Brigham Young University.
Specific experience, qualifications, attributes or skills:
| • | Operating and management experience as a chief executive officer and chief operating officer |
| • | Extensive experience in global consumer marketing, including branding, communications, online merchandising, and scaled consumer acquisition |
| • | Digital industry knowledge, including significant management of search engine marketing (SEM), social media, affiliate, user interface and user experience design development, big data, and programmatic disciplines |
| • | Broad operational and management experience |
10 Broadridge 2018 Proxy Statement
Proposal 1 — Election of Directors
Stuart R. Levine
Age 71, is the Chair and a member of the Governance and Nominating Committee and a member of the Audit Committee. He has been a member of our Board of Directors since 2007.
Independent Director
Mr. Levine is the founder, and has served as the Chairman and Chief Executive Officer of Stuart Levine and Associates LLC, an international management consulting and leadership development company, since 1996. He is the founder, Chairman and Chief Executive Officer of EduLeader LLC, an interactive digital learning company. He previously served as the Lead Director of Gentiva Health Services, Inc., a provider of home healthcare services, where he served from 2000 to 2009, and as Lead Director of J. D’Addario & Company, Inc., a private manufacturer of musical instrument accessories, where he served from 2005 to 2016, and as Vice Chairman of the board of Northwell Health from 1999 to 2002. In addition, Mr. Levine is the bestselling author of “The Leader in You” (Simon & Schuster 2004), “The Six Fundamentals of Success” (Doubleday 2004) and “Cut to the Chase” (Doubleday 2007). In 2011, Mr. Levine was recognized as one of the top 100 directors in the U.S. by the NACD and was designated as one of 17 Governance Fellows by the NACD as a Board Leadership Fellow. He also served as a director of European American Bank from 1995 to 2001 and The Olsten Corporation, a provider of staffing solutions, from 1994 to 2000. From 1992 to 1996, he was Chief Executive Officer of Dale Carnegie & Associates, Inc., a provider of leadership, communication and sales skills training. Mr. Levine is a former Chairman of Dowling College, as well as a former Member of the New York State Assembly.
Specific experience, qualifications, attributes or skills:
| • | Operating and management experience, including as chief executive officer of a global client services business |
| • | Public company directorship and committee experience |
| • | Frequent panel chair and participant in director education programs sponsored by the NACD |
Maura A. Markus
Age 60, is a member of the Audit Committee and the Compensation Committee. She has been a member of our Board of Directors since 2013.
Independent Director
Ms. Markus is the former President and Chief Operating Officer of Bank of the West, a role she held from 2010 through 2014. She is also a former member of the Board of Directors of Bank of the West and BancWest Corporation, and the Bank’s Executive Management Committee. Before joining Bank of the West, Ms. Markus was a 22-year veteran of Citigroup, having most recently served as Head of International Retail Banking in Citi’s Global Consumer Group. She held a number of additional domestic and international management positions including President, Citibank North America from 2000 to 2007. In this position, she also served as Chairman of Citibank West. Ms. Markus also served as Citi’s European Sales and Marketing Director in Brussels, Belgium, and as President of Citi’s consumer business in Greece. Ms. Markus has served on the Board of Directors of Stifel Financial Corp., a public financial services company, since 2016. Ms. Markus is a former member of The Financial Services Roundtable. Among her numerous community interests, she is a board member of Catholic Charities CYO of San Francisco, and is a member of Year Up Bay Area’s Talent and Opportunity Board. In addition, Ms. Markus serves as a trustee for the College of Mount Saint Vincent in New York.
Specific experience, qualifications, attributes or skills:
| • | Operating and management experience, including as chief operating officer of a large financial services company |
| • | Extensive experience in the financial services industry, including as a senior executive of a major global financial institution |
| • | Public company directorship and committee experience |
Broadridge 2018 Proxy Statement 11
Proposal 1 — Election of Directors
Thomas J. Perna
Age 67, is a member of the Audit Committee and the Governance and Nominating Committee. He has been a member of our Board of Directors since 2009.
Independent Director
Mr. Perna is the Chairman of the Board of Trustees of the Pioneer Mutual Fund Group. Prior to his appointment as Chairman, he served as a member of the Board of Trustees of the Pioneer Funds from 2006, overseeing approximately 57 open-end and closed-end investment companies in a mutual fund complex. He is the former Chairman and Chief Executive Officer of Quadriserv, Inc., a company that provides technology products for the securities lending industry. Mr. Perna served as Chief Executive Officer of Quadriserv, Inc. from 2008 to 2014. Prior to joining Quadriserv, Inc. in 2005, Mr. Perna served as Senior Executive Vice President of The Bank of New York, now known as The Bank of New York Mellon, in its Financial Institutions Banking, Asset Servicing and Broker Dealer Services sectors. In this role, he was responsible for over 6,000 employees globally. Mr. Perna joined The Bank of New York in 1986. He also served as a Commissioner on the New Jersey Civil Service Commission from March 2011 until December 2015. Mr. Perna previously served on the Board of Directors of the Depository Trust & Clearing Corporation (DTCC), Euroclear Bank S.A., Euroclear Clearance System PLC and Omgeo PLC. He is a member of a number of banking and securities industry associations.
Specific experience, qualifications, attributes or skills:
| • | Operating and management experience, including as chief executive officer of a provider of technology products to the securities industry |
| • | Experience in management of a global financial services firm |
| • | Core business skills |
Alan J. Weber
Age 69, is the Chair and a member of the Compensation Committee and a member of the Audit Committee. He has been a member of our Board of Directors since 2007.
Independent Director
Mr. Weber has served as the Chief Executive Officer of Weber Group LLC, a private investment firm, since 2008. Mr. Weber retired as Chairman and Chief Executive Officer of U.S. Trust Corporation and as a member of the executive committee of the Charles Schwab Corporation in 2005. Previously, he was the Vice Chairman and Chief Financial Officer of Aetna Inc., where he was responsible for corporate strategy, capital management, information technology, investor relations and financial operations. He also held a number of senior level positions at Citibank N.A., where he worked from 1971 to 1998, including as Chairman of Citibank International and Executive Vice President of Citibank. During his tenure at Citibank, Mr. Weber oversaw operations in approximately 30 countries, including assignments in Japan, Italy and Latin America. Mr. Weber has served as a director of Diebold Nixdorf Inc., a provider of self-service delivery and security systems and services, since 2005. He is also on the board of Street Diligence LLC, a private company. In addition, Mr. Weber serves as a member of the board of DCTV, a New York based charitable organization.
Specific experience, qualifications, attributes or skills:
| • | Operating and management experience, including as chief executive officer and chief financial officer of global financial services firms |
| • | Expertise in finance, financial reporting, compliance and controls |
| • | Experience in financial services and information technology businesses |
| • | Public company directorship and committee experience |
12 Broadridge 2018 Proxy Statement
Proposal 1 — Election of Directors
Required Vote
Each director nominee receiving a majority of the votes cast at the 2018 Annual Meeting, in person or by proxy, and entitled to vote in the election of directors, will be elected, provided that a quorum is present. Abstentions and broker non-votes will be included in determining whether there is a quorum. In determining whether such nominees have received the requisite number of affirmative votes, abstentions will have no effect on the outcome of the vote. Pursuant to NYSE regulations, brokers do not have discretionary voting power with respect to this proposal, and broker non-votes will have no effect on the outcome of the vote.
Recommendation of the Board of Directors
The Board of Directors Recommends that you Vote “FOR” the Election of All Nominees
Broadridge 2018 Proxy Statement 13
The compensation of our non-management directors is determined by the Compensation Committee upon review of recommendations from the Committee’s independent compensation consultant, Frederic W. Cook & Co., Inc. (“FW Cook”). The table below sets forth cash and equity compensation paid to our non-management directors (including our independent Chairman) in the fiscal year ended June 30, 2018. All of our directors are non-management directors, other than Mr. Daly, who is our CEO. Mr. Daly’s compensation as CEO is reflected in the Summary Compensation Table on page 54 of the “Executive Compensation” section of this Proxy Statement. Mr. Daly does not receive any separate cash or equity compensation for his participation on the Broadridge Board of Directors.
The table on page 16 on fiscal year 2018 non-management director compensation includes the following compensation elements:
|
Compensation Element
|
Director Compensation Program
|
|
|
Annual Cash Retainer
|
•
|
$75,000, which may be deferred at the director’s option
|
|
Annual Equity Retainer
|
•
|
$145,000 target value split equally between stock options and DSUs that are fully vested upon grant
|
|
Board and Committee Meeting Fees for all directors other than the Chairman
|
•
|
$1,500 for each Board meeting and committee meeting attended in person
|
|
•
|
$750 for telephonic meetings
|
|
|
Annual Committee Chair Cash Retainer
|
•
|
$15,000
|
|
Chairman Additional Annual Retainer
|
•
|
$62,500 in cash
|
|
•
|
$57,500 equity award target value split equally between stock options and DSUs that are fully vested upon grant
|
|
|
Matching Gift Program
|
•
|
For each director, the Company matches charitable contributions up to $10,000 per calendar year
|
|
Stock Ownership Guidelines and Holding Period Requirements
|
•
|
Ownership of common stock or DSUs with a value equivalent to a multiple of the annual cash retainer
|
|
•
|
Holding of 100% of shares received upon exercise of stock options, net of exercise price, tax liability, and transaction costs, until separation from service on the Board
|
|
Cash Compensation. In fiscal year 2018, all non-management directors received an annual retainer and meeting fees for each Board meeting and each committee meeting attended as a committee member. The meeting fees are paid irrespective of whether meetings are held on the same date; and attendance at Board or committee meetings by telephone results in payment of half of the standard meeting fee. The Chairs of the Audit, Compensation, and Governance and Nominating Committees each received an additional annual retainer. Our independent Chairman, Mr. Brun, received an additional cash retainer, but is not entitled to receive meeting fees for participation in Board or committee meetings.
All retainers and meeting fees are paid in cash on a quarterly basis. Pursuant to the Broadridge Director Deferred Compensation Plan, directors may elect to defer their retainers and meeting fees into a notional account in the form of phantom shares of Broadridge common stock. The number of phantom shares awarded is determined by dividing the quarterly cash payment by the closing price of Broadridge stock on the last day of the quarter. This election is made annually prior to the beginning of the calendar year in which the retainers and fees are earned and is irrevocable for the entire calendar year. Accounts reflect changes in value over time based on the change in Broadridge’s stock price and are also credited with dividend equivalents in cash plus interest on a quarterly basis as dividends are declared by the Broadridge Board. Participants receive distributions of the value of their notional accounts in cash following their departure from the Board of Directors in either a lump sum or installments for up to five years, as previously elected by the director.
Equity Compensation. Non-management directors received annual grants of stock options and DSUs under the 2007 Omnibus Award Plan during fiscal year 2018. Our non-management directors each received equity awards and our independent Chairman, Mr. Brun, received an additional equity award. The equity target value is split equally between grants of stock options and DSUs. The number of shares comprising each director’s equity awards is determined at the time of grant based on a 30-day average stock price and, for stock options, the binomial stock option valuation method.
14 Broadridge 2018 Proxy Statement
Director Compensation
All stock options are granted with an exercise price equal to the closing price of Broadridge common stock on the date of grant. All stock options granted to our non-management directors are fully vested upon grant, and have a term of 10 years. Following separation from service on the Board, stock options held by directors expire at the earlier of the expiration of the option term and three years. All DSUs are granted at the same time as stock options, are fully vested upon grant, and will settle as shares of common stock upon the director’s separation from service on the Board. DSUs are credited with dividend equivalents in the form of additional DSUs on a quarterly basis as dividends are declared by the Broadridge Board.
Currently, the stock ownership guidelines for the Company’s non-management directors provide that each non-management director is expected to accumulate an amount of the Company’s common stock equal in value to at least five times their annual cash retainer. Stock option awards granted to the directors are not counted as shares of common stock for purposes of this calculation. All of our non-management directors have met the stock ownership multiple, other than Mr. Keller and Ms. Carter, who joined the Board in 2015 and 2017, respectively, and are making progress toward meeting the multiple.
In addition, the directors currently are required to hold 100% of their shares received upon exercise of stock options, net of their exercise price, tax liability, and transaction costs, until their separation from service on the Board. DSUs do not settle as shares of common stock until a director’s separation from service on the Board. Because of the holding requirement, there is no minimum time period in which the directors are required to achieve the stock ownership multiple.
