This Compensation Discussion and Analysis describes the compensation program for our principal executive officer, our principal financial officer, the
three most highly-compensated executive officers of the Company (other than our principal executive officer and principal financial officer) during fiscal 2018, and one additional individual for whom disclosure would have been provided but for the
fact that the individual was not serving as an executive officer of the Company at the end of the last completed fiscal year (the Named Executive Officers or NEOs).
In September 2017, Mr. May ceased serving as the President and General Manager of our Connectivity Division and was appointed as our Chief Growth Officer (a
non-executive
position), and Mr. Arra and Ms. Gupta were appointed as
Co-Presidents
and General Managers of our Connectivity Division. Effective April 13, 2018,
Mr. May resigned from his position as our Chief Growth Officer and agreed to continue to work with us as a consultant through October 2018. For a discussion of Mr. Mays consulting agreement and the effect of his resignation on his
awards, please see Description of S. Travis May Consulting Agreement in Potential Payments Upon Termination or Change in Control herein.
We are a global technology and services
company that provides the data foundation and connections for the worlds best marketers. To support our ongoing transformation and growth, we have designed our executive compensation program to ensure a strong link between our financial and
operational performance and the incentives we use to motivate and reward our executive officers. As we have reshaped our business in recent years to meet the challenges of evolving market dynamics and customer expectations, we have been proactive in
designing our executive officers compensation packages to support our key business objectives and provide a strong connection between pay and performance:
Business Overview
We provide the data foundation and connections for the worlds best marketers. In fiscal 2018, we were organized into three segments, all driving a common vision to
transform data into value for everyone.
8
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Connectivity (or LiveRamp)
Fiscal 2018 Rev (Y/Y change):
$211MM
(+43%)
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Audience
Solutions
Fiscal 2018 Rev (Y/Y change):
$327MM (+8%)
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Marketing Services
Fiscal 2018 Rev
(Y/Y change):
$379MM
(-8%
or
-3%
adjusted
for
divestitures
1
)
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We help clients build a multi-channel view of their customers and prospects and activate this view across
channels through partnerships with leading digital marketing platforms
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We validate the accuracy of client data and enhance it with additional insight from third party sources, enabling clients to reach desired audiences with highly
relevant messages
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We help clients unify customer and prospect data across their enterprise at the individual level and assist them in executing and measuring
the effectiveness of multichannel campaigns
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Illustrative Client Uses of our Products
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LiveRamp
®
IdentityLink
allows client to onboard offline prospect data, add third party information and target prospects who indicate a desire to purchase a car.
The
IdentityLink Data
Store
provides client with ability to monetize third-party location data.
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AbiliTec
®
ties multiple data
elements back to a persistent identifier that represents a unique consumer.
Infobase
®
can create a
specific customer segment (e.g., high income, multi-child families) despite only knowing name and address.
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Marketing Services helps clients unify and organize customer data across multiple IT systems in a Market
Data environment, and identify opportunities to cross-sell new products to their existing customer base.
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1
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Fiscal 2017 Marketing Services revenue was $411M and included $20M of revenue from divested Acxiom Impact business.
|
On our fiscal 2018 third quarter conference call, we announced plans to reorganize our portfolio into two strong business units, LiveRamp and
Acxiom Marketing Solutions, aligning key Audience Solutions assets to each. All identity assets including IdentityLink, AbiliTec
®
intellectual property and Acxioms TV
integrations were consolidated in LiveRamp. The remaining Audience Solutions lines of business for data and data services were combined with Marketing Services, comprised of experts for turning customer insights into engaging experiences that
drive tangible business outcomes.
The new organizational structure went into effect on April 1, 2018, and we began reporting our fiscal 2019 results under the
realigned business segments.
Potential Sale of Acxiom Marketing Solutions
On July 2, 2018, subsequent to the end of the fiscal year, we announced that we have entered into a definitive agreement to sell Acxiom Marketing Solutions for
$2.3 billion to Interpublic Group. This transaction generally had no impact on our fiscal 2018 compensation as described in this CD&A. However, as discussed herein, we did approve a discretionary incentive plan relating to such sale. We
also certified the treatment under certain compensation plans and equity incentive awards that might apply in the event of a potential sale. In anticipation of the close of the Acxiom Marketing Solutions sale and the substantial changes to our
business, we are considering changes to the contractual arrangements with and equity programs made available to our
go-forward
leadership team and key talent.
Fiscal 2018 Business Highlights
Since our founding in 1969, our mission has
focused on the safe and easy use of people-based information to deliver better consumer experiences. While our mission has remained steadfast, over the past four years we have been strategically driving our business to focus and organize around
solutions that provide the critical data foundation marketers need to engage consumers in a digital world. This transformation has led to improving trends, through leadership, innovation and strong financial performance. Key business highlights for
fiscal 2018 include:
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Scaling our leadership in identity resolution and data connectivity, growing direct LiveRamp customers year-over-year by
nearly 40% and adding hundreds of new partners to our ecosystem.
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9
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Stabilizing and improving
top-line
performance and profitability in our Marketing
Services division. Marketing Services had its largest new bookings year in over a decade, adding over 20 new database logos to its growing client roster.
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Creating value through mergers and acquisitions, highlighted by the
tuck-in
acquisition of Pacific Data Partners in February 2018 to accelerate our
business-to-business
(B2B) efforts within LiveRamp.
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Innovating across our portfolio and delivering new products and capabilities to our customers. During the year, we scaled
our IdentityLink Data Store offering and launched LiveRamp TV and LiveRamp B2B. We also made our next generation database solution more widely available to our clients.
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Returning value to our stockholders, by repurchasing approximately $89 million of our common stock during the year. In
addition, in April 2018, we expanded our share repurchase program by $100 million to $500 million and extended the duration of the program through December 31, 2019. Since inception of the share repurchase program in August 2011
through March 31, 2018, Acxiom has returned approximately $375 million to stockholders.
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Fiscal 2018 Financial Highlights
With a focus on continued execution and growth, our fiscal 2018 performance again delivered strong financial results for our stockholders, including:
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Fiscal year TSR of 9.2%, compared to 11.94% for the S&P Midcap 400 Index.
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Revenue of $917 million, up 4.2% on a reported basis. Revenue was negatively impacted by the Acxiom Impact
divestiture, which reduced revenue by approximately $20 million year-over-year. Revenue excluding $20 million from Acxiom Impact in fiscal 2017 was up 7% in fiscal 2018.
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GAAP diluted EPS was $0.29, up from $0.05 in fiscal 2017.
Non-GAAP
diluted EPS was
$0.94, up from $0.71 in fiscal 2017.
1
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GAAP net earnings were $23 million.
Non-GAAP
net earnings were
$76 million, up 34% from 2017.
1
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Continued strong growth in our Connectivity (or LiveRamp) Division, with revenue up 43% year-over-year to approximately
$211 million and segment income improving significantly to $18.4 million. Segment operating margin was 9% in fiscal 2018, and in the US, was 15%.
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1
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See Schedule 1
on pages 37 to 38 of this Compensation Discussion and Analysis for a reconciliation of our GAAP EPS
to
Non-GAAP
EPS and GAAP net earnings to
Non-GAAP
net earnings.
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Executive Compensation Highlights
Consistent with our
pay-for-performance
philosophy and objective of rewarding our executive officers only when they deliver sustained value for our stockholders, our key compensation
decisions and outcomes for fiscal 2018 were as follows:
Base salary
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Annual Executive Compensation Review
In June 2017, the annual base salaries of our then-executive officers
were increased in amounts ranging from 1.9% to 6.7%, including an increase in the annual base salary of our CEO of 3.1% from fiscal 2017.
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Promotional Base Salary Increases
In connection with their promotion to
Co-Presidents
and General Managers of our Connectivity Division in September 2017, the annual base salaries of Mr. Arra and Ms. Gupta were increased from $275,000 to $400,000.
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10
Annual cash incentives
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Design
In June 2017, as previously disclosed, in response to stockholder feedback, the Compensation Committee
selected adjusted revenue and adjusted
earnings before interest, other income and taxes (EBIT) as the corporate performance measures for the Fiscal 2018 Cash Incentive Plan (the Fiscal 2018 CIP).
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Annual Cash Incentive Payments
The annual cash incentive payments made to our executive officers under the
Fiscal 2018 CIP ranged from $37,800
to
$597,000, including a payment in the amount of $597,000 to our CEO.
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Long-term equity
incentives
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Fiscal 2018 Award Mix
In June 2017, our then-executive officers were granted long-term incentive
opportunities in the form of equity awards, consisting of PSU awards and restricted stock unit (RSU) awards, which vest or are earned over multi-year periods, including an equity award with a grant date fair value of approximately
$4,022,000
granted to our CEO.
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Fiscal 2018 PSU Award Design
The fiscal 2018 PSU awards are payable in shares of our common stock at the end
of a three-year performance period based on our relative TSR performance compared to the S&P Midcap 400 Index over the three-year performance period. 60
th
percentile performance is required
for the target number of shares to vest. .
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Fiscal 2016 PSU Award Outcome
The PSU awards granted in fiscal 2016 were paid out at 200%
of their
target number of shares as a result of exceeding the maximum three-year adjusted EPS target.
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LiveRamp PSU Award Outcome
The first tranche of the PSU awards granted to Messrs. May and Arra and
Ms. Gupta on June 28, 2017 was paid out at 53.27% of their target number of shares of our common stock on June 14, 2018.