In February 2018, the Board adopted new stock ownership guidelines for the Company’s non-management directors that will be effective beginning in November 2018. Under the new guidelines, non-management directors will be required to own Company stock equal to 10 times their annual cash retainer. Stock option awards and phantom stock will not count as shares of common stock for purposes of this calculation.
The new guidelines provide that non-management directors will no longer be required to hold 100% of their shares until their separation from service on the Board. Specifically the guidelines provide that:
| • | A non-management director should retain at least 50% of the net profit shares realized after the exercise of stock options until the ownership level is reached. Net profit shares are the shares remaining after the sale of shares to finance payment of the stock option exercise price, taxes and transaction costs owed at exercise. |
| • | After the ownership level is met, the non-management director must continue to hold at least 50% of future net profit shares for one year. |
Similar to the prior guidelines, because of the holding requirement, there is no minimum time period in which the directors are required to achieve the stock ownership multiple.
Other. Non-management directors may participate in the Broadridge Director & Officer Matching Gift Program (the “Matching Gift Program”). Under this program, a charitable foundation established and funded by the Company (the “Broadridge Foundation”) contributes an equal amount to any qualified tax-exempt organization that a director supports up to a maximum Company contribution of $10,000 per calendar year.
The non-management directors are also reimbursed for their reasonable expenses in connection with attending Board and committee meetings and other Company events.
Broadridge 2018 Proxy Statement 15
Director Compensation
Fiscal Year 2018 Non-Management Director Compensation
|
Name
|
Fees Earned or
Paid in Cash ($)(1) |
Stock Awards ($)(2)
|
Option Awards ($)(3)
|
All Other
Compensation ($)(4) |
Total ($)
|
||||||||||
|
Leslie A. Brun
|
$
|
137,500
|
|
$
|
135,269
|
|
$
|
103,804
|
|
|
—
|
|
$
|
376,573
|
|
|
Pamela L. Carter
|
$
|
65,250
|
|
$
|
77,002
|
|
$
|
74,337
|
|
$
|
10,000
|
|
$
|
226,589
|
|
|
Robert N. Duelks
|
$
|
96,750
|
|
$
|
96,051
|
|
$
|
74,337
|
|
$
|
10,000
|
|
$
|
277,138
|
|
|
Richard J. Haviland
|
$
|
109,500
|
|
$
|
96,051
|
|
$
|
74,337
|
|
$
|
10,000
|
|
$
|
289,888
|
|
|
Brett A. Keller
|
$
|
90,000
|
|
$
|
80,963
|
|
$
|
74,337
|
|
$
|
10,000
|
|
$
|
255,300
|
|
|
Stuart R. Levine
|
$
|
109,500
|
|
$
|
96,051
|
|
$
|
74,337
|
|
$
|
11,750
|
|
$
|
291,638
|
|
|
Maura A. Markus
|
$
|
96,750
|
|
$
|
87,800
|
|
$
|
74,337
|
|
$
|
10,000
|
|
$
|
268,887
|
|
|
Thomas J. Perna
|
$
|
94,500
|
|
$
|
96,051
|
|
$
|
74,337
|
|
|
—
|
|
$
|
264,888
|
|
|
Alan J. Weber
|
$
|
111,750
|
|
$
|
96,051
|
|
$
|
74,337
|
|
$
|
10,000
|
|
$
|
292,138
|
|
| (1) | Represents the amount of cash compensation payable for fiscal year 2018 Board and committee service. Ms. Markus deferred all of her fiscal year 2018 cash compensation under the Broadridge Director Deferred Compensation Plan, and was credited with 995 phantom shares of Broadridge common stock in a notional account. |
| (2) | Represents the aggregate grant date fair value of DSU awards granted during fiscal year 2018 (annual grants and quarterly dividend equivalent grants), computed in accordance with Financial Accounting Standards Board’s Accounting Standards Codification 718, Compensation – Stock Compensation (“FASB ASC Topic 718”). See Note 13, “Stock-Based Compensation,” to the Company’s Consolidated Financial Statements for the fiscal year ended June 30, 2018 included in the 2018 Form 10-K, for the relevant assumptions used to determine the valuation of these awards. The total number of DSUs that were outstanding for each non-management director as of June 30, 2018 is as follows: 20,809 (Mr. Brun); 868 (Ms. Carter); 14,382 (Mr. Duelks); 14,382 (Mr. Haviland); 3,741 (Mr. Keller); 14,382 (Mr. Levine); 8,552 (Ms. Markus); 14,382 (Mr. Perna); and 14,382 (Mr. Weber). |
| (3) | Represents the aggregate grant date fair value of option awards granted during fiscal year 2018 computed in accordance with FASB ASC Topic 718. See Note 13 “Stock-Based Compensation,” to the Company’s Consolidated Financial Statements for the fiscal year ended June 30, 2018 included in the 2018 Form 10-K, for the relevant assumptions used to determine the valuation of these awards. The total number of stock options outstanding for each non-management director as of June 30, 2018, all of which are exercisable, is as follows: 116,723 (Mr. Brun); 4,107 (Ms. Carter); 76,966 (Mr. Duelks); 61,866 (Mr. Haviland); 17,718 (Mr. Keller); 88,166 (Mr. Levine); 42,043 (Ms. Markus); 76,966 (Mr. Perna); and 88,166 (Mr. Weber). |
| (4) | Represents Company-paid contributions made to qualified tax-exempt organizations under the Matching Gift Program on behalf of the non-management directors. The Company matches contributions made by its non-management directors to qualified tax-exempt organizations, up to a maximum Company contribution of $10,000 per calendar year. Amounts shown reflect total Company matching contributions in each fiscal year, and therefore may be greater than the calendar year maximum. |
16 Broadridge 2018 Proxy Statement
Our Corporate Governance Principles provide that directors are expected to attend regular Board meetings in person and to spend the time needed and meet as frequently as necessary to properly discharge their responsibilities. Each of our incumbent directors attended 100% of the meetings of the Board of Directors and of the committees on which they served during fiscal year 2018.
The Board of Directors has three standing committees, each of which is comprised solely of independent directors and is led by an independent Chair: Audit Committee, Compensation Committee, and Governance and Nominating Committee. The independent directors meet in executive sessions during each regular Board meeting and committee meeting. In addition, at least once a year, our independent directors meet to review the Compensation Committee’s annual review of the Chief Executive Officer.
|
|
Leslie A.
Brun |
Pamela L.
Carter |
Richard J.
Daly |
Robert N.
Duelks |
Richard J.
Haviland |
Brett A.
Keller |
Stuart R.
Levine |
Maura A.
Markus |
Thomas J.
Perna |
Alan J.
Weber |
2018
Meetings Held |
|
Board
|
C
|
•
|
•
|
•
|
•
|
•
|
•
|
•
|
•
|
•
|
5
|
|
Audit
|
|
•
|
|
•
|
C,F
|
•
|
•
|
•
|
•
|
F
|
6
|
|
Compensation
|
|
|
|
•
|
|
|
|
•
|
|
C
|
5
|
|
Governance and
Nominating |
|
|
|
|
•
|
|
C
|
|
•
|
|
3
|
| C | Chair |
| F | Financial Expert |
Chief Executive Officer Succession
On September 11, 2018, the Board of Directors appointed Timothy C. Gokey to succeed Richard J. Daly as Chief Executive Officer. Also on September 11, 2018, the Board appointed Mr. Daly to the role of Executive Chairman, after serving more than 11 years as CEO, and Leslie A. Brun, Chairman of the Board, was appointed by the Board as Lead Independent Director. All appointments are effective January 2, 2019.
These changes were designed to ensure continuity and for the Company to continue to benefit from Mr. Daly’s deep knowledge and passion for Broadridge’s business as the Company continues to grow and evolve. They were the result of a long-planned succession process, during which the Board had the opportunity to observe and evaluate Mr. Gokey in many different settings, including formal Board presentations, Board/management meetings, earnings calls, investor presentations and individual discussions with directors.
The Board determined that Mr. Gokey has been instrumental in creating and executing the strategies that have driven Broadridge’s growth over the past eight years, and that he has the right business and leadership skills, financial services experience and expertise in strategy, growth, innovation, and technology to be CEO. The Board agreed that Mr. Gokey is the right person to lead Broadridge into the future.
In his role as Executive Chairman, Mr. Daly will act as an advisor to the Chief Executive Officer on important initiatives including regulatory matters, digital adoption and retail shareholder engagement.
Our Corporate Governance Principles do not specify a policy with respect to the separation of the positions of Chairman and Chief Executive Officer or with respect to whether the Chairman should be a member of management or a non-management director. The Board recognizes that there is no single, generally accepted approach to providing Board leadership, and given the dynamic and competitive environment in which we operate, the Board’s leadership structure may vary as circumstances warrant.
The Board has determined that the leadership of the Board is currently best conducted by a Chairman. The Chairman provides overall leadership to the Board in its oversight function, while the Chief Executive Officer provides leadership
Broadridge 2018 Proxy Statement 17
Corporate Governance
with respect to the day-to-day management and operation of our business. We believe the separation of the offices allows the Chairman to focus on managing Board matters and allows the Chief Executive Officer to focus on managing our business. To further enhance the objectivity of the Board, the director nominees, other than Mr. Daly, are independent.
In connection with our recently announced CEO succession plan, the Board created the position of Executive Chairman. The Board appointed Mr. Daly to serve as our Executive Chairman, effective January 2, 2019, due to his long tenure and understanding of the Company as a founder of its core business and as CEO. The Board also believes that Mr. Daly’s service as Executive Chairman will enhance management continuity and provide a valuable resource for Mr. Gokey as he transitions to the role of CEO.
Given that Mr. Daly is not an independent director under applicable NYSE rules, the Board determined to continue the strong leadership of independent directors and created the role of Lead Independent Director. Mr. Brun was appointed by the Board to serve as Lead Independent Director, effective January 2, 2019.
The Executive Chairman will have the following duties and responsibilities as Chairman of the Board:
| • | Call Board and stockholder meetings |
| • | Preside at Board and stockholder meetings |
| • | Prepare Board meeting schedules, agendas and materials, subject to approval of the Lead Independent Director |
The Lead Independent Director’s duties and responsibilities will include:
| • | Preside at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors |
| • | Serve as liaison between the Chairman and the independent directors |
| • | Approve meeting agendas and materials for the Board |
| • | The authority to call meetings of the independent directors |
| • | Act as liaison between the independent directors and the CEO |
The Board believes that this structure will provide the Company and the Board with strong leadership, continuity of experience given Mr. Daly’s role, and appropriate independent oversight. The Board believes that having a Lead Independent Director vested with key duties and responsibilities and three independent Board committees chaired by independent directors provides a formal structure for strong independent oversight of the Executive Chairman and the Company’s management team.
Audit Committee
The Board of Directors has determined that each of the members of the Audit Committee is independent as defined by NYSE Listing Standards and the rules of the Securities and Exchange Commission (the “SEC”) applicable to audit committee members. The Board of Directors has determined that Mr. Haviland and Mr. Weber qualify as audit committee financial experts as defined in the applicable SEC rules, and that all Audit Committee members are financially literate.
The Audit Committee has a charter under which its responsibilities and authorities include assisting the Board in overseeing the:
| • | Company’s systems of internal controls regarding finance, accounting, legal and regulatory compliance |
| • | Company’s auditing, accounting and financial reporting processes generally |
| • | Integrity of the Company’s financial statements and other financial information provided by the Company to its stockholders and the public |
| • | Company’s compliance with legal and regulatory requirements |
18 Broadridge 2018 Proxy Statement
Corporate Governance
| • | Performance of the Company’s Internal Audit Department and independent registered public accountants. |
In addition, in the performance of its oversight duties and responsibilities, the Audit Committee also reviews and discusses with management the Company’s quarterly financial statements and earnings press releases as well as financial information and earnings guidance included therein; reviews periodic reports from management covering changes, if any, in accounting policies, procedures and disclosures, and management’s assessment of the effectiveness of internal control over financial reporting to ensure compliance with Section 404 of the Sarbanes-Oxley Act of 2002; and reviews and discusses with the Company’s internal auditors and with its independent registered public accountants the overall scope and plans of their respective audits.
In connection with the Company’s risk oversight process, the Audit Committee reviews and discusses with management the Company’s major financial and certain major business risk exposures (including those related to cybersecurity and data privacy) and the steps management has taken to monitor and control such exposures (including management’s risk assessment and risk management policies).