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Section 2: Executive Compensation Philosophy and Program Design
We believe in paying for performance. Our objective is to attract, motivate, reward, and retain our executive officers in a manner that is transparent, market
competitive, and aligned with the interests of our stockholders by putting the executives compensation at risk, providing rewards only when our performance warrants, and helping us to deliver for our customers.
Our compensation objectives support our strategic priorities. They are to:
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align our executive compensation program with diverse business divisions and ongoing business transformation and
incentivize execution of key management initiatives;
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align our executive officers interests with those of our stockholders and consider stockholder feedback when making
compensation decisions;
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maintain transparent compensation arrangements that provide a strong link between pay and performance and motivate our
executive officers to achieve the highest level of performance; and
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attract and retain the best executive officers through competitive, market-based compensation programs.
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We believe these objectives enable us to reward the overall performance and contributions of our executive officers while maintaining an
appropriate correlation between executive compensation levels and our performance, including the execution of our business strategy. The following discussion explains how our executive compensation program achieves these objectives.
11
Compensation Program Framework
The Compensation Committee carefully developed the framework reflected in the following chart to achieve these objectives in our fiscal 2018 executive compensation
program:
These compensation elements are allocated so that the majority of each executive officers annual target total direct
compensation opportunity is at risk and/or subject to performance-based vesting requirements. While the pay mix may vary from year to year, the ultimate goal is to achieve our compensation objectives as described above.
Results of 2017 Stockholder Advisory Votes on Named Executive Officer Compensation
Each year at the annual meeting of stockholders, we present stockholders with a
non-binding,
advisory vote to approve the
compensation of our Named Executive Officers (commonly known as a
Say-on-Pay
vote). The Compensation Committee and our Board of Directors consider the
results of our annual
Say-on-Pay
votes in determining our subsequent compensation policies and decisions and engage with our stockholders to get feedback on our
compensation program decision. At our 2017 Annual Meeting of Stockholders, approximately 94.7% of the votes cast
on the
Say-on-Pay
votes were voted in favor of
the proposal.
At our 2017 Annual Meeting of Stockholders, stockholders were also asked to cast a
non-binding,
advisory vote
on the frequency with which we should hold
Say-on-Pay
votes. With regard to this vote, our stockholders cast the highest number of votes for an annual
Say-on-Pay
vote. As a result of this vote, our Board of Directors determined that we will continue to hold annual
Say-on-Pay
votes. The next vote on the frequency of
Say-on-Pay
votes will be held at our 2023 Annual Meeting of Stockholders.
Stockholder Engagement on Executive Compensation
Our stockholders
opinions on how we operate our business are very important to us. During fiscal 2018, we continued our engagement efforts with our stockholders. Feedback from this engagement was considered by the Compensation Committee as it made its decisions to
change our executive compensation program in 2018. For example, in response to feedback received from several stockholders, we amended the performance measures in our annual cash incentive design to include EBIT instead of EPS to ensure our
executive officers interest are aligned with those of our stockholders.
12
When making future compensation decisions for our executive officers, the Compensation Committee will continue to consider
the outcome of our
say-on-pay
votes and feedback from our stockholders.
Changes
to our Fiscal 2018 Executive Compensation Program
As part of its annual review of our executive compensation program, the Compensation Committee continued to
make changes to our executive compensation program based on the feedback that we received from our stockholder engagement efforts. Specifically, for fiscal 2018, as previously disclosed, the Compensation Committee changed the design of our annual
incentive compensation plan, the Amended and Restated 2010 Executive Cash Incentive Plan of Acxiom Corporation (the Cash Incentive Plan), to replace EPS with EBIT as one of the two corporate performance measures used in the plan. This
change became effective on April 1, 2017 with the approval of the Fiscal 2018 CIP.
Pay-for-Performance
Discussion
Our compensation policies and practices are designed to support our goals, our values and standards of conduct, and our
pay-for-performance
philosophy. They are a means to reward our executive officers, in alignment with our peers, including the Named Executive Officers, for their achievements.
To ensure our executive officers interests are aligned with those of our stockholders and to motivate and reward individual initiative and effort, a substantial
portion of our executive officers annual target total direct compensation opportunity is
at-risk
and will vary above or below target levels commensurate with our performance. We emphasize
performance-based compensation that appropriately rewards our executive officers for delivering financial, operational, and strategic results that meet or exceed
pre-established
goals through our annual cash
incentive opportunities and the PSU awards that make up a significant portion of our long-term incentive compensation opportunities.
In addition, we further align
the interests of our executive officers with those of our stockholders through our stock ownership guidelines and grants of RSU awards as part of our long-term incentive compensation opportunities. The target total direct compensation opportunities
for our CEO and, on average, the other Named Executive Officers during fiscal 2018 reflect this philosophy:
13
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1
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The percentages reflected in the foregoing charts are based on the annual target total direct compensation opportunities
of the Named Executive Officers (the sum of base salary, the target annual cash incentive opportunity and long-term incentives, which are valued at their grant date fair value). The actual payouts may differ from the incentive opportunities
provided. Other forms of compensation reported in the Summary Compensation Table are not included.
|
As reflected in the foregoing charts, we
believe that equity awards are a key incentive for our executive officers to drive long-term growth. To ensure that we continue to align to our compensation philosophy, the Compensation Committee regularly evaluates the relationship between the
reported values of the equity awards granted to our executive officers, the amount of compensation realizable (and, ultimately, realized) from such awards in subsequent years, and our TSR over this period.
While we disclose the estimated values of these equity awards in our Summary Compensation Table at the time of grant for each covered fiscal year, the value of these
awards that may be realizable by our executive officers will vary depending on the performance of our common stock and often differs significantly from the amounts reported in the Summary Compensation Table.
We believe our executive compensation program is reasonable, competitive, and appropriately balances the goals of attracting, motivating, rewarding, and retaining our
executive officers, and, therefore, that it promotes stability in our leadership. Importantly, we also believe it is very stockholder friendly.
14
Executive Compensation Policies and Practices
We endeavor to maintain sound executive compensation policies and practices, including compensation-related corporate governance standards, consistent with our executive
compensation philosophy. During fiscal 2018, we maintained the following executive compensation policies and practices, including both policies and practices we have implemented to drive performance and policies and practices that either prohibit or
discourage behaviors that we do not believe serve our stockholders long-term interests:
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What We Do
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What We Dont Do
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✓
Use a
pay-for-performance
philosophy that links our executive officers compensation to corporate and individual performance
✓
Conduct an annual executive compensation
review
✓
Place a significant portion of compensation
at-risk
✓
Retain an independent compensation
advisor
✓
Maintain an independent compensation committee
✓
Conduct an annual compensation-related
risk assessment
✓
Grant performance-based equity awards
✓
Maintain a compensation recovery
(claw back) policy
✓
Maintain double-trigger
change-in-control
arrangements
✓
Maintain stock ownership
guidelines
✓
Conduct an annual stockholder advisory vote on named executive officer compensation as well as engage in regular dialogue with our stockholders on corporate governance
matters
✓
Conduct annual succession planning
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× Provide special health, welfare or qualified retirement plan benefits not available to all
employees
× Permit hedging of
our equity securities
× Permit pledging of our equity securities
× Provide excise tax payments on
future post-employment compensation arrangements
× Pay dividends or dividend equivalents on unvested equity awards
× Permit stock option
repricing
× Provide
guaranteed bonuses
× Provide
single trigger
change-in-control
arrangements
|
Section 3: Governance of Executive Compensation Program
Role of the Compensation Committee
The Compensation Committee discharges the
responsibilities of our Board of Directors relating to the compensation of our executive officers.
The Compensation Committee has overall responsibility for overseeing the design, development, and implementation of our executive compensation
program and all related policies and practices.
15
During fiscal 2018, the Compensation Committee:
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reviewed and approved the compensation of our executive officers, other than our CEO;
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reviewed and approved the compensation of our CEO that was intended to comply with the exemption for qualified
performance-based compensation under Section 162(m) of the Internal Revenue Code (the Code), in consultation with our Board of Directors; and
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made a recommendation to our Board of Directors for approval of our CEOs other compensation.
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In carrying out its responsibilities, the Compensation Committee establishes the amounts and allocates the mix of compensation between base salary, annual cash
incentives, and long-term incentive compensation. The Compensation Committee also oversees our incentive and equity-based executive compensation plans and establishes performance targets for performance-based awards. Periodically, the Compensation
Committee reviews our post-employment compensation arrangements, retirement benefits and nonqualified deferred compensation program, senior leadership benefits, and perquisites. The Compensation Committee also reviews and considers risks associated
with our compensation philosophy and executive compensation program as discussed under Compensation Risk Assessment elsewhere in this Form
10-K/A.
The Compensation Committee does not establish a specific target for setting the annual target total direct compensation opportunity of our executive officers, including
our Named Executive Officers. When evaluating and setting the amount of each compensation element, the Compensation Committee considers the following factors:
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our performance against the financial and operational objectives established by the Compensation Committee and our Board of
Directors;
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each individual executive officers responsibilities, qualifications, and length of service;
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the scope of each executive officers role compared to other similarly-situated executives at companies in our
compensation peer group;
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the performance of each individual executive officer, based on a subjective assessment of his or her contributions to our
overall performance, ability to lead his or her business unit or function, and work as part of a team, all of which reflect our core values;
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compensation parity among our executive officers; and
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the compensation practices of our compensation peer group and the positioning of each executive officers compensation
in a ranking of peer company compensation levels.
|
These factors provide the framework for compensation decision-making and final decisions
regarding the compensation opportunity for each executive officer. No single factor is determinative in setting pay levels, nor was the impact of any factor on the determination of pay levels quantifiable. As an executive officers
responsibilities and ability to affect our financial results increase, base salary becomes a smaller element of his or her target total direct compensation opportunity and long-term incentive compensation becomes a larger element, further aligning
his or her interests with those of our stockholders.
Role of Management
In discharging its responsibilities, the Compensation Committee works with members of our management, including our CEO. Our management assists the Compensation
Committee by providing information on corporate and individual performance, competitive market data, and managements perspective and recommendations on compensation matters. The Compensation Committee solicits and reviews our CEOs
recommendations and proposals with respect to adjustments to target total annual cash compensation, long-term incentive
16
compensation opportunities, program structures, and other compensation-related matters for our executive officers (other than with respect to his own compensation). The Compensation Committee
reviews and discusses these recommendations and proposals with our CEO and uses them as one factor in determining and approving the compensation for our other executive officers. Our CEO recuses himself from all Compensation Committee discussions
and recommendations regarding the setting of his own compensation.
Role of Compensation Advisors
As permitted in its charter, the Compensation Committee engages an external compensation consultant to assist it by providing information, analysis, and other advice
relating to our executive compensation program and the decisions resulting from its annual executive compensation review. It directly engages the compensation consultant under an engagement letter that the Compensation Committee reviews at least
annually.
The Compensation Committee has retained Compensia, a national compensation consulting firm, to serve as its compensation consultant. The compensation
consultant reports directly, and is directly accountable, to the Compensation Committee, and the Compensation Committee has the sole authority to retain, terminate, and obtain the advice of its compensation consultant at our expense.
The Compensation Committee selected Compensia as its compensation consultant because of the firms expertise and reputation and the fact that it provides no
services to us other than its services to the Compensation Committee, has no other ties to management that could jeopardize its independent status, and has strong internal governance policies that help ensure that it maintains its independence.
Accordingly, the Compensation Committee has determined that the work of Compensia does not give rise to any conflict of interest.
During fiscal 2018, the
compensation consultant regularly attended the meetings of the Compensation Committee (both with and without management present). Services provided by the compensation consultant included: providing competitive market data, analyzing base salary
levels and incentive compensation opportunities, providing trends within the industry, and assessing compensation risk.
The Compensation Committee also engaged
Bryan Cave Leighton Paisner, LLP (Bryan Cave) as independent legal counsel to assist with its review and analysis of our executive compensation program in light of current market, business, economic and regulatory conditions.
In fiscal 2018, neither Compensia nor Bryan Cave provided any other services to us other than the consulting services to the Compensation Committee. The Compensation
Committee annually reviews the objectivity and independence of its compensation advisors.
Process for Determining CEO Compensation
Each year, our Board of Directors evaluates our CEOs performance relative to our strategic plan, operating goals, and key performance indicators relating to
executive compensation. Our executive compensation objectives include maintaining competitive pay, linking pay to performance, promoting the creation of stockholder value, and encouraging retention. The Compensation Committee considers the results
of this evaluation. In consultation with its compensation consultant, the Compensation Committee also considers general market conditions and specific industry trends. The Compensation Committee reviews each element of our CEOs compensation,
his employment agreement, and a tally sheet to evaluate his target total direct compensation opportunity, and assists our Board of Directors in assessing our CEOs total compensation. The Compensation Committee also considers our business
results, the tax deductibility of our CEOs compensation, and the other factors described above. In fiscal 2018, the recommendations from the Compensation Committee were submitted to our Board of Directors for approval, other than elements of
compensation intended to comply with Section 162(m) which were determined exclusively by the Compensation Committee. Our CEO does not participate in decisions regarding his own compensation.
Process for Determining Compensation of Other Executive Officers
Each year,
our CEO evaluates the performance of each of our other executive officers, including the other Named Executive Officers. Our CEO makes a recommendation for the compensation of each executive officer to the Compensation Committee based upon his
evaluation and information supplied by the Compensation Committees compensation consultant. The Compensation Committee considers our CEOs recommendation relative to our
17
strategic plan, operating goals, and compensation philosophy. In consultation with its compensation consultant, the Compensation Committee also considers general market conditions and specific
industry trends. The Compensation Committee also reviews tally sheets with respect to each executive officer, our business results, and tax deductibility considerations.
Competitive Positioning
For purposes of comparing our executive compensation
against the competitive market, the Compensation Committee reviews and considers the compensation levels and practices of a group of comparable technology companies. In February 2017, with the assistance of its compensation consultant, the
Compensation Committee
re-examined
the then-existing compensation peer group to reflect the changes in our revenue and market capitalization, to recognize our evolving business focus and divisional structure,
and to account for changes in the competitive market. Based on this effort, in February 2017 the Compensation Committee approved a revised compensation peer group consisting of the following companies for use in fiscal 2018:
The companies in this revised compensation peer group were selected on the basis of their similarity to us in size, as determined
using the following criteria:
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similar revenue size ~0.5x to ~2.0x our last four fiscal 2017 quarter revenue (~$248 million to ~$1.86
billion);
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similar market capitalization ~0.3x to ~3.0x our market capitalization (~$560 million to ~$5.6 billion);
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industry affiliation application software, internet software and services, advertising, data processing and
outsourced services, research and consulting services, and IT consulting and other services; and
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similar business focus SaaS, marketing service provider/consultant, and data services.
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18
To analyze the compensation practices of the companies in our compensation peer group, the compensation consultant gathered
data from public filings (primarily proxy statements) and from the appropriate Radford executive compensation surveys. This market data was then used as a reference point for the Compensation Committee to assess our current compensation levels in
the course of its deliberations on compensation forms and amounts.
While the Compensation Committee reviews each compensation element and target total direct
compensation for each of our executive officers compared to similarly-situated executives of the companies in the compensation peer group, it does not target overall compensation to a specific percentile of the competitive market data. In
determining actual pay levels, the Compensation Committee considers data from the compensation peer group, as well as the other factors described above, in its collective judgment.
The Compensation Committee reviews our compensation peer group at least annually and makes adjustments to its composition, taking into account changes in both our
business and the businesses of the companies in the peer group.
Section 4: Individual Compensation Elements
The specific elements of our fiscal 2018 executive compensation program for our executive officers, including the Named Executive Officers, were as follows:
In addition, we provide our executive officers with welfare and health benefits programs, a
non-qualified
deferred compensation program, post-employment compensation arrangements, and limited perquisites and other personal benefits.
Base Salary
Base salary represents the fixed portion of the compensation of
our executive officers, including the Named Executive Officers, and is an important element of compensation intended to attract and retain highly talented individuals.
Generally, we establish the initial base salaries of our executive officers through
arms-length
negotiation at the time we
hire the individual executive officer, taking into account his or her position, qualifications, experience, prior salary level, and the base salaries of our other executive officers. Thereafter, the Compensation Committee reviews the base salaries
of our executive officers as part of its annual compensation review and makes adjustments to base salaries as it determines to be necessary or appropriate.
In June
2017, the Compensation Committee reviewed the base salaries of our then executive officers, including the Named Executive Officers, taking into consideration a competitive market analysis prepared by its compensation consultant, the recommendations
of our CEO (except with respect to his own base salary), and the other factors described in Governance of Executive Compensation Program Role of the Compensation Committee above. Following this review, the Compensation Committee
decided to increase the base salaries for each of our then-executive officers (other than our CEO) in amounts ranging from 1.9% to 6.7% of their fiscal 2017 base salaries. In addition, the Compensation Committee recommended, and our Board of
Directors approved, an increase in the base salary of our CEO.
19
Based on the foregoing, the base salaries of the then-Named Executive Officers for fiscal 2018 were as follows:
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Named Executive
Officer
|
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Fiscal 2017 Base
Salary
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|
Fiscal 2018 Base
Salary
|
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|
Percentage
Adjustment
|
|
Mr. Howe
|
|
$
|
650,000
|
|
|
$
|
670,000
|
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3.1
|
%
|
Mr. Jenson
|
|
$
|
525,000
|
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|
$
|
535,000
|
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|
1.9
|
%
|
Mr. Erwin
|
|
$
|
425,000
|
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|
$
|
435,000
|
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2.4
|
%
|
Mr. May
|
|
$
|
375,000
|
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|
$
|
400,000
|
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6.7
|
%
|
These base salary increases were effective as of July 1, 2017.
In September 2017, in connection with their promotion to
Co-Presidents
and General Managers of our Connectivity Division, the
Compensation Committee increased the annual base salaries of Mr. Arra and Ms. Gupta from $275,000 to $400,000. These increases were approved by the Compensation Committee after taking into consideration a competitive market analysis
prepared by its compensation consultant, the recommendations of our CEO, and the other factors described in Governance of Executive Compensation Program Role of the Compensation Committee above. The Compensation Committee also
determined that, in connection with his promotion to Chief Growth Officer, Mr. Mays annual base salary would remain at $400,000, in line with his July 1, 2017 increase.
Annual Cash Incentives
For fiscal 2018, our executive officers,
including the Named Executive Officers, and other key employees were eligible to earn annual cash incentive payments pursuant to the Fiscal 2018 CIP, which is subject to the terms and conditions of the Cash Incentive Plan. The Fiscal 2018 CIP
provided eligible participants with the opportunity to earn these payments based on our actual corporate performance as assessed against multiple financial measures and their individual contributions to this performance.