The Report of the Audit Committee is included on page 76 of this Proxy Statement. The Audit Committee’s charter is available on the Company’s Investor Relations website at www.broadridge-ir.com under the heading “Corporate Governance.”
Compensation Committee
The Board of Directors has determined that each member of the Compensation Committee is independent as defined by NYSE Listing Standards. In addition, each member of the Compensation Committee is independent for purposes of the applicable SEC and tax rules. The Compensation Committee has a charter under which its responsibilities and authorities include:
| • | Reviewing the Company’s compensation strategy |
| • | Reviewing the performance of senior management |
| • | Reviewing the risks associated with the Company’s compensation programs |
| • | Approving the compensation of the Chief Executive Officer and all other executive officers |
| • | Reviewing and making recommendations to the Board regarding the director compensation program |
In addition, the Compensation Committee administers the Company’s equity-based compensation plans and takes such other action as may be appropriate or as directed by the Board of Directors to ensure that the compensation policies of the Company are reasonable and fair.
As necessary, the Compensation Committee consults with FW Cook as its independent compensation consultant to advise on matters related to our executive officers’ and directors’ compensation and general compensation programs. FW Cook assists the Compensation Committee by providing comparative market data on compensation practices and programs. FW Cook also provides guidance on industry best practices, the design of incentive plans and other indirect elements of our overall compensation program, the setting of performance goals, and the drafting of compensation- related disclosures. For further discussion of the roles of the Compensation Committee and FW Cook, please see the section of this Proxy Statement entitled “Compensation Discussion and Analysis” beginning on page 32.
The Compensation Committee Report is included on page 53 of this Proxy Statement. The Compensation Committee’s charter is available on the Company’s Investor Relations website at www.broadridge-ir.com under the heading “Corporate Governance.”
Governance and Nominating Committee
The Board of Directors has determined that each member of the Governance and Nominating Committee is independent as defined by NYSE Listing Standards.
The Governance and Nominating Committee has a charter, under which its responsibilities and authorities include:
| • | Identifying individuals qualified to become Board members and recommending that the Board select a group of director nominees for each annual meeting of the Company’s stockholders |
Broadridge 2018 Proxy Statement 19
Corporate Governance
| • | Ensuring that the Audit, Compensation and Governance and Nominating Committees of the Board of Directors shall have the benefit of qualified and experienced independent directors |
| • | Developing and recommending to the Board a set of effective corporate governance policies and procedures applicable to the Company |
The Corporate Governance Principles and the Governance and Nominating Committee’s charter is available on the Company’s Investor Relations website at www.broadridge-ir.com under the heading “Corporate Governance.”
When seeking candidates for director, the Governance and Nominating Committee may solicit suggestions from incumbent directors, management or stockholders. The Committee will consider director candidates proposed by stockholders, provided that the stockholder recommendation complies with the Company’s By-law provisions requiring that stockholder submissions be submitted to the Company’s Secretary at 5 Dakota Drive, Lake Success, New York 11042 in a timely manner and include the information called for in the Company’s By-laws concerning (a) the potential nominee and (b) the person proposing the nomination. The Committee will apply the same standards in considering candidates submitted by stockholders as it uses for any other potential nominee. In addition, the Governance and Nominating Committee has authority under its charter to retain a search firm to assist the Company with identifying and evaluating Board candidates who have the backgrounds, skills and experience that the Committee has identified as desired in director candidates.
After conducting an initial evaluation of a potential candidate, the Governance and Nominating Committee will interview that candidate if it believes such candidate might be suitable to be a director. The candidate may also meet with other members of the Board. At the candidate’s request, they may also meet with management. If the Governance and Nominating Committee believes a candidate would be a valuable addition to the Board, it will recommend that candidate’s election to the full Board.
The Governance and Nominating Committee selects each nominee based on the nominee’s skills, achievements and experience. The Corporate Governance Principles provide that director nominees should have experience in positions with a high degree of responsibility, be leaders in the companies or institutions with which they are affiliated, and be selected based upon contributions they can make.
The Governance and Nominating Committee considers a variety of factors in selecting candidates. The minimum characteristics that the Committee believes must be met include: independence, wisdom, integrity, an understanding and general acceptance of the Company’s corporate philosophy, valid business or professional knowledge and experience, a proven record of accomplishment with excellent organizations, an inquiring mind, a willingness to speak one’s mind, an ability to challenge and stimulate management, and a willingness to commit time and energy.
In making its selection of candidates to recommend for election, the Corporate Governance Principles provide that the Board seeks members from diverse professional, racial, cultural, ethnic and gender backgrounds that combine a broad spectrum of experience and expertise with a reputation for integrity. Exceptional candidates who do not meet all of these criteria may still be considered. The Corporate Governance Principles do not provide for a fixed number of directors, but provide that the optimum size of the Company’s Board of Directors is 8 to 12 directors.
Proxy Access By-law
The Company’s By-laws provide that under certain circumstances, a stockholder, or group of up to 50 stockholders, who have maintained continuous ownership of at least three percent (3%) of our common stock for at least three years may nominate and include a specified number of director nominees in our annual meeting proxy statement. The number of stockholder-nominated candidates appearing in our annual meeting proxy statement cannot exceed 25% of the number of directors then serving on the Board of Directors.
For a description of the process for nominating directors, see page 79 of this Proxy Statement.
Annual Board and Committee Evaluation Process
The Board conducts an evaluation of its performance and effectiveness as well as that of the three committees on an annual basis. The purpose of the evaluation is to track progress in certain areas targeted for improvement from year to year and to identify ways to enhance the Board’s and committees’ effectiveness. As part of the evaluation, each director
20 Broadridge 2018 Proxy Statement
Corporate Governance
completes a written questionnaire developed by the Governance and Nominating Committee to provide feedback on the effectiveness of the Board, the committees on which they serve, as well as each individual director’s own contributions. The collective ratings and comments of the directors are compiled and then presented to the Governance and Nominating Committee by its Chair, and to the full Board for discussion and action.
The Board’s Role in Risk Oversight
The Company’s management is responsible for managing risks affecting the Company, including identifying, assessing and appropriately mitigating risk. The responsibilities of the Board of Directors include oversight of the Company’s risk management processes. The Board of Directors has two primary methods of overseeing risk. The first method is through the Company’s Enterprise Risk Management (“ERM”) process which allows for full Board oversight of the most significant risks facing the Company. The second is through the functioning of the Board’s committees.
Management established the ERM process to ensure a complete Company-wide approach to risk over five distinct but overlapping core areas:
| • | Strategic – the risks that could impede the Company from achieving its strategic vision and goals |
| • | Financial – the risks related to maintaining accurate financial statements, and timely and complete financial disclosures |
| • | Operational – the risks in the processes, people and technology the Company employs to achieve its strategy, normal business operations and cybersecurity |
| • | Compliance – the risks related to the Company’s legal and regulatory compliance requirements and violations of laws |
| • | Reputational – the risks that impact the Company’s reputation including failing to meet the expectations of its customers, investors, employees, regulators or the public |
The goal of the ERM process is to provide an ongoing procedure, effected at all levels of the Company across each business unit and corporate function, to identify and assess risk, monitor risk, and agree on mitigating action. Central to Broadridge’s risk management process is its Risk Committee, which oversees management’s identification and assessment of the key risks in the Company, and reviews the controls management has in place with respect to these risks. The Risk Committee is comprised of executive officers and senior executives of the Company including the Chief Operating Officer, Chief Financial Officer, General Counsel, Senior Managing Director of Global Technology, Chief Information Officer, Chief Security Officer, and Chief Human Resources Officer. The Risk Committee communicates the results of its work directly to the Chief Executive Officer and the Board. The Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, and General Counsel meet regularly to discuss specific risks and the Company’s risk management processes.
In addition, the Board and the Audit and Compensation Committees of the Board oversee specific areas of risk as follows:
| • | The full Board has oversight responsibility of the Company’s Strategic, Operational, and Reputational risks. |
| • | Executive officers and senior executives with specific subject matter expertise update the full Board on the Strategic, Reputational and non-information technology Operational risks. |
| • | The Senior Managing Director of Global Technology, Chief Information Officer, SVP Global Technology/Office of the CIO, and Chief Security Officer update the full Board and the Audit Committee on information technology and cybersecurity Operational risks. |
| • | The Audit Committee has oversight responsibility of the Company’s Financial and Compliance risks (other than compensation program design risk). |
| • | The Chief Financial Officer, Chief Accounting Officer, and Treasurer update the Audit Committee on the Financial risks. |
| • | The Chief Financial Officer, Chief Accounting Officer, General Counsel, and other business and finance executives update the Audit Committee on the Compliance risks. |
Broadridge 2018 Proxy Statement 21
Corporate Governance
| • | The Compensation Committee has oversight responsibility of the Company’s compensation program design risk. |
| • | The Chief Human Resources Officer updates the Compensation Committee on compensation program design risk. |
In addition, a subcommittee of the Risk Committee provides additional oversight of Broadridge’s cybersecurity risks. This Cybersecurity Council is comprised of senior executives representing a number of disciplines within the Company including the Chief Financial Officer. The Cybersecurity Council meets regularly, and reports on its activities and the progress of its cybersecurity and information security initiatives are provided regularly to the Audit Committee. In addition, the Cybersecurity Council provides a summary of its activities to the full Board.
The Chairs of the Audit Committee and Compensation Committee may address risks directly with management, or, where appropriate, may elevate a risk for consideration by the full Board. The ERM process and the full Board and committee approach to risk management leverages the Board’s leadership structure to ensure that risk is overseen by the Board on both a Company-wide approach and through specific areas of competency.
Risk Assessment of Compensation Programs
Management, with the assistance of FW Cook, performed an annual assessment of our compensation objectives, philosophy, and forms of compensation and benefits for all Broadridge employees, including the executives, to determine whether the risks arising from such policies or practices are reasonably likely to have a material adverse effect on the Company. A report summarizing the results of this assessment was reviewed and discussed with the Compensation Committee. After this review and in consultation with FW Cook, the Compensation Committee concluded that Broadridge’s compensation program does not create risks that are reasonably likely to have a material adverse effect on the Company.
The key design features in our compensation programs that support this conclusion are:
| • | The mix between fixed and variable compensation, annual and long-term compensation, and cash and equity compensation are designed to encourage strategies and actions that are in Broadridge’s and its stockholders’ long-term best interests. |
| • | Stock options and performance-based RSUs provide for significant long-term wealth creation for executive officers when the Company provides meaningful total shareholder return over a sustained period. The multiple year vesting periods of 2.5 to 4 years for equity compensation awards encourage executives to focus on sustained stock price appreciation. |
| • | Incentive awards are determined based on a review of a variety of financial and non-financial indicators of performance, which diversifies the risk associated with any single performance measure. |
| • | The Compensation Committee reviews and approves executive officer objectives to ensure that goals are aligned with the Company’s business plans, achieve the proper risk/reward balance, and do not encourage unnecessary or excessive risk taking. |
| • | The Compensation Committee has the ability to use its discretion to reduce earned incentive awards based on a subjective evaluation of each individual’s performance against strategic and leadership objectives and other factors. |
| • | Broadridge maintains a clawback policy that requires the reimbursement by an executive officer of cash or equity incentive compensation earned by any executive officer in connection with a restatement of the Company’s financial statements due to material noncompliance with financial reporting requirements. |
| • | Officer Stock Ownership Guidelines are in place for all of the Company’s executive officers providing the goal that executive officers accumulate shares of our common stock ranging in value from two times to six times their current annual base salary based on their roles. |
22 Broadridge 2018 Proxy Statement
Corporate Governance
| • | Officer Stock Retention and Holding Period Requirements are in place providing the goal that all executive officers retain at least 50% of the net profit shares realized from stock option exercises and RSU vesting in the form of Broadridge common stock. These net profit shares must be held indefinitely if the executive officer has not met the stock ownership guideline and must be held for a minimum of one year if the executive officer has met the ownership guideline. |
| • | A Pre-Clearance and Insider Trading Policy is in place that requires pre-approval of any transactions in Broadridge common stock by executive officers and directors and prohibits the hedging or pledging of our stock. |
The Board is actively engaged and involved in executive officer talent management. The Board reviews the Company’s executive talent management strategy which includes a discussion of the Company’s leadership bench and succession plans with a focus on key positions at the senior officer level.
In addition, the committees of the Board regularly discuss the talent pipeline for specific critical roles. High potential leaders are given exposure and visibility to Board members through formal presentations and informal events. More broadly, the Board is regularly updated on key talent indicators for the overall workforce, including diversity, recruiting and development programs.
Communications with the Board of Directors
All interested parties who wish to communicate with the Board of Directors or any of the non-management directors, may do so by sending a letter to the Secretary, Broadridge Financial Solutions, Inc., 5 Dakota Drive, Lake Success, New York 11042, and should specify the intended recipient. All such communications, other than unsolicited commercial solicitations or communications, will be forwarded to the appropriate director for review. Any such unsolicited commercial solicitation or communications not forwarded to the appropriate director will be available to any non-management director who wishes to review it. The Governance and Nominating Committee, on behalf of the Board, will review any letters it may receive concerning the Company’s corporate governance processes and will make recommendations to the Board based on such communications.
Code of Business Conduct and Code of Ethics
The Company has adopted a Code of Business Conduct and Ethics (the “Code of Business Conduct”) and a Code of Ethics for Principal Executive Officer and Senior Financial Officers (the “Code of Ethics”) which applies, among others, to the Company’s principal executive officer, principal financial officer and chief accounting officer. The Company will post on its website any amendment to the Code of Business Conduct or the Code of Ethics and any waiver of the Code of Business Conduct or the Code of Ethics granted to any of its directors or executive officers to the extent required by applicable rules.
Website Access to Corporate Governance Documents
Copies of the Corporate Governance Principles, Code of Business Conduct, Code of Ethics and the Charters of the committees of the Board of Directors are available on our Investor Relations website at www.broadridge-ir.com under the heading “Corporate Governance” or by writing to the Secretary, Broadridge Financial Solutions, Inc., 5 Dakota Drive, Lake Success, New York 11042.
Certain Relationships and Related Transactions
The Company maintains a written Related Party Transactions Policy. Under this policy, any transaction between the Company and a “related person” in which such related person has a direct or indirect material interest must be submitted to our Audit Committee for review, approval, or ratification.
A “related person” means a director, executive officer or beneficial holder of more than five percent (5%) of the Company’s outstanding common stock, or any immediate family member of the foregoing, as well as any entity at which any such person is employed, is a partner or principal (or holds a similar position), or is a beneficial owner of a 10% or greater direct or indirect equity interest. Our directors and executive officers must promptly inform our General Counsel of any plan to engage in a potential related party transaction.
Broadridge 2018 Proxy Statement 23
Corporate Governance
This policy requires our Audit Committee to be provided with full information concerning the proposed transaction, including the risks and benefits to the Company and the related person, any alternative means by which to obtain like products or services, and the terms of a similar transaction with an unaffiliated third party. In considering whether to approve any such transaction, the Audit Committee will consider all relevant facts and circumstances, including the nature of the interest of the related person in the transaction and the terms of the transaction. Specific types of transactions are excluded from review under the policy, such as, for example, transactions in which the related person’s interest derives solely from his or her service as a director of another entity that is a party to the transaction.
In fiscal year 2018, the Company did not engage in any related party transaction in which the amount involved exceeded $120,000.
In addition, the Code of Business Conduct prohibits Company personnel, including members of the Board of Directors, from exploiting their positions or relationships with Broadridge for personal gain. The Code of Business Conduct provides that there shall be no waiver of any part of the Code of Business Conduct, except by a vote of the Board of Directors or a designated committee, which will ascertain whether a waiver is appropriate and ensure that the waiver is accompanied by appropriate controls designed to protect Broadridge.
Director Attendance at Annual Meetings
The Company does not have a formal policy with regard to the directors’ attendance at annual meetings of stockholders. Generally, however, Board and committee meetings are held the same day as the annual meeting of stockholders, with directors attending the annual meeting. All of our incumbent directors who were members of our Board at the time attended the Company’s 2017 annual meeting of stockholders.
We believe that regular, transparent communication with our stockholders is essential to our long-term success. Throughout the year, members of our management team regularly engage with our stockholders to ensure that we are addressing their questions or concerns. We do this through the participation of our Chief Executive Officer, President and Chief Financial Officer at industry and investment community conferences, investor road shows, and analyst meetings both in our offices and in the offices of current and potential institutional investors. We provide several ways for our stockholders to communicate with us, including by email and telephone. During fiscal year 2018, members of our management team met with representatives of many of our top institutional stockholders to discuss our business strategy, financial performance, capital stewardship program, governance practices, executive compensation, and various other matters. We also invited our institutional investors to an “Investor Day” presentation at which several executives discussed our businesses in greater detail. Management shares with the Board any concerns raised by our stockholders. We have had success engaging with our stockholders to understand their questions or concerns, and we remain committed to these efforts on an ongoing basis.
We welcome feedback from all stockholders, who can contact our Investor Relations team by calling 516-472-5400 or by emailing broadridgeir@broadridge.com.
24 Broadridge 2018 Proxy Statement
The following table sets forth information regarding individuals who serve as our executive officers.
|
Name
|
Age
|
Position(s)
|
|
Richard J. Daly
|
65
|
Chief Executive Officer, Director
|
|
Timothy C. Gokey
|
57
|
President and Chief Operating Officer
|
|
Christopher J. Perry
|
56
|
Corporate Senior Vice President, Global Sales, Marketing and Client Solutions
|
|
Robert Schifellite
|
60
|
Corporate Senior Vice President, Investor Communication Solutions
|
|
Adam D. Amsterdam
|
57
|
Corporate Vice President and General Counsel
|
|
Thomas P. Carey
|
47
|
Corporate Vice President, Broadridge International
|
|
Douglas R. DeSchutter
|
48
|
Corporate Vice President, Customer Communications
|
|
Robert F. Kalenka
|
55
|
Corporate Vice President, Investor Communication Solutions Operations
|
|
Michael Liberatore
|
52
|
Corporate Vice President, Investor Communication Solutions, Mutual Funds
|
|
Charles J. Marchesani
|
58
|
Corporate Vice President, Global Technology and Operations
|
|
Laura Matlin
|
59
|
Corporate Vice President, Deputy General Counsel, Chief Governance Officer and Chief Compliance Officer
|
|
Vijay Mayadas
|
46
|
Corporate Vice President, Global Fixed Income and Analytics
|
|
Michael S. Tae
|
42
|
Corporate Vice President, Corporate Strategy
|
|
Julie R. Taylor
|
50
|
Corporate Vice President, Chief Human Resources Officer
|
|
James M. Young
|
47
|
Corporate Vice President and Chief Financial Officer
|
Richard J. Daly. Mr. Daly is our Chief Executive Officer and a member of our Board of Directors. Mr. Daly’s biographical information is set forth in the “Proposal 1—Election of Directors—Information About the Nominees” section of this Proxy Statement.
Timothy C. Gokey. Mr. Gokey is our President and Chief Operating Officer. He is responsible for the operation of all Broadridge’s business units, technology, and operations in India. Effective January 2, 2019, Mr. Gokey will succeed Mr. Daly as Chief Executive Officer. Mr. Gokey was appointed Broadridge’s President in 2017. Previously, he served as our Corporate Senior Vice President and Chief Operating Officer, a position he held since 2012. Mr. Gokey joined Broadridge in 2010 as Chief Corporate Development Officer and was responsible for the Company’s growth initiatives, including sales and marketing, strategy, mergers and acquisitions, partnerships, and other growth-related activities. Prior to joining Broadridge, Mr. Gokey was President of the Retail Tax business at H&R Block from 2004 and he spent 13 years at McKinsey and Company, a global consulting firm, where he led McKinsey’s North American Financial Services Sales and Marketing Practice. Mr. Gokey was appointed to the Board of Directors of C.H. Robinson Worldwide, Inc., a $13 billion global logistics provider, in 2017. He is also on the Board of St. John’s Episcopal Church, Cold Spring Harbor, New York.
Christopher J. Perry. Mr. Perry is our Corporate Senior Vice President, Global Sales, Marketing and Client Solutions. He joined Broadridge in 2014 after more than 25 years of experience in banking, brokerage and financial information services. Most recently, he was Global Managing Director of Risk for the Financial & Risk division of Thomson Reuters. In this role, he was the general manager of a global segment which includes Governance, Risk, Compliance, Pricing, Valuation and Reference Services. Over the previous 14 years, Mr. Perry held numerous roles at Thomson Reuters and its predecessor, Thomson Financial. From 2011 to 2013, he was President, Global Sales & Account Management at the Financial & Risk division of Thomson Reuters. From 2006 to 2010, he served as President, Americas for Thomson Reuters and its predecessor, Thomson Financial. Earlier in his career, Mr. Perry worked for A-T Financial and PC Quote, after spending many years in institutional trading and retail brokerage with Kemper Financial’s Blunt Ellis & Loewi unit.
Robert Schifellite. Mr. Schifellite is our Corporate Senior Vice President, Investor Communication Solutions. He is the President of our Investor Communication Solutions business segment. In addition to the bank, broker-dealer and corporate issuer solutions businesses within Investor Communication Solutions, in fiscal year 2018, Mr. Schifellite assumed responsibility for the Mutual Fund and Retirement Solutions business, and in fiscal year 2019, he assumed responsibility for the Customer Communications business. Mr. Schifellite joined ADP’s Brokerage Services Group in
Broadridge 2018 Proxy Statement 25
Management
1992 as Vice President, Client Services. In 1996, he was promoted to Senior Vice President and General Manager of Investor Communication Services. In 2007, when Broadridge became an independent company, he was appointed Corporate Vice President and head of the bank, broker-dealer and corporate issuer solutions businesses of our Investor Communication Solutions segment. In 2011, Mr. Schifellite’s title was changed from Corporate Vice President to Corporate Senior Vice President of Broadridge.
Adam D. Amsterdam. Mr. Amsterdam is our Corporate Vice President and General Counsel. Mr. Amsterdam is responsible for all legal matters related to the Company. Prior to the spin-off, he served as Associate General Counsel and Staff Vice President of ADP since January 2006. Mr. Amsterdam joined ADP in 1991 as Corporate Counsel responsible for the Brokerage Services Group. In 1994, he was promoted to Senior Corporate Counsel of ADP. Mr. Amsterdam was promoted in 1996 to Assistant General Counsel and then again in 2002 to Associate General Counsel of ADP.
Thomas P. Carey. Mr. Carey is our Corporate Vice President, Broadridge International. He became responsible for the Broadridge International business in 2017, and was appointed a corporate officer by the Board in 2018. He is responsible for all aspects of the Company’s growth and development across the EMEA and APAC regions for its governance, capital markets and asset management solutions. Mr. Carey joined ADP in 1992, and has held various roles with increasing responsibility at ADP and Broadridge, including as head of technology for the international business of ADP’s Brokerage Services Group from 2001 to 2004, and Chief Operating Officer of the international business of ADP’s Brokerage Services Group from 2004 to 2008. From 2009 to 2017, Mr. Carey was responsible for the international business of Broadridge’s Global Technology and Operations segment.
Douglas R. DeSchutter. Mr. DeSchutter is our Corporate Vice President, Customer Communications. Mr. DeSchutter is responsible for our customer communications business comprising both transactional print and digital solutions, as well as our overall digital strategy. Prior to his appointment to his current role in 2017, Mr. DeSchutter was responsible for our digital solutions business from 2015 to 2016, our U.S. regulatory communication services (proxy and prospectus) from 2012 to 2015, and our transactional reporting services business from 2009 to 2012, including print and electronic transaction reporting communications, document management, and new account processing solutions. Mr. DeSchutter was the Chief Strategy and Business Development Officer for Broadridge, responsible for mergers and acquisitions and strategy, from 2007 to 2009. Prior to the spin-off of Broadridge from ADP in 2007, Mr. DeSchutter served in various capacities at ADP in corporate development and strategy. Prior to joining ADP in 2002, he was Vice President of Mergers & Acquisitions at Lehman Brothers focusing on the technology sector. Mr. DeSchutter also serves as the Company’s representative on the board of Inlet, LLC, a joint venture between Broadridge and Pitney Bowes.
Robert F. Kalenka. Mr. Kalenka is our Corporate Vice President, Investor Communication Solutions Operations. He is responsible for global facilities and the operations of our Investor Communication Solutions business. In 2016, Mr. Kalenka’s responsibilities were expanded to include the role of Chief Operations Officer of the Broadridge Customer Communications business within the Investor Communication Solutions segment, where he leads the Operations and Client Relations teams. Mr. Kalenka joined ADP’s Brokerage Services Group in 1992 in the Investor Communication Services Division as Director of Finance. He was promoted to Vice President of Operations of the Investor Communication Services Division in 1994, and again as Chief Operating Officer and Senior Vice President of the Investor Communication Services Division in 1999.