The Compensation Committee established each executive officers target and maximum annual cash incentive opportunity and set the formula for incentive payments at
the beginning of fiscal 2018. The Fiscal 2018 CIP also provides our CEO with discretion to modify individual executive officer payments by up to 10% and the Compensation Committee with the ability to adjust payments by up to 30% based on individual
performance as determined by the Compensation Committee for our CEO and as recommended by our CEO for our other executive officers. All individual performance adjustments were to be approved by the Compensation Committee in its sole discretion.
Target Annual Cash Incentive Opportunities
Each participant in the Fiscal
2018 CIP was assigned a target annual cash incentive opportunity, the amount of which was calculated as a percentage of his or her annual base salary.
In June
2017, the Compensation Committee reviewed the target annual cash incentive opportunities of our executive officers, including the Named Executive Officers, taking into consideration a competitive market analysis prepared by its compensation
consultant, the recommendations of our CEO (except with respect to his own target annual cash incentive opportunity), and the other factors described in Governance of Executive Compensation Program Role of the Compensation
Committee above. Following this review, the Compensation Committee, after consulting with our Board of Directors in the case of our CEO, decided to keep the target annual cash incentive opportunities of our executive officers at their fiscal
2017 levels. The target annual cash incentive opportunities of the then-Named Executive Officers for fiscal 2018 were as follows:
20
|
|
|
|
|
|
|
|
|
Named Executive Officer
|
|
Fiscal 2018 Target Annual Cash
Incentive Opportunity
(as a percentage of base
salary)
|
|
|
Fiscal 2018 Target Annual
Cash Incentive Opportunity
($)
|
|
Mr. Howe
|
|
|
110
|
%
|
|
$
|
737,000
|
|
Mr. Jenson
|
|
|
100
|
%
|
|
$
|
535,000
|
|
Mr. Erwin
|
|
|
65
|
%
|
|
$
|
282,750
|
|
Mr. May
|
|
|
65
|
%
|
|
$
|
260,000
|
|
In September 2017, in connection with their promotion to
Co-Presidents
and General Managers of
our Connectivity Division, the Compensation Committee set the target annual cash incentive opportunity of Mr. Arra at 20% of his adjusted annual base salary (or $80,000) and increased the target annual cash incentive opportunity of
Ms. Gupta from 50% to 65% of her adjusted annual base salary (or $260,000). The Compensation Committee also determined that Mr. Arra would continue to participate in the LiveRamp incentive plans in the amount of $275,000. These decisions
were approved by the Compensation Committee after taking into consideration a competitive market analysis prepared by its compensation consultant, the recommendations of our CEO, and the other factors described in Governance of Executive
Compensation Program Role of the Compensation Committee above. The Compensation Committee also determined that their annual cash incentive payments for fiscal 2018 would be
pro-rated
to reflect
these decisions and their tenure in their new positions. The Compensation Committee also determined that, in connection with his promotion to Chief Growth Officer, Mr. Mays target annual cash incentive opportunity would remain at 65% of
his annual base salary.
Corporate Performance Measures
In June 2017,
the Compensation Committee selected adjusted
revenue (Adjusted Revenue) and adjusted EBIT (Adjusted EBIT) as the corporate performance measures for the Fiscal 2018 CIP.
These performance measures were equally weighted and determined as follows:
|
|
|
|
|
Fiscal 2018 CIP Corporate
Performance Measure
|
|
Definition
|
|
Rationale
|
Adjusted Revenue (1)
|
|
Revenue adjusted to reflect the impact of acquisitions and divestitures during the year
|
|
Revenue growth is important to the creation of long-term stockholder value because it reflects managements ability to grow our top line through execution of our digital marketing ecosystem strategy
|
|
|
|
Adjusted EBIT (1)
|
|
EBIT adjusted to exclude certain items such as stock-based compensation expense, amortization of acquired intangibles,
one-time
business separation and transformation expenses, restructuring
and impairment charges consistent with the presentation of
non-GAAP
EBIT in our quarterly earnings releases
|
|
EBIT is an indicator of our profitability. This measure focuses on the outcome of operating decisions, while excluding the impact of
non-operating
decisions like interest expenses and tax
rates
|
(1)
|
See Schedule 1 on pages 37 to 38 of this Compensation Discussion and Analysis for a reconciliation of our GAAP net
earnings to Adjusted EBIT.
|
21
In June 2017, the Compensation Committee set the threshold, target, and maximum performance levels and the payment
percentages for each of the corporate performance measures for the Fiscal 2018 CIP as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
Performance Measure
|
|
Threshold
Performance Level
|
|
|
Target
Performance Level
|
|
|
Maximum
Performance Level
|
|
Adjusted Revenue
|
|
$
|
899,000,000
|
|
|
$
|
967,000,000
|
|
|
$
|
996,000,000
|
|
Adjusted EBIT
|
|
$
|
132,000,000
|
|
|
$
|
146,000,000
|
|
|
$
|
168,000,000
|
|
Funding
|
|
|
50
|
%
|
|
|
100
|
%
|
|
|
200
|
%
|
Performance measure levels were determined based on the Companys financial planning process. The Adjusted Revenue target was set
7.3% higher than the previous years actual performance. Adjusted EBIT was not a measure in the Fiscal 2017 Cash Incentive Plan, but Adjusted EBIT for the Fiscal 2018 CIP was set 13% higher than the actual Adjusted EBIT for fiscal year 2017.
Funding is linear between threshold and target and between target and maximum.
As provided in the Fiscal 2018 CIP, the corporate performance measures were subject
to adjustment by the Compensation Committee in recognition of unusual or nonrecurring events affecting us, any subsidiary or affiliate, our executive officers, or the financial statements of the Company or of any subsidiary or affiliate; in the
event of changes in applicable laws, regulations or accounting principles; or in the event the Compensation Committee determined that such adjustments were appropriate to prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the plan, subject to certain exceptions for awards intended to comply with Section 162(m) of the Code.
The Compensation Committee
set an Adjusted EBIT baseline of 80% of the target performance level $116,800,000
that must be achieved before any payment will be funded under the plan. In addition, a maximum of 25% of the target annual incentive cash incentive award
opportunities were to be funded until a threshold performance of 90% of the target performance level of Adjusted EBIT was achieved.
Fiscal 2018 CIP Payments
In March 2018, the Compensation Committee determined the amounts to be paid under the Fiscal 2018 CIP based on our actual performance for the year with respect
to each corporate performance measure. The actual results for fiscal 2018 were Adjusted
Revenue of $917.4
million and Adjusted EBIT of $146.1 million. Adjusted Revenue and Adjusted EBIT were calculated in accordance with the
terms of the Fiscal 2018 Plan as determined by the Compensation Committee. See Schedule 1 on pages 37 to 38 of this Compensation Discussion and Analysis for a reconciliation of our GAAP net earnings to Adjusted EBIT.
Initially, the Compensation Committee determined that we had exceeded the baseline target performance level of 80% of the Adjusted EBIT target for fiscal 2018. The
overall level of achievement on the corporate performance measures was 81%. The Compensation Committee determined that we had attained 95% of the Adjusted Revenue target performance level, and 100% of the Adjusted EBIT target performance level for
2018, as set forth in the chart below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
Performance
Measure
|
|
Weighting
|
|
|
Threshold
Performance
Level
|
|
|
Target
Performance
Level
|
|
|
Maximum
Performance
Level
|
|
|
Actual
Performance ($)
|
|
|
Actual
Performance
(as a
percentage
of target)
|
|
|
Payment
(as a
percentage
of target)
|
|
Adjusted revenue
|
|
|
50
|
%
|
|
$
|
899,000,000
|
|
|
$
|
967,000,000
|
|
|
$
|
996,000,000
|
|
|
$
|
917,400,000
|
|
|
|
95
|
%
|
|
|
63
|
%
|
Adjusted EBIT
|
|
|
50
|
%
|
|
$
|
132,000,000
|
|
|
$
|
146,000,000
|
|
|
$
|
168,000,000
|
|
|
$
|
146,100,000
|
|
|
|
100
|
%
|
|
|
100
|
%
|
Weighted payment as a percentage of target
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81
|
%
|
Pursuant to the Fiscal 2018 CIP, our CEO had the discretion to modify the annual cash incentive payment of any executive officer by up
to 10% based on his assessment of the executive officers individual performance for the
22
fiscal year. In addition, the Compensation Committee reserved the discretion to adjust payments from the maximum permitted under the plan by up to 30% based on individual performance as
determined by the Compensation Committee in the case of our CEO and as recommended by our CEO for our other executive officers. All such individual performance adjustments were to be approved by the Compensation Committee in its sole discretion.
After reviewing the individual performance of each of the Named Executive Officers after the end of the fiscal year, our CEO determined that each Named Executive
Officer had effectively performed the responsibilities associated with each of his or her individual performance goals and that, in the context of pursuing the objectives under our annual operating plan, had expended significant efforts to meet
these goals in a dynamic and increasingly challenging environment. With consideration of individual business segment performance, our CEO decided to exercise his discretion to modify the individual annual cash incentive payments of Mr. Erwin to
be in line with the results of the Audience Solutions business segment, which was 80%.
Based on these discussions, the Compensation Committee decided to reduce
Mr. Erwins payment from 81% to 80% as recommended by our CEO, and decided to not make any adjustment to the annual cash incentive payment based on its evaluation of the individual performance of our CEO.