Michael Liberatore. Mr. Liberatore is our Corporate Vice President, Investor Communication Solutions, Mutual Funds. He is the President of the Mutual Fund and Retirement Solutions business within our Investor Communication Solutions segment and is responsible for all aspects of that business. Prior to assuming this role in 2015, Mr. Liberatore was responsible for the finance functions of the Company’s two business segments, as well as its corporate financial planning and analysis function, and treasury operations. In 2014, Mr. Liberatore served as Broadridge’s Acting Principal Financial Officer during a six month period prior to Mr. Young joining the Company. Previously, he served as the Chief Operating Officer of the Mutual Fund and Retirement Solutions business from 2011 to 2013, and was responsible for all operations of the business, including technology and financial results. Mr. Liberatore joined ADP’s Brokerage Services Group in 2004, as Assistant Controller of the Investor Communication Solutions business, and held several finance roles with increasing responsibility, including Chief Financial Officer of the Investor Communication Solutions business from 2008 to 2011.
26 Broadridge 2018 Proxy Statement
Management
Charles J. Marchesani. Mr. Marchesani is our Corporate Vice President, Global Technology and Operations. He is the President of the Global Technology and Operations business and is responsible for all aspects of that business. In 2013, his role was expanded to include responsibility for our international securities processing solutions and business process outsourcing solutions businesses. Prior to his current role, Mr. Marchesani was responsible for the U.S. securities processing solutions business. Mr. Marchesani joined ADP’s Brokerage Services Group in 1992 in the Market Data Services division as Director of the Help Desk and served in various roles of increasing responsibility within the Brokerage Processing Services business until he was promoted to General Manager of the Brokerage Processing Services business in 2005.
Laura Matlin. Ms. Matlin is our Corporate Vice President, Deputy General Counsel, Chief Governance Officer and Chief Compliance Officer. As Deputy General Counsel, she is responsible for the legal department’s operations and helps set the department’s strategy. In her role as Chief Governance Officer, Ms. Matlin works closely with Broadridge’s Board of Directors and represents the Company’s leadership on corporate governance issues. In 2017, the role of Chief Compliance Officer was added to her responsibilities. Prior to 2015, she served as the Company’s Associate General Counsel, Chief Privacy Officer and Assistant Corporate Secretary since the spin-off of Broadridge in 2007. In addition, Ms. Matlin served as the acting Chief Human Resources Officer from 2014 to 2015. Prior to the spin-off, she served as Assistant General Counsel of ADP. Ms. Matlin joined ADP in 1997 as Corporate Counsel in ADP’s Brokerage Services Group.
Vijay Mayadas. Mr. Mayadas is our Corporate Vice President, Global Fixed Income and Analytics. He is the President of the Global Fixed Income division within our Global Technology and Operations business and is responsible for our pre-trade, post-trade and data and analytics initiatives. In addition, Mr. Mayadas leads our blockchain initiatives. From 2013 when he joined Broadridge, to 2016, Mr. Mayadas was the Senior Vice President, Corporate Strategy and M&A and was responsible for our strategy, acquisitions, partnerships and other growth-related activities within the organization. Prior to joining Broadridge, Mr. Mayadas held a variety of roles in private equity, strategy consulting, and technology. He worked at IFA, a private equity firm, from 2011 to 2013, and at the Boston Consulting Group, a global consulting firm, from 2005 to 2011. Earlier in his career he co-founded and sold a software company, and worked as a software engineer on fixed income trading platforms.
Michael S. Tae. Mr. Tae is our Corporate Vice President, Corporate Strategy. He joined Broadridge in 2017, and leads Broadridge’s corporate strategy function. He began his career in 1999 at McKinsey & Company, consulting clients in the financial services industry, before moving in 2004 to Merrill Lynch where he was investment banking Vice President of their Financial Institutions Group. From 2009 to 2012, Mr. Tae served as Director of Investments for the Troubled Asset Relief Program at the U.S. Department of Treasury. From 2012 to 2015, he served as a Director at Millstein & Co., a financial and strategic advisory services company. Most recently, from 2015 to 2017, Mr. Tae was the Senior Executive Vice President of Worldwide Services for MicroStrategy Incorporated.
Julie R. Taylor. Ms. Taylor is our Corporate Vice President, Chief Human Resources Officer. She joined Broadridge in 2015, and leads all aspects of human resources globally, including talent acquisition, organizational development, training, compensation and benefits. Ms. Taylor has over 20 years of human resources experience, most recently as Chief Human Resources Officer at Pall Corporation, a global supplier of filtration, separations and purification products with more than 10,000 employees. She previously served as Vice President of Human Resources for U.S. Pharmaceuticals at Bristol-Myers Squibb, and in various human resources roles at General Electric Company, where she had a 13-year tenure, and at Merck & Co., Inc., where she began her career.
James M. Young. Mr. Young is our Corporate Vice President and Chief Financial Officer. He joined Broadridge in 2014 after serving in senior finance roles at Visa Inc., a global payments technology company, where he worked from 2006 until 2014. Most recently, Mr. Young served as Senior Vice President, Finance and was responsible for global financial planning and analysis for Visa’s businesses in North America, Latin America, Asia Pacific, Central Europe, the Middle East and Africa since 2013. Previously, he served as the Head of Corporate Finance, where he was responsible for Visa’s global controllership, tax and financial planning and analysis functions. Earlier, he held several finance roles with increasing responsibility including leading finance for Visa’s North America division from 2008 to 2010 and playing a lead role in Visa’s $19 billion IPO in 2008. Prior to joining Visa, Mr. Young was a finance executive at early stage technology companies Arena Solutions and Grand Central Communications.
Broadridge 2018 Proxy Statement 27
Ownership of Common Stock by Management and Certain Beneficial Owners
The following table shows the number of shares of common stock beneficially owned by (a) each of our directors, (b) each of our director nominees, (c) each executive officer named in the Summary Compensation Table, and (d) by all directors, director nominees, and executive officers as of July 31, 2018, as a group.
The information set forth below is as of July 31, 2018, and is based upon information supplied or confirmed by the named individuals. Unless otherwise noted, the beneficial owners exercise sole voting and/or investment power over their shares. The address of each person named in the table below is c/o Broadridge Financial Solutions, Inc., 5 Dakota Drive, Lake Success, New York 11042.
|
Beneficial Owner
|
Common Shares(1)(2)(3)
|
Percentage of
Common Shares Beneficially Owned |
||||
|
Leslie A. Brun
|
|
147,643
|
|
|
*
|
|
|
Pamela L. Carter
|
|
4,977
|
|
|
*
|
|
|
Richard J. Daly(4)
|
|
615,565
|
|
|
*
|
|
|
Robert N. Duelks
|
|
93,393
|
|
|
*
|
|
|
Timothy C. Gokey
|
|
425,298
|
|
|
*
|
|
|
Richard J. Haviland(5)
|
|
109,713
|
|
|
*
|
|
|
Brett A. Keller
|
|
21,470
|
|
|
*
|
|
|
Stuart R. Levine(6)
|
|
112,813
|
|
|
*
|
|
|
Maura A. Markus
|
|
50,642
|
|
|
*
|
|
|
Thomas J. Perna
|
|
96,393
|
|
|
*
|
|
|
Christopher J. Perry
|
|
29,097
|
|
|
*
|
|
|
Robert Schifellite
|
|
225,055
|
|
|
*
|
|
|
Alan J. Weber
|
|
127,793
|
|
|
*
|
|
|
James M. Young
|
|
131,016
|
|
|
*
|
|
|
All directors, director nominees, and executive officers as a group (24)
|
|
2,746,495
|
|
|
2.3
|
%
|
| * | Represents beneficial ownership of less than 1% of the issued and outstanding shares of our common stock. |
| (1) | Includes unrestricted shares of common stock over which each director or executive officer has sole voting and investment power. |
| (2) | Amounts reflect vested stock options and stock options that will vest within 60 days of July 31, 2018. If shares are acquired, the director or executive officer would have sole discretion as to voting and investment. The shares beneficially owned include: (i) the following shares subject to such options granted to the following directors and executive officers: 116,723 (Mr. Brun); 4,107 (Ms. Carter); 292,115 (Mr. Daly); 76,966 (Mr. Duelks); 375,831 (Mr. Gokey); 61,866 (Mr. Haviland); 17,718 (Mr. Keller); 88,166 (Mr. Levine); 42,043 (Ms. Markus); 76,966 (Mr. Perna); 143,208 (Mr. Schifellite); 88,166 (Mr. Weber); and 103,364 (Mr. Young); and (ii) 1,870,975 shares subject to such options granted to all directors and executive officers as a group. |
| (3) | Amounts provided for each director, other than Mr. Daly, include DSU awards which are fully vested upon grant, and will settle as shares of common stock upon the director’s separation from service on the Board. The DSUs are credited with dividend equivalents in the form of additional DSUs on a quarterly basis as dividends are declared by the Broadridge Board. |
| (4) | Includes 20,000 shares of common stock held by The EED 2012 Trust, 20,000 shares of common stock held by The KLD 2012 Trust, 5,445 shares of common stock held by The EED 2014 Trust, 5,445 shares of common stock held by The KLD 2014 Trust, trusts formed for the benefit of Mr. Daly’s children, and 48,379 shares of common stock held by The RD 2016 GRAT, a grantor retained annuity trust formed by Mr. Daly in August 2016. Mr. Daly and his wife are co-trustees of these trusts. |
| (5) | Includes 13,285 shares of common stock held in two trusts in which Mr. Haviland and his wife are co-trustees. |
| (6) | Includes 1,158 shares of common stock held in the Stuart R. Levine Revocable Trust, a trust in which Mr. Levine is the trustee. |
28 Broadridge 2018 Proxy Statement
Ownership of Common Stock by Management and Certain Beneficial Owners
The following table sets forth the amount of beneficial ownership of each beneficial owner of more than five percent (5%) of our common stock:
|
Beneficial Owner
|
Common Shares
|
Percentage of
Common Shares Beneficially Owned |
||||
|
BlackRock, Inc.(1)
|
|
13,884,096
|
|
|
11.9
|
%
|
|
The Vanguard Group, Inc.(2)
|
|
12,096,012
|
|
|
10.36
|
%
|
|
Janus Henderson Group plc (3)
|
|
7,129,443
|
|
|
6.1
|
%
|
| (1) | Based on information as of December 31, 2017 contained in a Schedule 13G/A dated January 17, 2018 and filed on January 19, 2018 by BlackRock, Inc. (“BlackRock”), BlackRock reported sole voting power with respect to 12,728,707 shares of the Company’s common stock and sole dispositive power with respect to 13,884,096 shares of the Company’s common stock. The address of BlackRock is 55 East 52nd Street, New York, NY 10055. |
| (2) | Based on information as of March 29, 2018 contained in a Schedule 13G/A filed on April 10, 2018 by The Vanguard Group, Inc. (“Vanguard Group”), Vanguard Group reported that it has beneficial ownership of 12,096,012 shares of the Company’s common stock, which includes 54,532 shares beneficially owned by Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard Group, as a result of its serving as investment manager of collective trust accounts, and 101,976 shares beneficially owned by Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of Vanguard Group, as a result of its serving as an investment manager. Vanguard Group has sole voting power with respect to 91,161 shares of the Company’s common stock, sole dispositive power with respect to 11,975,503 shares of the Company’s common stock, shared voting power with respect to 46,447 shares of the Company’s common stock and shared dispositive power with respect to 120,509 shares of the Company’s common stock. The address of Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355. |
| (3) | Based on information as of December 31, 2017 contained in a Schedule 13G/A filed on February 13, 2018 by Janus Henderson Group PLC (“Janus”), Janus, together with its affiliated entities INTECH Investment Management LLC (“INTECH”), Janus Capital Management LLC (“Janus Capital”), Perkins Investment Management LLC, Geneva Capital Management LLC (“Geneva”), Henderson Global Investors Limited (“HGIL”), Janus Henderson Investors Australia Institutional Funds Management Limited (“HGIAIFML”), and Henderson Global Investors North America Inc. (“HGINA”), reported beneficial ownership of 7,129,443 shares of the Company’s common stock, which includes 223,685 shares beneficially owned by INTECH, a majority-owned subsidiary of Janus, as a result of its serving as an investment adviser or sub-adviser, 6,200,013 shares beneficially owned by Janus Capital, a wholly-owned subsidiary of Janus, as a result of its serving as an investment adviser or sub-adviser, 681,438 shares beneficially owned by Geneva, a wholly-owned subsidiary of Janus, as a result of its serving as an investment adviser or sub-adviser, 14,330 shares beneficially owned by HGIL, a wholly-owned subsidiary of Janus, as a result of its serving as an investment adviser or sub-adviser, 9,730 shares beneficially owned by HGINA, a wholly-owned subsidiary of Janus, as a result of its serving as an investment adviser or sub-adviser, and 247 shares beneficially owned by HGIAIFML, a wholly-owned subsidiary of Janus, as a result of its serving as an investment adviser or sub-adviser. Janus has shared voting and dispositive power with respect to 7,129,443 shares of the Company’s common stock. The address of Janus is 201 Bishopsgate EC2M 3AE, United Kingdom. |
Section 16(a) Beneficial Ownership Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires the Company’s executive officers, directors and persons who own more than 10% of our common stock to file initial reports of ownership and changes in ownership with the SEC. To the Company’s knowledge, with respect to the fiscal year ended June 30, 2018, all applicable filings were timely made, except that Thomas P. Carey inadvertently failed to file a Form 4 reflecting the grant of stock options received on February 12, 2018 on a timely basis due to a technical error which delayed acceptance of the filing by the SEC until 6 a.m. on the morning following the Company’s transmission.
Broadridge 2018 Proxy Statement 29
Proposal 2 — Advisory Vote to Approve the Compensation of our Named
Executive Officers (the Say on Pay Vote)
In recognition of the interest the Company’s stockholders have in the Company’s executive compensation policies and practices, and in accordance with the requirements of Section 14A of the Exchange Act, this proposal provides the Company’s stockholders with an opportunity to cast an advisory vote on the compensation of the Named Executive Officers, as disclosed pursuant to the SEC’s compensation disclosure rules in this Proxy Statement.
At the 2017 annual meeting of stockholders, approximately 97% of the votes cast on the Say on Pay Vote were voted in favor of the proposal. The Compensation Committee discussed the results of this advisory vote in connection with its review of compensation decisions.
As described in more detail beginning on page 32 of this Proxy Statement under the heading “Executive Compensation—Compensation Discussion and Analysis,” the Company has adopted an executive compensation program that reflects the Company’s philosophy that executive compensation should be structured to align each executive’s interests with the interests of our stockholders. Provided below are a few highlights of our performance and our executive compensation policies and practices in fiscal year 2018.
| • | Pay for Performance. The mix of compensation elements for the Named Executive Officers, and particularly the CEO, is more heavily weighted towards variable, performance-based compensation than for the balance of the Company’s executive officers. This is intended to ensure that the executives who are most responsible for overall performance and changes in stockholder value are held most accountable for results. For example, approximately 89% of the total target fiscal year 2018 compensation of our CEO, and approximately 77% of the total target fiscal year 2018 compensation of our other Named Executive Officers (on average), is at risk and tied primarily to the growth and profitability of the Company. |
As discussed in the 2018 Financial Performance Highlights section beginning on page 33 below, in fiscal year 2018, we reported strong financial performance including record closed sales results.
In line with the Company’s strong overall financial performance in fiscal year 2018, the annual cash incentive payments for the Named Executive Officers ranged from 125% to 136% of their targets. In addition, because of our strong EPS performance in fiscal year 2018, performance-based RSU target awards were earned at 130% of their target amounts.
The TDC of the Named Executive Officers increased in fiscal year 2018 due to the short-term cash incentive payouts reflecting the Company’s performance in this fiscal year. In addition, in some cases, based on executive performance in the prior fiscal year, TDC targets were increased for fiscal year 2018.
In summary, the Compensation Committee concluded that fiscal year 2018 compensation was well aligned with our performance for the year and that the connection between pay and performance is strong.
| • | Pay Targeted at Median. Our goal is to position target compensation at the median of the external market for the Named Executive Officers. On an individual basis, target compensation for each Named Executive Officer may be set above or below median based on a variety of factors including sustained performance over time, readiness for promotion to a higher level, and skill set and experience relative to external market counterparts. Actual compensation varies above or below the target level based on the degree to which specific performance goals are attained in the variable incentive plans, changes in stock value over time, and the individual performance of each executive. |
| • | Risk Mitigation and Corporate Governance Policies and Practices. The Company has certain policies in place to minimize excessive risk taking such as a clawback policy and a policy that prohibits the hedging or pledging of the Company’s stock. In consultation with its independent compensation consultant, FW Cook, the Compensation Committee has reviewed the compensation programs for all Broadridge employees and has concluded that these programs do not create risks that are reasonably likely to have a material adverse effect on the Company. |
In addition, the Company has certain governance and compensation policies and practices in place to ensure that we meet best practices in corporate governance. Please see the “Compensation Governance Policies and Practices” and the “Corporate Governance Policies” sections on pages 38 and 50, respectively, of this Proxy Statement for descriptions of these policies and practices.
30 Broadridge 2018 Proxy Statement
Proposal 2 — Advisory Vote to Approve the Compensation of our Named
Executive Officers (the Say on Pay Vote)
The stockholder vote on this proposal is not intended to address any specific element of compensation, but rather the overall compensation of our Named Executive Officers. This vote is advisory and will not be binding on the Company. However, the Board of Directors and the Compensation Committee will review and consider the voting results when evaluating future compensation decisions relating to our Named Executive Officers.
We request that stockholders approve, on an advisory basis, the compensation of our Named Executive Officers, as disclosed in this Proxy Statement.
Required Vote
The affirmative vote of a majority of votes cast at the 2018 Annual Meeting, in person or by proxy, and entitled to be voted on this proposal at the Annual Meeting is required for advisory approval of the proposal, provided that a quorum is present. Abstentions and broker non-votes will be included in determining whether there is a quorum. In determining whether the proposal has received the requisite number of affirmative votes, abstentions will have no effect on the outcome of the vote. Pursuant to NYSE regulations, brokers do not have discretionary voting power with respect to this proposal, and broker non-votes will have no effect on the outcome of the vote.
Recommendation of the Board of Directors
The Board of Directors Recommends a Vote “FOR” the Approval of the Compensation of our Named Executive Officers as Disclosed in this Proxy Statement
Broadridge 2018 Proxy Statement 31
Compensation Discussion and Analysis
This section of the Proxy Statement explains the design and operation of our executive compensation program with respect to the following Named Executive Officers listed on the Summary Compensation Table on page 54:
|
Name
|
Title
|
|
Richard J. Daly
|
Chief Executive Officer
|
|
James M. Young
|
Corporate Vice President and Chief Financial Officer (“CFO”)
|
|
Timothy C. Gokey
|
President and Chief Operating Officer (“COO”)
|
|
Christopher J. Perry
|
Corporate Senior Vice President, Global Sales, Marketing and Client Solutions
|
|
Robert Schifellite
|
Corporate Senior Vice President, Investor Communication Solutions
|
Philosophy and Objectives of our Executive Compensation Program
The philosophy underlying our executive compensation program is to provide an attractive, flexible, and market-based total compensation program tied to performance and aligned with the interests of our stockholders. Our objective is to recruit and retain top caliber executive officers and other key employees to deliver sustained high performance to our stockholders.
Within this framework, we observe the following principles:
| • | Hire and motivate talented executive officers: Base salaries and target incentive compensation opportunities are designed to be market competitive to attract, engage and retain executives who will help ensure our future success. In addition, our program is designed to motivate and inspire behavior that fosters a high performance culture while maintaining a reasonable level of risk and adherence to the highest standards of overall corporate governance. |
| • | Pay for performance: Our program is designed to provide a clear line of sight and connection between compensation and performance, both individual and organizational. A significant portion of each executive’s pay varies based on organizational, individual and, where appropriate, divisional performance. |
| • | Align compensation with stockholder value: We align the interests of our executives with stockholders by ensuring that their compensation is heavily weighted towards variable, performance-based compensation. We use a combination of short- and long-term incentives to motivate our executives to meet annual goals in a manner that supports our longer term strategic objectives, with a significant portion of our executives’ compensation opportunity linked to Broadridge common stock. |
| • | Our annual cash incentive program is designed to reward annual performance as measured by achievement against pre-set annual financial and operating goals. |
| • | Our long-term equity incentive compensation program is designed to align executive officer financial interests with those of stockholders and to help improve our long-term profitability and stability through the attraction and retention of superior talent. |
32 Broadridge 2018 Proxy Statement
Executive Compensation
The components of our executive compensation program are outlined below:
|
|
Base Salary
Page 41 |
Annual Cash Incentive
Page 42 |
|||
|
Who receives
|
All Named Executive Officers
|
||||
|
Form of delivery
|
Cash
|
Equity
|
|||
|
Performance period
|
Ongoing
|
One year
|
Two years, plus additional vesting period (total 30-month vesting period)
|
Four year vesting period
|
|
|
Performance measures
|
N/A
|
•
|
Three financial measures for corporate officers plus three financial measures for divisional officers
|
Adjusted EPS
|
Stock price appreciation
|
|
•
|
Client satisfaction goals
|
||||
|
•
|
Individual strategic and leadership goals
|
||||
|
Link to Compensation and Business Objectives
|
Attract and retain executive talent
|
Focus executives on achieving annual financial and operating results
|
Focus executives on EPS growth, which drives long-term value to stockholders
|
Align executives with stockholders through mutually beneficial interest in driving stock price appreciation
|
|
We also provide additional benefits, including retirement plans and modest perquisites as described beginning on page 48.
2018 Financial Performance Highlights
In fiscal year 2018, we achieved another year of strong financial performance.
Broadridge 2018 Proxy Statement 33
Executive Compensation
Our strong financial results enabled the Company to generate total shareholder return of 55% for the one-year period ended June 30, 2018. This performance is within the top quartile of companies in the S&P 500. Our total return is calculated as the annualized rate of return reflecting our common stock price appreciation plus the reinvestment of dividends and the compounding effect of dividends paid on reinvested dividends. We continued to return capital to our stockholders through share repurchases and increased levels of dividends, while also investing in our business through acquisitions.
During the fiscal year, we repurchased 2 million shares for a total amount of $225 million, net of proceeds from the exercise of stock options. In total, in fiscal year 2018 we returned $391 million to stockholders in the form of dividends and share repurchases.
Acquisitions are an important part of our strategy. We spent a total of $148 million on six acquisitions and other strategic investments in fiscal year 2018, including the acquisitions of Summit Financial Disclosure, LLC, a full service financial document management solutions provider, including document composition and regulatory filing services; ActivePath Solutions Ltd., a digital technology company with technology that enhances the consumer experience associated with consumer statements, bills and regulatory communications; and FundAssist Limited, a regulatory, marketing and sales solutions service provider to the global investments industry.
The Board of Directors increased the annual dividend amount declared by 11% during fiscal year 2018. Also, in August 2018, the Board of Directors increased our annual dividend amount for fiscal year 2019 by 33% to $1.94 per share, subject to the discretion of the Board to declare quarterly dividends. With this increase, our annual dividend has increased for the eleventh consecutive year since becoming a public company in 2007.