The target annual cash incentive opportunities and the actual cash incentive payments made to the Named Executive Officers for fiscal 2018 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer
|
|
Fiscal 2018
Target
Annual
Cash
Incentive
Award
Opportunity
($)
|
|
|
Maximum
Performance
Factor
|
|
|
Corporate
Performance
Factor
|
|
|
Target
Multiplied by
Corporate
Performance
Factor
|
|
|
Actual
Annual
Cash
Incentive
Payment
|
|
|
Actual
Annual
Cash
Incentive
Payment
(as a
percentage
of target)
|
|
Mr. Howe
|
|
$
|
737,000
|
|
|
|
200
|
%
|
|
|
81
|
%
|
|
$
|
596,750
|
|
|
$
|
597,000
|
|
|
|
81
|
%
|
Mr. Jenson
|
|
$
|
535,000
|
|
|
|
200
|
%
|
|
|
81
|
%
|
|
$
|
433,350
|
|
|
$
|
433,350
|
|
|
|
81
|
%
|
Mr. Arra (1)
|
|
$
|
46,666
|
|
|
|
200
|
%
|
|
|
81
|
%
|
|
$
|
37,799
|
|
|
$
|
37,800
|
|
|
|
81
|
%
|
Mr. Erwin
|
|
$
|
282,750
|
|
|
|
200
|
%
|
|
|
81
|
%
|
|
$
|
229,028
|
|
|
$
|
226,200
|
|
|
|
80
|
%
|
Ms. Gupta (1)
|
|
$
|
151,666
|
|
|
|
200
|
%
|
|
|
81
|
%
|
|
$
|
122,849
|
|
|
$
|
122,850
|
|
|
|
81
|
%
|
Mr. May
|
|
$
|
260,000
|
|
|
|
200
|
%
|
|
|
81
|
%
|
|
$
|
207,309
|
|
|
$
|
207,309
|
|
|
|
81
|
%
|
(1)
|
Mr. Arras and Ms. Guptas actual cash incentive payments were
pro-rated
to reflect their promotions as of September 12, 2017.
|
Connectivity (or LiveRamp)
Division Incentive Plan Mr. Arra
During fiscal 2018, Mr. Arra was a participant in the Fiscal 2018 LiveRamp Executive Incentive Plan (the
Fiscal 2018 LIP). The Fiscal 2018 LIP was intended to provide an incentive for certain employees of our Connectivity (or LiveRamp) Division serving in an executive role to earn commissions based on the achievement of
pre-established
financial objectives that were aligned with the Divisions overall goals for fiscal 2018.
Mr. Arras target commission opportunity for fiscal 2018 was set at $275,000, which was to be earned in four equal quarterly increments based on
pre-established
global revenue and profitability targets for the Connectivity (or LiveRamp) Division in each fiscal quarter. For each fiscal quarter, the revenue performance measure was weighted 80% and the
profitability performance measure was weighted 20%.
For fiscal 2018, the Connectivity (or LiveRamp) Division achieved, in the aggregate, 95% of its global revenue
target and 84% of its global profitability target, which resulted in Mr. Arra earning a total commission payment in the amount of $225,746, which represented 82.1% of his target commission opportunity for fiscal 2018.
23
Acxiom Marketing Solutions Incentive Plan
On March 31, 2018, the Compensation Committee approved an incentive plan for certain of our senior employees, including Mr. Erwin, which was communicated to
participants in April 2018, providing for the payment of a discretionary bonus to such employees in the event of a sale of the Acxiom Marketing Solutions Division (the Potential Sale). The approval of this incentive plan followed our
announcement in February 2018 that, in conjunction with the realignment of our portfolio into two distinct business units, we were planning to actively explore strategic alternatives to further strengthen the Acxiom Marketing Solutions Division and
deliver greater value to its clients, including a strategic partnership, acquisition,
tax-free
merger, joint venture,
tax-free
spin-off,
sale or other potential strategic combinations.
Pursuant to the incentive plan, Mr. Erwin may be eligible
for a contingent and discretionary bonus in the event of a sale of the Acxiom Marketing Solutions Division in addition to his otherwise normal compensation arrangements. Among other things, the incentive plan requires Mr. Erwin to continue to
be employed in his current position by a buyer for a period of six months (unless his employment is involuntarily terminated by such buyer). Further, any payment of this bonus will be made in installments over a period of up to 12 months after a
closing of the sale.
Long-Term Incentive Compensation
The Compensation
Committee believes long-term incentive compensation is an effective tool for focusing our executive officers, including the Named Executive Officers, on increasing stockholder value over a multi-year period, providing a meaningful reward for
appreciation in our stock price and long-term value creation, and motivating continued employment. Long-term incentive compensation can also serve to discourage inappropriate short-term risk-taking behaviors.
As with their other elements of compensation, the Compensation Committee determines the amount of long-term incentive compensation for our executive officers (and, in
the case of our CEO, formulates its recommendation for his long-term incentive compensation award) as part of its annual compensation review and after taking into consideration a competitive market analysis prepared by its compensation consultant,
the recommendations of our CEO (except with respect to his own long-term incentive compensation), the outstanding equity holdings of each executive officer, the projected impact of the proposed awards on our earnings, the proportion of our total
shares outstanding used for annual employee long-term incentive compensation awards (our burn rate) in relation to the median proportions of the companies in our compensation peer group, the potential voting power dilution to our
stockholders (our overhang) in relation to the median practice of the companies in our compensation peer group, and the other factors described in Governance of Executive Compensation Program Role of the Compensation
Committee above.
For fiscal 2018, the Compensation Committee provided long-term incentive compensation opportunities to our executive officers, including the
Named Executive Officers, in the form of PSU awards and time-based RSU awards. The awards were weighted more heavily towards PSUs for our CEO, with 60% of his award in the form of a PSU award and 40% in the form of an RSU award. For the other Named
Executive Officers, the awards were weighted 50% in the form of PSU awards and 50% in the form of RSU awards. This mix reflected the Compensation Committees objective of providing equity awards which align the compensation of our executive
officers with the interests of our stockholders, reward our executive officers for our performance, and encourage their retention. The Compensation Committee sets the target amounts of these long-term incentive compensation awards based on the
factors described in Governance of Executive Compensation Program Role of the Compensation Committee above, including the executive officers responsibilities, length of service, demonstrated personal performance, Company
performance, internal pay equity, tax considerations, and competitive market and peer group data.
Annual Equity Awards
In June 2017, the Compensation Committee approved long-term incentive equity awards to each of our then-executive officers (other than our CEO) in amounts ranging from
approximately $800,000 to approximately $1,690,000, split evenly between RSUs and PSUs. Our CEO was granted a PSU award with a value of approximately $2,400,000 and an RSU award with a value of approximately $1,600,000.
24
The equity awards granted to the then-Named Executive Officers for fiscal 2018 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer
|
|
RSU Awards
(number of shares)
|
|
|
PSU Awards
(number of shares at
target)
|
|
|
Total Grant Date Fair
Value
($)
|
|
Mr. Howe
|
|
|
61,022
|
|
|
|
91,085
|
|
|
$
|
4,022,566
|
|
Mr. Jenson
|
|
|
31,784
|
|
|
|
31,784
|
|
|
$
|
1,689,054
|
|
Mr. Erwin
|
|
|
15,181
|
|
|
|
15,181
|
|
|
$
|
806,718
|
|
Mr. May
|
|
|
19,006
|
|
|
|
19,006
|
|
|
$
|
1,005,418
|
|
The RSU awards granted to our executive officers in June 2017 vest annually in equal increments over a period of four years beginning on
the first anniversary of the date of grant. The four-year vesting period for the RSU awards is intended to encourage retention while rewarding increases in the price of our common stock. The following graph explains the design of these RSU awards:
PSU Awards
The PSU awards granted to our
executive officers in June 2017 may be earned based on our financial performance as measured over a three-year performance period. Each PSU award entitles the holder to a number of shares of our common stock ranging from zero to 200% of the target
number of units awarded (with each unit equal to a single share of our common stock). As described below, the three-year performance period for the PSU awards is intended to promote long-term stock price appreciation equal to or greater than the
S&P Midcap 400 Index, as well as encourage retention.
The following graph and accompanying tables explain the design of the fiscal 2018 PSU awards:
25
These PSU awards will be earned based on our relative TSR compared to the S&P Midcap 400 Index measured over a
three-year performance period beginning April 1, 2017 and ending March 31, 2020 as set forth in the following table:
Fiscal 2018 PSU
Awards Performance Measure
|
|
|
TSR Percentile
|
|
TSR Modifier (1)
|
Below 25
th
percentile
|
|
0
|
25
th
percentile
|
|
25%
|
50
th
percentile
|
|
77%
|
60
th
percentile
|
|
100%
|
90
th
and above
|
|
200%
|
(1)
|
The PSUs earned are to be determined on a linear basis between the specified target levels.
|
In designing the PSU awards, the Compensation Committee determined that it should require 60
th
percentile
performance for the target number of units to be earned.
For purposes of these PSU awards, TSR for the Company and the S&P Midcap 400 Index is to be calculated
by dividing the difference between the starting and ending share price for the performance period (taking into account any dividends) by the starting share price. For purposes of calculating both our TSR and the TSR for the companies in the S&P
Midcap 400 Index, the share prices will be calculated using the average of the opening and closing prices of the common stock for the 20 trading days preceding the starting and ending dates.
Promotion Equity Awards
Mr.
Arras and
Ms.
Guptas RSU Awards
. In September 2017, in connection with their promotion to
Co-Presidents
and General Managers of our Connectivity Division, the Compensation Committee approved
long-term incentive equity awards to each of Mr. Arra and Ms. Gupta. This decision was made by the Compensation Committee after taking into consideration a competitive market analysis prepared by its compensation consultant, the
recommendations of our CEO, and the other factors described in Governance of Executive Compensation Program Role of the Compensation Committee above. Specifically, the Compensation Committee granted each of Mr. Arra and
Ms. Gupta an RSU award for 87,184 shares of our common stock with a value of approximately $2,082,826, of which 50% will vest on the first anniversary of the grant date with the remainder vesting quarterly thereafter through the second
anniversary of the grant date, subject to each Named Executive Officers continued employment with the Company as of each vesting date.
Mr.
Mays PSU Award
.
Also in September 2017, in connection with his appointment as our Chief Growth Officer, the Compensation
Committee granted Mr. May a PSU award for 87,184
shares of our common stock (having a value of approximately $2,082,826). This PSU award, which is to be earned subject to the terms and conditions described below, was granted by the
Compensation Committee after taking into consideration a competitive market analysis prepared by its compensation consultant, the recommendation of our CEO, and the other factors described in Governance of Executive Compensation Program
Role of the Compensation Committee above.
The additional PSU award granted to Mr. May provided that he may earn between zero and 150% of the target
number of shares of our common stock subject to the award (87,184 shares) based on the target revenue run rate as measured separately for each of two consecutive
one-year
performance periods, the
first beginning on October 1, 2017 and ending September 30, 2018 (Year One) and the second beginning October 1, 2018 and ending September 30, 2019 (Year Two)
based on the following matrix:
26
Target Revenue Run Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than $1.0
million
|
|
Greater than or
equal to
$1.0 million but
less
than
$4.0 million
|
|
Greater than or
equal to
$4.0 million but
less
than
$15.0 million
|
|
Greater than
or equal to
$15.0 million
|
Payout Percentage of Target Award
|
|
Year One
|
|
0%
|
|
50%
|
|
Linear between 50% and 75%
|
|
75%
|
Payout Percentage of Target Award
|
|
Year Two
|
|
0%
|
|
50%, less Year One payout
|
|
Linear between 50% and 75%, less Year One payout
|
|
150%, less Year One payout
|
For purposes of the award, target revenue run rate means revenue generated from growth initiatives generated by Mr. May
on or after October 1, 2017. The determination of the level of attainment for each
one-year
performance period was to be made by the Compensation Committee at its first regularly scheduled meeting
following the close of each
one-year
performance period. In no event would the number of shares of our common stock earned exceed 150% of the number of shares initially granted to Mr. May under this
award.
While the maximum number of shares of our common stock may be earned at any time, the maximum payment in Year One was limited to 75% of the target number of shares.
Fiscal 2016 PSU Awards
The three-year performance period for the PSU awards
granted in fiscal 2016 (the 2016 PSUs) was completed on March 31, 2018. Pursuant to the terms of the awards, performance was to be evaluated based on our adjusted diluted EPS (Adjusted EPS) growth over the three-year
performance period. Further, the number of units earned was subject to adjustment by as much as
+/-20%
based on our TSR compared to the S&P Midcap 400 Index over the performance period as set forth below,
subject to an overall cap of 200%.
The target level for the Adjusted EPS performance measure was $1.00 per share, which represented a compound annual growth rate
of 10.6% from our fiscal 2015 Adjusted EPS of $0.74 per share, the year prior to the start of the performance period.
In calculating our Adjusted EPS for PSU
attainment, certain adjustments to fiscal 2018 GAAP EPS were required under the terms of the awards. Specifically, targeted fiscal 2018 EPS associated with discontinued operations (the IT Infrastructure Management and the Acxiom Impact businesses)
were added back, and required adjustments for acquisitions were made, resulting in fiscal 2018 Adjusted EPS for PSU attainment of $1.45 per share.
At the end of
March 2018, the Compensation Committee determined that, pursuant to the terms of the awards, our Adjusted EPS of $1.45 per share resulted in each executive officer tentatively earning 200% of his or her target 2016 PSU awards.
Fiscal 2016 PSU Awards Performance Measure
|
|
|
Resulting Fiscal 2018
Adjusted EPS (1)
|
|
Percentage of PSUs Earned (2)
|
Below $0.90
|
|
0
|
$0.90
|
|
50%
|
$1.00
|
|
100%
|
$1.10
|
|
200%
|
(1)
|
See Schedule 1 on pages 37-38 of this Compensation Discussion and Analysis for a reconciliation of our GAAP EPS to
overall
Non-GAAP
EPS and Adjusted EPS for PSU attainment.
|
(2)
|
The PSUs earned were to be determined on a linear basis between the specified target levels.
|
27
This tentative amount was then adjusted by 1.1964 to reflect our relative TSR over the three-year performance period based
on the following matrix:
Fiscal 2016 PSU Awards Modifier
|
|
|
|
|
TSR Percentile
|
|
TSR Modifier (1)
|
|
Below 25
th
|
|
|
0.8
|
|
50
th
|
|
|
1.0
|
|
75
th
and above
|
|
|
1.2
|
|
(1)
|
The modifier between the specified target levels will be calculated using straight-line interpolation.
|
Our relative TSR for the three-year performance period was in the 74.56 percentile. As a result of the application of the TSR modifier, each
executive officer earned 200% of his or her target 2016 PSU awards.
TSR is calculated for the Company and S&P 400 Midcap Index based on the same calculation as
the fiscal 2018 PSU awards as described above, but based on the time period from April 1, 2015 to March 31, 2018.
The number of shares of our common
stock earned pursuant to the fiscal 2016 PSUs for each of the Named Executive Officers was as follows (Mr. Arra and Ms. Gupta were not executive officers at the time these PSU awards were granted in fiscal 2016):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer
|
|
Fiscal 2016 PSU
Award Target
(number of
shares)
|
|
|
Financial
Performance
Factor
|
|
|
Shares Earned
|
|
|
Vesting Date Fair
Value (1)
|
|
Mr. Howe
|
|
|
86,907
|
|
|
|
200
|
%
|
|
|
173,814
|
|
|
$
|
3,947,315
|
|
Mr. Jenson
|
|
|
35,714
|
|
|
|
200
|
%
|
|
|
71,428
|
|
|
$
|
1,622,130
|
|
Mr. May
|
|
|
13,825
|
|
|
|
200
|
%
|
|
|
27,965
|
|
|
$
|
635,085
|
|
(1)
|
Vesting date fair value is calculated by multiplying the number of shares earned by the closing market price per share of
our common stock ($22.71) on the vesting date of March 29, 2018.
|
PRSU Award for Mr. Jenson
In March 2015, the Compensation Committee granted to Mr. Jenson a performance-based restricted stock unit (PRSU) award covering 111,111 shares of our
common stock. This PRSU award was granted to Mr. Jenson in connection with the renewal of his employment agreement given the critical role he plays in driving our Companys financial performance as our CFO and President of Acxiom
International. This award was intended to provide a benefit to him only after our stockholders had realized a specified level of appreciation in the market price of our common stock over a three-year performance period beginning April 1, 2015
and ending March 31, 2018.
Pursuant to the terms of this award, Mr. Jenson was to earn a specified number of shares of our common stock based on the
application of a share price factor correlated to specific dollar market prices for our common stock. He would earn no shares of our common stock under the award if the market price of our common stock at the end of the performance
period did not exceed the $25.00 per share (representing a 35% premium to the closing market price of $18.57 per share for our common stock on the date of grant) and the number of shares that he could earn was capped at 100% of his target shares
(based on a market price of $45.00 per share) irrespective of the final settlement price. An increasing number of shares would be earned and vest according to a specific performance schedule as the settlement price increased between $25.00 and
$45.00 per share. In the event that the settlement price fell between the share prices set forth in the performance schedule, the number of shares earned would be determined on a linear basis between the specific stock prices. In addition to the
share price requirement, the PRSU award would vest only if our three-year aggregate total revenues for the performance period were greater than three times our fiscal 2016 budgeted total revenue. For purposes of the award, our share price at the end
of the performance period was to be calculated using the average of the opening and closing market price for our common stock for the 20 trading days ending March 31, 2018.
In May 2018, the Compensation Committee evaluated the market price of our common stock as of the end of the performance period, which it determined to be $30.55 per
share. Based on the terms of the award, this resulted in a share price factor of 40.8275% and, on an interpolated basis, the earning of 45,364 shares of our common stock. Based on this calculation, the Compensation Committee approved the issuance of
45,364 shares of our common stock to Mr. Jenson.
28
Fiscal 2016 Inducement Award for Mr. Erwin
In April 2015, the Compensation Committee granted to Mr. Erwin a PSU award covering 41,929 shares of our common stock. This PSU award was to be earned based on our
average annual data products revenue growth as measured over a three-year performance period beginning April 1, 2015 and ending March 31, 2018. The Compensation Committee granted this award to Mr. Erwin to provide additional incentive
for him to drive the growth of our Audience Solutions Division.
Pursuant to the terms of the PSU award, Mr. Erwin was able to earn a number of shares of our
common stock ranging from zero to 150% of the target number of shares covered by the award based on the following matrix:
Data Products Average
Annual Revenue Growth
|
|
|
|
|
Average Annual Revenue Growth
|
|
Percentage of PSUs Earned
|
|
Below 5.0%
|
|
|
0
|
%
|
5.0% up to 7.99%
|
|
|
50
|
%
|
8.0% up to 9.99%
|
|
|
75
|
%
|
10.0% up to 11.99%
|
|
|
100
|
%
|
12.0% or more
|
|
|
150
|
%
|
For purposes of the award, data products revenue meant such revenue as specified in our financial reports and as adjusted
pursuant to the terms of his award agreement to ensure consistency in the revenue included in the calculation over the term of the performance period.