34 Broadridge 2018 Proxy Statement
Executive Compensation
|
Explanation and Reconciliation of the Company’s Use of Non-GAAP Financial Measures
|
|
|
Certain financial results in the Proxy Summary section and this 2018 Financial Performance Highlights section are not presented in accordance with U.S. generally accepted accounting principles (“Non-GAAP”). These Non-GAAP measures are adjusted net earnings and adjusted EPS, and they should be viewed in addition to, and not as a substitute for, our reported results.
|
|
|
Our Non-GAAP adjusted earnings results exclude the impact of certain costs, expenses, gains and losses and other specified items that management believes are not indicative of our ongoing performance. Our Non-GAAP adjusted net earnings and adjusted EPS measures for fiscal year 2018 excluded: (i) Amortization of Acquired Intangibles and Purchased Intellectual Property, (ii) Acquisition and Integration Costs, (iii) Tax Act items, and (iv) the Gain on Sale of Securities. Our Non-GAAP adjusted net earnings and adjusted EPS measures for fiscal year 2017 excluded: (i) Amortization of Acquired Intangibles and Purchased Intellectual Property, (ii) Acquisition and Integration Costs, and (iii) the Message Automation Limited (“MAL”) investment gain.
|
|
|
•
|
Amortization of Acquired Intangibles and Purchased Intellectual Property represents non-cash amortization expenses associated with the Company's acquisition activities.
|
|
•
|
Acquisition and Integration Costs represent certain transaction and integration costs associated with the Company’s acquisition activities.
|
|
•
|
Tax Act items represent the net impact of a U.S. federal transition tax on earnings of certain foreign subsidiaries, foreign jurisdiction withholding taxes and certain benefits related to the remeasurement of the Company’s net U.S. federal and state deferred tax liabilities attributable to the U.S. Tax Cuts and Jobs Act, which was enacted into law on December 22, 2017.
|
|
•
|
Gain on Sale of Securities represents a non-operating gain on the sale of securities associated with the Company’s retirement plan obligations.
|
|
•
|
MAL investment gain represents a non-cash, nontaxable gain on investment from the Company’s acquisition of MAL in March 2017.
|
|
Please see “Explanation and Reconciliation of the Company’s Use of Non-GAAP Financial Measures” on pages 24 and 25 of the Annual Report to Stockholders accompanying this Proxy Statement, which can also be found on our website at www.broadridge.com, for more information on the use of these Non-GAAP financial measures and a reconciliation of these Non-GAAP measures to their most directly comparable GAAP measures.
|
|
Broadridge 2018 Proxy Statement 35
Executive Compensation
2018 Compensation Highlights
Our philosophy is to position the target compensation structure for our executive officers, in the aggregate, at the median of the external market. On an individual basis, target compensation for executive officers including our Named Executive Officers, is set above or below the median based on a variety of factors including time in position, sustained performance over time, readiness for promotion to a higher level, and skill set and experience relative to external market counterparts. Actual compensation varies above or below the target level based on the degree to which specific performance goals are attained in the variable incentive plans, changes in stock value over time, and the individual performance of each executive.
The performance metrics utilized in the Company’s short- and long-term incentive plans align with Broadridge’s operating plan. Strong engagement and leadership displayed by our Named Executive Officers drives clear line of sight to these metrics across the Company. Line of sight is the degree to which an employee can directly see how his or her contributions influence the performance measures being evaluated. We design our rewards and performance goals so executives see a common line of sight between their goals and the organization’s goals. We believe that aligning executives with Broadridge’s strategic goals is critical to attain strategic success.
As a direct result of this alignment, Broadridge demonstrated another year of solid growth in fiscal year 2018, which supported the payouts under the short- and long-term incentive plans. Fiscal year 2018 TDC for the Named Executive Officers reflects the Company’s strong overall performance in this fiscal year. The annual cash incentive payments for the Named Executive Officers were above their targets, as described below. In addition, performance-based RSU awards for the performance period ending with fiscal year 2018 were earned at 130% of their target amounts, reflecting Adjusted EPS performance in fiscal years 2017 and 2018 that exceeded our target performance goals.
In summary, the Compensation Committee concluded that fiscal year 2018 compensation was well aligned with the Company’s performance for the year and that the connection between pay and performance was strong.
Compensation Objectives and Fiscal Year 2018 Compensation Actions
A summary of the actions taken by the Compensation Committee during the year are set forth below.
|
Compensation Component
|
2018 Compensation Actions
|
|
|
Base Salary
|
•
|
Provided base salary increases for fiscal year 2018 to the Named Executive Officers, averaging three percent (3%).
|
|
Annual Cash Incentive Compensation
|
•
|
Annual cash incentive targets and performance targets were established early in the fiscal year.
|
|
•
|
Payments for the Named Executive Officers ranged from 125% to 136% of their targets based on achievement of financial, client satisfaction and strategic and leadership goals.
|
|
|
Long-Term Equity
Incentive Compensation |
•
|
Performance-based RSUs granted in October 2016 were earned at 130% of target, based on the average Adjusted EPS performance in fiscal years 2017 and 2018. These RSUs will vest in April 2019 subject to continued employment.
|
|
•
|
Performance-based RSUs were granted in October 2017. Achievement will be based on the average Adjusted EPS performance in fiscal years 2018 and 2019.
|
|
|
•
|
Stock options were granted in February 2018.
|
|
36 Broadridge 2018 Proxy Statement
Executive Compensation
Summary of Target Compensation for Named Executive Officers
A summary of the fiscal year 2018 target TDC of the Named Executive Officers as approved by the Compensation Committee is set forth in the table below. The compensation presented in this table differs from the compensation presented in the Summary Compensation Table, which can be found on page 54 of this Proxy Statement, and is not a substitute for such information. As required by SEC rules, the stock award and stock option columns in the Summary Compensation Table represent the grant date fair value of awards made during fiscal year 2018. The target equity values in the table below represent the target award amounts approved by the Compensation Committee.
|
|
Base Salary
|
Annual Cash Incentive
|
Annual Equity Incentive
|
|
||||||||||||||||||||
|
Name
|
Annual
Value |
Fixed Cash
as % of Target TDC |
Cash
Incentive Target as % of Salary |
Target Value
|
Cash
Incentive as % of Target TDC |
Target Value
|
Equity as
% of Target TDC |
Target TDC
|
||||||||||||||||
|
Mr. Daly
|
$
|
928,288
|
|
|
11%
|
|
|
165%
|
|
$
|
1,531,675
|
|
|
18%
|
|
$
|
6,000,000
|
|
|
71%
|
|
$
|
8,459,963
|
|
|
Mr. Young
|
$
|
562,754
|
|
|
21%
|
|
|
90%
|
|
$
|
506,479
|
|
|
19%
|
|
$
|
1,650,000
|
|
|
61%
|
|
$
|
2,719,233
|
|
|
Mr. Gokey
|
$
|
636,540
|
|
|
19%
|
|
|
130%
|
|
$
|
827,502
|
|
|
24%
|
|
$
|
1,950,000
|
|
|
57%
|
|
$
|
3,414,042
|
|
|
Mr. Perry
|
$
|
601,000
|
|
|
28%
|
|
|
140%
|
|
$
|
841,400
|
|
|
39%
|
|
$
|
700,000
|
|
|
33%
|
|
$
|
2,142,400
|
|
|
Mr. Schifellite
|
$
|
583,495
|
|
|
26%
|
|
|
115%
|
|
$
|
671,019
|
|
|
30%
|
|
$
|
1,000,000
|
|
|
44%
|
|
$
|
2,254,514
|
|
Executive Total Compensation Mix
A significant portion of the CEO’s and other Named Executive Officers’ target TDC is variable, performance-based compensation. This is intended to ensure that the executives who are most responsible for overall performance and changes in stockholder value are held most accountable for results.
Continuing Stockholder Support for our Compensation Programs
Each year, the Company provides stockholders with an opportunity to cast an advisory vote on the compensation of the Company’s Named Executive Officers. At the 2017 annual meeting of stockholders, stockholders continued their strong support of our executive compensation program with approximately 97% of the votes cast in favor of the proposal. Based on the outcome of the annual Say on Pay Vote, the Compensation Committee believes that the Company’s current executive compensation program is aligned with the interests of the Company’s stockholders. Accordingly, the Compensation Committee decided to retain the core elements and pay-for-performance design of our executive compensation program for fiscal year 2018.
Broadridge 2018 Proxy Statement 37
Executive Compensation
In addition, at the 2017 annual meeting of stockholders, the Company held a non-binding vote on the frequency of the Say on Pay Vote to approve the compensation of its Named Executive Officers as disclosed in the Proxy Statement. Currently, the Say on Pay Vote is included every year. At the 2017 annual meeting of stockholders, approximately 84% of the votes cast by stockholders were in favor of continuing to hold the Say on Pay Vote every year.
The Compensation Committee will continue to consider the outcome of the Company’s Say on Pay Votes and the views of our stockholders when making future compensation decisions for the Named Executive Officers.
Compensation Governance Policies and Practices
The Company has the following policies and practices in place in order to minimize excessive risk taking and meeting best practices in compensation governance:
|
Policy/Practice
|
Overview
|
|
Clawback Policy
|
Executive officer cash and equity incentive compensation is subject to reimbursement, if and to the extent that the payment, grant, or vesting was predicated upon the achievement of financial results that were subsequently the subject of a financial restatement due to material noncompliance with financial reporting requirements by the Company, and a lower payment, award, or vesting would have occurred based upon the restated financial results.
|
|
Double-trigger on Change in Control
|
Our Change in Control Severance Plan (the “CIC Plan”) has a “double-trigger,” which provides payments of cash and vesting of equity awards only upon termination of employment without “cause” or with “good reason” within three years following a change in control.
|
|
No Re-pricing or Discount Stock Options
|
We do not replace, cash out, or lower the exercise price of underwater stock options without stockholder approval. The exercise price of our stock options is not less than 100% of the fair market value of our common stock on the date of grant.
|
|
No Dividends or Dividend Equivalents on Unvested Equity Awards
|
Dividends or dividend equivalents are not earned or accrued by our equity awards until they vest and convert to shares of common stock.
|
|
Stock Ownership Guidelines and Retention and Holding Period Requirements
|
To encourage equity ownership among our executive officers, we maintain stock ownership guidelines based on a multiple of their salaries; the guidelines include stock retention and holding period provisions.
|
|
No Employment Agreements
|
Our Named Executive Officers do not have employment agreements and therefore are not entitled to minimum base salaries, guaranteed bonuses or guaranteed levels of equity or other incentives.
|
|
No Hedging or Pledging
of Stock |
Our executive officers, directors, and employees are prohibited from engaging in hedging and pledging activities or short sales with respect to Broadridge common stock.
|
|
No Excise Tax Gross-ups
|
We do not provide for excise tax gross-ups to executive officers in the event of a change in control of the Company.
|
|
Restrictive Covenant Agreements
|
We require that executives agree to be bound by a restrictive covenant agreement containing non-competition, non-solicitation and confidentiality provisions as a condition to receiving an equity grant or severance payments under the severance plan for executive officers (the “Officer Severance Plan”).
|
|
Independence of our Compensation Committee and Advisor
|
The Compensation Committee is comprised solely of independent directors and utilizes the services of an independent compensation consultant.
|
38 Broadridge 2018 Proxy Statement
Executive Compensation
Key Roles and Processes for Executive Compensation Decision-Making
Role of the Compensation Committee
The Compensation Committee has oversight of all compensation elements provided to Broadridge’s executive officers, including the Named Executive Officers.
The Compensation Committee plays a significant role in the evolution of Broadridge’s executive compensation strategies and policies in order to ensure that our executive compensation program supports our long-term business strategies and enhances our performance and return to stockholders while not creating undue risk. Among its duties, the Compensation Committee determines and approves the total compensation of our CEO and approves the compensation for the remainder of our executive officers after taking into account the CEO’s recommendations including:
| • | Review and approval of corporate incentive goals and objectives relevant to compensation; |
| • | Evaluation of the competitiveness of each executive officer’s total compensation package; and |
| • | Approval of any changes to the total compensation package, including, but not limited to, base salary, annual cash incentive and long-term equity incentive award opportunities. |
Role of the Independent Consultant
The Compensation Committee engages FW Cook as its independent compensation consultant to provide compensation market analysis and insight with respect to the compensation of our executive officers and directors. In addition, FW Cook gives the Compensation Committee advice regarding selection of the Peer Group companies (as defined below), market competitive compensation, executive compensation trends, the omnibus plan and share request, and governance and regulatory updates. FW Cook also provides ongoing assistance in the design and structure of the variable incentive plans, including the selection of performance metrics and the setting of performance goals.
The Compensation Committee annually reviews the independence of FW Cook and, in fiscal year 2018, concluded that FW Cook is independent and their work has not raised any conflicts of interest. FW Cook reports to the Compensation Committee, does not perform any other services for the Company, and has no economic or other ties to the Company or the management team that could compromise their independence or objectivity. Please see the “Corporate Governance” section on page 19 of this Proxy Statement for additional information about the role of FW Cook.
Role of Management
Our CEO makes recommendations to the Compensation Committee with respect to the base salaries, annual cash incentive awards and long-term incentive awards for executive officers, within the framework of the executive compensation program approved by the Compensation Committee and taking into account FW Cook’s review of market competitive compensation data on behalf of the Compensation Committee. These recommendations are based upon his assessment of each executive officer’s performance, the performance of the individual’s respective business or function, and retention considerations. The Compensation Committee considers the CEO’s recommendations in its sole discretion. Our CEO does not make recommendations with respect to his own compensation.