In May
2018, the Compensation Committee
evaluated the growth rate for our data products revenue for each fiscal year during the three-year performance period and determined that our average annual growth rate during that period was 6.63%,
resulting in 50% attainment and 20,965 earned shares.
PSU Awards for Messrs. May and Arra and Ms. Gupta
In June 2017, the Compensation Committee approved long-term incentive equity grants to Messrs. May and Arra and Ms. Gupta in the form of PSU awards as follows:
|
|
|
|
|
|
|
|
|
Named Executive Officer
|
|
PSU Awards
(number of shares)
|
|
|
Total Grant Date Fair Value
($)
|
|
Mr. May
|
|
|
19,006
|
|
|
$
|
502,709
|
|
Mr. Arra
|
|
|
8,533
|
|
|
$
|
226,227
|
|
Ms. Gupta
|
|
|
8,533
|
|
|
$
|
226,227
|
|
Pursuant to the terms of these awards, they were to earn (and fully vest in) a specified number of shares of our common stock based on
the performance of the Connectivity (or LiveRamp) Divisions attainment of
pre-established
performance targets for revenue growth (Growth Rate) and operating margin (Operating
Margin) during three consecutive performance periods corresponding to our 2018, 2019, and 2020 fiscal years. Each PSU award, which represents 100% of each Named Executive Officers target award, is subject to adjustment (either increase
or decrease) depending on the Connectivity Divisions performance relative to the
pre-established
performance targets, as such performance is finally determined by the Compensation Committee following the
completion of each fiscal year.
In May 2018, the Compensation Committee evaluated the Growth Rate and Operating Margin for the Connectivity Division for fiscal
2018 and determined that it had achieved an attainment percentage of 48.73% for the Growth Rate performance measure and an attainment percentage of 14.17% for the Operating Margin performance measure, resulting in a combined attainment percentage of
53.27% for the first tranche of these PSU awards.
29
Accordingly, the number of shares of our common stock earned pursuant to these PSU awards by Messrs. May and Arra and
Ms. Gupta for the fiscal 2018 performance period were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer
|
|
PSU Award
Target (total
number of
shares)
|
|
|
PSU Award
Target (fiscal
2018
performance
period)
|
|
|
Attainment
Percentage for
fiscal 2018
performance
period
|
|
|
Number of
Shares Earned
(fiscal 2018
performance
period)
|
|
Mr. May
|
|
|
19,006
|
|
|
|
6.335
|
|
|
|
53.27
|
%
|
|
|
3,375
|
|
Mr. Arra
|
|
|
8,553
|
|
|
|
2,851
|
|
|
|
53.27
|
%
|
|
|
1,519
|
|
Ms. Gupta
|
|
|
8,553
|
|
|
|
2,851
|
|
|
|
53.27
|
%
|
|
|
1,519
|
|
Retirement and Welfare Benefits
Our
executive officers, including the Named Executive Officers, are eligible to participate in the same
tax-qualified
retirement and welfare plans as our other full-time employees. We sponsor a Section 401(k)
plan that provides for employer matching contributions paid in shares of our common stock, subject to specified vesting requirements. Our executive officers are also eligible to receive retirement benefits through our
non-qualified
supplemental retirement plan discussed below. We believe these benefits are important for attracting, motivating, rewarding, and retaining our executive officers, and are comparable to those
retirement benefits being provided by companies in our compensation peer group.
Defined Benefit Pension Plan
None of our executive officers, including none of the Named Executive Officers, participate in or have an account balance in a
tax-qualified
defined benefit pension plan maintained by us.
Supplemental Executive Retirement Plan
While we do not maintain a defined benefit pension plan, our highly-compensated employees, including the Named Executive Officers, are eligible to participate in our
non-qualified
supplemental executive retirement plan (the SERP) which enables them to contribute their
pre-tax
income into the plan through payroll deductions. We
match contributions at a rate of 50% for each dollar contributed by a participant (up to 6% of his or her compensation) but only to the extent that the maximum matching contribution has not already been made under the Section 401(k) plan. These
employer matching contributions are subject to a vesting requirement.
Health Benefit Plans
We maintain several broad-based employee benefit plans in which our executive officers, including the Named Executive Officers, are permitted to participate on the same
terms as other employees who meet applicable eligibility criteria, subject to legal limitations on the amounts that may be contributed or the benefits that may be payable under the plans. These include health benefits, life insurance, disability
benefits, and an employee stock purchase plan. We believe these benefits encourage the overall health, stability and well-being of our executive officers and are comparable to those plans being provided by the companies in our compensation peer
group.
Perquisites and Other Personal Benefits
We do not view
perquisites or other personal benefits as a significant component of our executive compensation program. We describe the perquisites and other personal benefits provided to the Named Executive Officers in footnote 4 to the Summary Compensation Table
elsewhere in this Compensation Discussion and Analysis.
In the future, we may provide perquisites or other personal benefits in limited situations, such as where
we believe it is appropriate to assist an individual in the performance of his or her duties, to make our executive officers more efficient and effective, and for recruitment and retention purposes. All future practices with respect to perquisites
or other personal benefits will be approved and subject to periodic review by the Compensation Committee.
30
Employment Agreements
In
February 2018, we amended the employment agreements of our CEO and CFO. Each of these employment agreements had an initial three-year term and provided for automatic renewal thereafter for successive
one-year
terms unless we or the applicable executive officer elected not to extend the term upon 180 days notice. The term of our CEOs employment agreement was automatically extended on July 26, 2017, while the term of our CFOs
employment agreement was automatically extended on January 11, 2018.
As amended, these employment agreements:
|
|
|
Continue to provide for automatic renewal as of the last day of their original term for successive
one-year
terms unless we or the applicable executive officer elects not to extend the term upon 180 days notice;
|
|
|
|
Continue to provide for the annual review of each executive officers cash compensation arrangements, including his
annual base salary and target annual cash incentive opportunity, and annual consideration of the grant of long-term equity incentive awards;
|
|
|
|
Revise the treatment of PSU awards in the event of a change in control of the Company to provide that:
|
|
|
|
the applicable performance period for such awards will be truncated;
|
|
|
|
the number of PSUs that become eligible to vest will be determined by the degree of achievement of the applicable
performance objectives as of the change in control date; and
|
|
|
|
the number of PSUs that were determined to be eligible to vest will be treated as unvested RSUs, and if appropriately
assumed or substituted for by the acquiring or surviving entity (or an affiliate of such entity), will convert to RSUs of equal value to be settled in cash or shares by the acquiring or surviving entity (as determined pursuant to the definitive
agreement relating to the change in control). If the executive officer remains employed with the acquiring or surviving entity through the end of the original performance period, the RSUs (i.e., the converted PSU awards) will become fully vested.
Further, if within 24 months following a change in control, the executive officers employment is terminated without cause, he or she resigns for good reason, or if he or she dies or becomes disabled, the RSUs (i.e., the PSU awards), to the
extent unvested, will become fully vested. If the RSU awards (i.e., the converted PSU awards) are not appropriately assumed or substituted by the acquiring or surviving entity (or an affiliate thereof), then such RSU awards will fully vest in
accordance with the terms of the 2005 Equity Compensation Plan of Acxiom Corporation, as amended and restated (the 2005 Plan).
|
Generally, these agreements set forth the rights and responsibilities of each party and protect both parties interests in the event of a termination of employment
by providing our CEO and CFO with the opportunity to receive certain specified post-employment payments and benefits in the event of certain terminations of employment, including following a change in control of the Company. Finally, these
employment agreements prohibit our CEO and CFO from engaging directly or indirectly in competition with us, recruiting or soliciting any of our customers for a
one-year
period following termination of
employment. These post-employment compensation arrangements are described in more detail in Post-Employment Compensation below and Fiscal 2018 Potential Payments upon Termination or Change in Control elsewhere herein.
For a description of the specific terms and conditions of the employment agreements with our CEO and CFO, see the discussion of Employment Agreements
elsewhere herein.
Post-Employment Compensation
We believe that having
in place reasonable and competitive post-employment compensation arrangements are essential to attracting and retaining highly-qualified executive officers. Accordingly, our CEO and CFO are eligible to receive certain specified payments and benefits
in the event of a termination of employment in connection with a change in control of the Company as provided in their employment agreements. In addition, the other Named Executive Officers are eligible to participate in the Acxiom Corporation
Amended and Restated 2010 Executive Officer Severance Policy.
Our post-employment compensation arrangements have been designed to provide reasonable compensation
to executive officers who leave the Company under certain circumstances to facilitate their transition to new employment. Further, we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing
executive officer to sign and not revoke a general release and waiver of any and all claims against us as a condition to receiving post-employment compensation payments or benefits.
31
We do not consider specific amounts payable under these post-employment compensation arrangements when establishing annual
compensation. We do believe, however, that these arrangements are necessary to offer compensation packages that are competitive.
In determining payment and benefit
levels under the various circumstances triggering the post-employment compensation arrangements for the Named Executive Officers, the Compensation Committee has drawn a distinction between voluntary terminations of employment, terminations of
employment for cause, and terminations of employment without cause or as a result of a change in control of the Company. Payment in the latter circumstances has been deemed appropriate in light of the benefits to us described above, as well as the
likelihood that the executive officers departure is due, at least in part, to circumstances not within his or her control. In contrast, we believe that payments are not appropriate in the event of a termination of employment for cause or a
voluntary resignation because such events often reflect either inadequate performance or an affirmative decision by the executive officer to end his or her relationship with us.