Broadridge 2018 Proxy Statement 39
Executive Compensation
Peer Group Selection and Market Data
Broadridge refers to a peer group in establishing executive officer target compensation. The list of companies determined to be Broadridge’s peers for executive officer compensation benchmarking purposes is reviewed annually by the Compensation Committee. Fiscal year 2018 target compensation was determined by the Committee in August 2017 taking into account the peer group established earlier in 2017 and set out below.
How the Peer Group was Chosen:
| • | Comparable businesses operating in similar industries |
| • | Within a reasonable range of revenue, market capitalization, operating income, total assets and number of employees compared to Broadridge, with revenue as the primary measure |
| • | Similar cost structures, business models, and compensation models |
| • | Similar level of global reach |
How we use the Peer Group:
| • | As a reference point to assess the competitiveness of base salary, incentive targets, and TDC awarded to the Named Executive Officers |
| • | As information on market practices in connection with compensation plan design, share utilization and share ownership guidelines |
| • | To compare Company performance and validate whether executive compensation programs are aligned with Company performance |
|
The Compensation Committee, with the assistance of its independent compensation consultant, FW Cook, determined that the following 16 companies are Broadridge’s peers for fiscal year 2018 compensation benchmarking purposes (the “Peer Group”):
|
|||
|
• Alliance Data Systems
Corp. • CA, Inc. • Convergys Corp. • CoreLogic, Inc. |
• DST Systems, Inc. • Dun & Bradstreet Corp. • Equifax Inc. • Euronet Worldwide Inc. |
• Fidelity National Information Services, Inc. • Fiserv Inc. • Global Payments Inc. • IHS Markit |
• Paychex Inc. • Total System Services Inc. • Vantiv, Inc. • Western Union Company |
The Compensation Committee made a number of changes to our Peer Group for use in fiscal year 2018 compensation benchmarking.
The following companies were removed:
| • | Jack Henry & Associates, based on revenue size |
| • | VeriFone Systems, based on business fit |
| • | Heartland Payment Systems Inc., which was acquired by Global Payments Inc. in 2016 |
The following companies were added as they are comparable in size and business to the Company:
| • | Fidelity National Information Services, Inc. |
| • | IHS Markit |
In addition, Vantiv, Inc. was acquired by Worldpay Group plc in January 2018 and the combined company is now named Worldpay, Inc., and DST Systems, Inc. was acquired by SS&C Technologies Holdings, Inc. in April 2018.
40 Broadridge 2018 Proxy Statement
Executive Compensation
At the time of the Committee’s compensation review, Broadridge was at the 68th percentile for revenue and the 41st percentile of the average of all measures compared with the Peer Group (revenue, market capitalization, operating income, total assets, and total employees).
Peer Group data is considered a primary source of information for the determination of both market practices and market compensation levels for the Named Executive Officers. As there is limited data on positions other than the CEO and CFO in the Peer Group data, the Compensation Committee also reviews data from three national survey sources related to general industry and technology companies, size-adjusted for Broadridge’s total revenues, or in the case of the role of Mr. Schifellite, size-adjusted for the total revenues of the business he manages, when it considers the market competitiveness of Named Executive Officer compensation levels and/or market practices. The survey providers utilized are Willis Towers Watson, Aon Hewitt and Aon Radford. The Committee does not review the specific companies included in these surveys and the data presented to the Compensation Committee is general and not specific to any particular subset of companies.
CEO Evaluation Process
The Board of Directors evaluates the performance of the CEO annually. For fiscal year 2018, the Board’s evaluation of Mr. Daly’s performance took into account a CEO scorecard. The CEO scorecard assessed financial and operational business performance against pre-determined objectives in four categories: financial goals, operational excellence goals, human capital goals, and client goals. For more information on the fiscal year 2018 goals, please see the section entitled “Corporate Officer Bonus Plan—Strategic and Leadership Goals” beginning on page 44.
The Board of Directors concluded that Mr. Daly exceeded its overall expectations based on his leadership of the Company and in driving strong operational and financial performance. The Compensation Committee considered the Board of Directors’ evaluation of Mr. Daly’s performance when determining his fiscal year 2018 cash incentive achievement and his fiscal year 2019 base salary and incentive compensation targets.
The Board of Directors also used the CEO scorecard to communicate the key performance and strategic and leadership goals that it wants Mr. Daly to pursue in the upcoming fiscal year.
Elements of Executive Compensation
The Compensation Committee reviews the base salaries of the Named Executive Officers in the first quarter of the Company’s fiscal year. In fiscal year 2018, the Compensation Committee approved base salary increases, effective September 1, 2017.
|
Name
|
Fiscal Year
2017 Base Salary |
Increase
|
Fiscal Year
2018 Base Salary |
||||||
|
Richard J. Daly
|
$
|
901,250
|
|
|
3.0%
|
|
$
|
928,288
|
|
|
James M. Young
|
$
|
546,364
|
|
|
3.0%
|
|
$
|
562,754
|
|
|
Timothy C. Gokey
|
$
|
618,000
|
|
|
3.0%
|
|
$
|
636,540
|
|
|
Christopher J. Perry
|
$
|
583,495
|
|
|
3.0%
|
|
$
|
601,000
|
|
|
Robert Schifellite
|
$
|
566,500
|
|
|
3.0%
|
|
$
|
583,495
|
|
Broadridge provides both annual and long-term performance-based compensation to all of its executive officers, including those who are Named Executive Officers. These plans operate within the 2007 Omnibus Award Plan. The following discussion contains information regarding certain performance measures and goals. These measures and goals are disclosed in the limited context of our executive compensation program and are defined in the “Explanation of Compensation Adjusted Non-GAAP Financial Measures” section on page 52. Investors should not apply these measures and goals to other contexts.
Broadridge 2018 Proxy Statement 41
Executive Compensation
Annual Cash Incentive Compensation
The annual cash incentive compensation program was created to align Named Executive Officers’ compensation with annual financial performance. The process by which the annual cash incentive compensation is determined is set forth below:
|
|
What
|
Timing
|
Description
|
2018 Result
|
|
|
Step 1
|
Set target bonuses
|
Early in the fiscal year
|
Target bonus is a percentage of salary
|
NEO target bonus percentages unchanged from 2017 for all NEOs, except Mr. Young. See page 37 for targets.
|
|
|
Step 2
|
Establish performance funding target
|
Early in the fiscal year
|
Adjusted Net Earnings goal approved by the Compensation Committee.(1)
|
If achieved, officer bonus pool is funded at 200% of target. See “Corporate Officer Bonus Plan — 2018 Performance Funding Target” below.
|
|
|
Threshold achievement required for annual bonus payout
|
|||||
|
Step 3
|
Establish performance goals
|
Early in the fiscal year
|
Financial goals are aligned to fiscal year operating plan and reviewed and approved by the Compensation Committee.(1)
|
See “Corporate Officer Bonus Plan — 2018 Performance Metrics — Financial Goals” on page 43.
|
|
|
•
|
Corporate financial goals for all NEOs
|
||||
|
•
|
Divisional financial goals for divisional officers
|
||||
|
•
|
Client Satisfaction goals for all NEOs
|
||||
|
•
|
Strategic and Leadership goals that vary by NEO
|
||||
|
Step 4
|
Calculate threshold performance funding achievement (Adjusted Net Earnings)
|
After the fiscal year end
|
Formulaic, based on the pre-set goals. Reviewed and approved by the Compensation Committee.(1)
|
Adjusted Net Earnings goal was achieved.
|
|
|
Step 5
|
Calculate financial and client satisfaction achievement
|
After the fiscal year end
|
Formulaic, based on the pre-set goals. Reviewed and approved by the Compensation Committee.(1)
|
||
|
Step 6
|
Assess the strategic and leadership performance
|
After the fiscal year end
|
Compensation Committee reviews and approves for all NEOs with input from CEO for other NEOs.
|
See “Corporate Officer Bonus Plan — Strategic and Leadership Goals” on page 44.
|
|
| (1) | For information on how these metrics are calculated, see “Explanation of Compensation Adjusted Non-GAAP Financial Measures” on page 52. |
Corporate Officer Bonus Plan – 2018 Performance Funding Target
For the annual cash incentive awards, the Compensation Committee established that no amount would be payable to the Company’s officers for fiscal year 2018 unless the Company’s fiscal year 2018 Adjusted Net Earnings were at least $248.8 million. Broadridge’s Adjusted Net Earnings for fiscal year 2018 were $431.8 million and, therefore, exceeded the threshold required in order to pay cash incentive awards under this plan. For the definition of Adjusted Net Earnings and for information on how it is calculated for compensation purposes, see “Explanation of Compensation Adjusted Non-GAAP Financial Measures” on page 52.
42 Broadridge 2018 Proxy Statement
Executive Compensation
Achievement of the performance threshold goal establishes a maximum award amount that each executive officer is eligible to receive, equal to 200% of their target amount set forth below, subject to the compensation limits in the 2007 Omnibus Award Plan. However, the actual cash incentive award payable is determined by the Compensation Committee based on the scoring of the financial, client satisfaction, and strategic and leadership goals established for each officer as described below, limited to the maximum award amount.
Corporate Officer Bonus Plan – 2018 Performance Metrics
For fiscal year 2018, the Compensation Committee determined that the annual cash incentive awards for the Named Executive Officers be calculated as follows:
Corporate Officer Bonus Plan – 2018 Performance Metrics – Financial Goals
The Compensation Committee considers the achievement of financial goals to be the most relevant measure of the Company’s overall business performance for the year; therefore, the financial goals are the most heavily weighted factors. The Compensation Committee determined that the financial goals below are aligned with the Company’s long-term growth and profitability objectives.
The Compensation Committee establishes threshold, target and maximum performance levels for each financial goal. Each level represents a different performance expectation considering factors such as the Company’s prior year performance and the Company’s operating plan growth goals.
The corporate financial goals used to score the annual cash incentives of the Named Executive Officers are set forth below.
Broadridge 2018 Proxy Statement 43
Executive Compensation
In addition to the corporate financial goals, Mr. Schifellite’s corporate officer bonus plan includes Adjusted EBT, Closed Sales and Fee-Based Revenue goals based on the performance our Investor Communication Solutions segment excluding the customer communication solutions business (“Investor Communications division”). The corporate financial goals and those of the Investor Communications division are given equal weight in the determination of his cash incentive award.
The Company has not disclosed the targets and ranges pertaining to the Investor Communications division because this information is not otherwise publicly disclosed by the Company, and the Company believes it would cause competitive harm to do so in this Proxy Statement. The financial goals were set above last year’s achievement and the outcome was substantially uncertain at the time the goals were set. Achievement of Mr. Schifellite’s divisional goals ranged from 105% to 156% of target performance in fiscal year 2018, 93% to 114% of target performance in fiscal year 2017, and 98% to 103% of target performance in fiscal year 2016. For fiscal year 2018, the weighted-average score of the Investor Communications division financial goals was 143%.
Mr. Perry’s corporate officer bonus plan has two components, each with a target of 70% of his base salary:
| • | Corporate Goals Component, which is comprised of the corporate financial goals described above, as well as client satisfaction and strategic and leadership results. This component is scored in the same manner as the annual cash incentive awards of the other corporate Named Executive Officers (i.e., Messrs. Daly, Young and Gokey). |
| • | Sales Incentive Component, which is scored based on Broadridge’s Closed Sales achievement. |
Corporate Officer Bonus Plan – Client Satisfaction Goal
Broadridge conducts a client satisfaction survey for each of its major business units annually. Each year, threshold, target and stretch goals are established, with target and stretch award levels based on exceeding the prior year’s performance. The results of the client satisfaction survey are included as a component of the Corporate Officer Bonus Plan because of the importance of client retention to the achievement of Broadridge’s revenue goals.
For the Named Executive Officers, other than Mr. Schifellite, client satisfaction is the weighted-average achievement against pre-set targets in Broadridge’s client satisfaction survey of the Investor Communication Solutions and Global Technology and Operations business segments. The score for Mr. Schifellite is based solely on the performance of the Investor Communications division. The percentage earned by Mr. Schifellite was 200% of target, and the percentage earned by the other Named Executive Officers was 127% of target.
Corporate Officer Bonus Plan – Strategic and Leadership Goals
Strategic and leadership achievement is included as a component of each Named Executive Officer’s bonus in order to reinforce the importance of the Company’s non-financial strategic objectives. The amounts payable on this component are determined based on the Compensation Committee’s evaluation of the Named Executive Officer’s strategic and leadership performance.