In the case of the post-employment compensation arrangements in the event of a termination of employment in connection with a change in control of the Company, we
believe that these arrangements are designed to align the interests of management and stockholders when considering our long-term future. The primary purpose of these arrangements is to keep our most senior executive officers focused on pursuing all
corporate transaction activity that is in the best interests of stockholders regardless of whether those transactions may result in their own job loss. Reasonable post-acquisition payments and benefits should serve the interests of both the
executive officer and our stockholders.
Generally, payments and benefits in the event of a change in control of the Company are payable only if there is a
subsequent loss of employment by an executive officer (a
so-called
double-trigger arrangement). In the case of the acceleration of vesting of outstanding equity awards, we use this double-trigger
arrangement to protect against the loss of retention power following a change in control of the Company and to avoid windfalls, both of which could occur if vesting accelerated automatically as a result of the transaction.
We have not provided excise tax payments
(gross-ups)
relating to a change in control of the Company and have no such
obligations in place with respect to any of our executive officers, including any of the Named Executive Officers. Consistent with our historical practice, in the future we intend to refrain from providing
gross-ups
relating to a change in control of the Company.
Modification of Post-Employment Compensation Arrangements
In December 2017, the Compensation Committee approved amendments to the 2005 Plan, and authorized our management to make conforming amendments to our other
equity compensation plans, to ensure that equity awards granted pursuant to such plans were treated consistently among all recipients of such awards. At the same time, the Compensation Committee amended the 2005 Plan, the Acxiom Corporation Amended
and Restated 2010 Executive Officer Severance Policy (the Severance Policy), and the Acxiom Corporation 2010 Senior Vice President and Special Situation Associate Change in Control Severance Policy, (the SVP Severance
Policy), as well as the outstanding award agreements for PSU awards granted in fiscal 2017 and fiscal 2018 to provide for consistent and coordinated treatment of PSU awards in connection with a change in control of the Company. Pursuant to
these amendments, in the event of a change in control:
|
|
|
the applicable performance period for such PSU awards will be truncated,
|
|
|
|
the number of PSUs that become eligible to vest will be determined by the degree of achievement of the applicable
performance objectives as of the change in control date, and
|
|
|
|
the number of PSUs that were determined to be eligible to vest will be treated as unvested RSUs, and if assumed or
substituted for by the acquiring or surviving entity (or an affiliate of such entity), will convert into RSUs (or other compensatory arrangements) of equal value to be settled in cash or shares by the acquiring or surviving entity (as determined
pursuant to the definitive agreement relating to the change in control). If the executive officer remains employed with the acquiring or surviving entity through the end of the original performance period, the RSUs (i.e., the converted
|
32
|
PSU awards) will become fully vested. Further, if within 24 months following a change in control, the executive officers employment is terminated without cause, he or she resigns for good
reason, or if he or she dies or becomes disabled, the RSUs (i.e., the converted PSU awards), to the extent unvested, will become fully vested. If the RSU awards (i.e., the converted PSU awards) awards are not appropriately assumed or substituted by
the acquiring or surviving entity (or an affiliate of such entity), then such converted RSU awards will fully vest in accordance with the terms of 2005 Plan.
|
For information on the post-employment compensation arrangements for the Named Executive Officers, as well as an estimate of the potential payments and benefits payable
under these arrangements as of the end of fiscal 2018, see Fiscal 2018 Potential Payments Upon Termination or Change in Control elsewhere herein.
In
February 2017, the Compensation Committee also approved certain interpretations related to the 2005 Plan, the Severance Policy, the SVP Severance Policy and the Employment Agreements of our CEO and CFO related to treatment under these arrangements
in the event of a sale of one of the Companys divisions, including the previously announced potential sale of Acxiom Marketing Solutions (a Potential Sale). The deemed treatments under these arrangements differ depending on whether
an employee, including a Named Executive Officer, remains employed by us following a Potential Sale or whether an employee, including a Named Executive Officer, goes with the division sold in the Potential Sale.
For all employees, whether they remain employed by us following a Potential Sale or not, the Compensation Committee determined that a Potential Sale would constitute a
change in control for purposes of the 2005 Plan and all awards granted under the 2005 Plan. All PSU awards would, upon a change in control, convert into a number of RSUs pursuant to the process discussed above. However, for employees that remain
employed by us following a Potential Sale, awards granted under the 2005 Plan (including PSU awards converted into RSU awards pursuant to the process discussed above) would be deemed to be assumed and continued by us following a Potential Sale and
would vest, subject to employees continued employment with us, at the end of the original performance period. For awards granted to employees that go with a division sold in a Potential Sale, if such awards are not assumed or
substituted by the purchaser in a Potential Sale, the awards would receive the treatment set forth in the 2005 Plan: (i) options and RSUs (including PSU awards converted into RSUs pursuant to the process discussed above) would vest; and
(ii) any other performance awards would be considered prorated and would be settled or distributed.
For employees who remain employed by us following a
Potential Sale, the Compensation Committee determined that, for purposes of the Severance Policy, the SVP Policy, and the Employment Agreements, a Potential Sale will not constitute a change in control (which, in conjunction with a qualifying
termination of employment, would otherwise entitle eligible employees to severance payments and benefits), except in two limited circumstances. In the event that (i) we materially reduce an executives, including a Named Executive
Officers, total compensation or (ii) an executive, including a Named Executive Officer, is required to relocate, in either case, within 24 months of a Potential Sale, such executive will be entitled to claim a post-change in control good
reason termination of employment under the applicable arrangement.
For employees who go with a division sold in a Potential Sale, the Compensation
Committee determined that a change in control will occur for purposes of the Severance Policy and SVP Severance Policy, entitling such eligible employees to severance payments and benefits under the applicable arrangements in accordance with those
arrangements.
Compensation-Related Risks
As described above, the
Compensation Committee and our Board of Directors consider many factors in making compensation decisions for our executive officers. One such factor is the risk associated with our executive compensation program. After a review and assessment of
potential risks, the Compensation Committee has concluded that our compensation programs, policies, and practices do not create risks that are reasonably likely to have a material adverse effect on the Company. Material risk in the design of our
executive compensation program is mitigated in several ways:
|
|
|
The weighting of our annual and long-term incentives appropriately balances the importance of our short-term and long-term
financial and strategic objectives;
|
33
|
|
|
Our long-term incentive compensation awards to our executive officers are currently allocated between RSU awards that may
be settled for shares of our common stock, and PSU awards pursuant to which shares of our common stock may be earned, which provides a balance of incentives;
|
|
|
|
Our annual cash incentive plan contains caps on maximum payouts and the Compensation Committee retains authority to reduce
incentive plan payouts in its discretion;
|
|
|
|
Performance-based incentive compensation plans are not overly reliant on a single performance measure and include the use
of multi-year performance measures to mitigate the risk of our executive officers focusing exclusively on short-term growth at the expense of sustained profitability and increase in stockholder value; and
|
|
|
|
Our stock ownership guidelines (described below) require our executive officers to hold significant amounts of our common
stock, which commits an appropriate portion of their compensation to our long-term performance.
|
Section 5: Other Compensation Policies
and Practices
Stock Ownership Guidelines
We believe that linking a
significant portion of our executive officers current and potential future net worth to our success, as reflected in the value of our common stock, helps to ensure that they have a stake similar to that of our stockholders. Our executive
officers are subject to stock ownership guidelines designed to ensure that they have a meaningful stake in the Company. These guidelines are intended to balance an executive officers need for portfolio diversification while ensuring that his
or her interests are closely aligned with the interests of our stockholders. These stock ownership guidelines are as follows:
|
|
|
Executive Officer
|
|
Stock Ownership Requirement
|
Chief Executive Officer
|
|
Three times annual base salary
|
Other Executive Officers
|
|
One times annual base salary
|
Generally, each executive officer has five years from the date of appointment to attain the required ownership level. Under the
guidelines, stock ownership includes shares of our common stock: purchased on the open market; owned jointly with, or separately by, immediate family members (spouse and dependent children); held in trust for the Named Executive Officer or an
immediate family member; held through any Company-sponsored plan, such as an employee stock purchase plan, a qualified retirement plan, or a supplemental executive retirement plan; obtained through the exercise of stock options; and 50% of RSU
awards (after deduction of applicable federal and state taxes).
Until his or her required ownership level is met, an executive officer is expected to retain 50% of
the net shares of our common stock acquired upon option exercises, and 50% of the shares of our common stock issued upon the vesting of a RSU award or PSU award (after deduction of applicable federal and state taxes). Failure to meet or, in unique
circumstances, to show sustained progress toward meeting the above guidelines may result in a reduction in future equity awards or cash incentive payouts in the form of shares of our common stock.
As of March 31, 2018, each of the Named Executive Officers had satisfied his or her stock ownership requirement. Please see the section entitled Stock
Ownership elsewhere in this Compensation Discussion and Analysis for a presentation of the equity holdings of our executive officers, including the Named Executive Officers.
Compensation Recovery (Claw back) Policy
We maintain a claw back
recovery policy which provides that if we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the federal securities laws as a result of the intentional misconduct by an
executive officer with a title of Senior Vice President or higher, our Board of Directors may require reimbursement for any bonus or other incentives (including equity awards) earned above what would have been earned under the restated financials,
including any profits realized from the sale of our equity securities, that was paid to any such executive officer during the
12-month
period preceding the first public issuance or filing with the SEC of the
financial document in which the material noncompliance was contained. The independent members of our Board of Directors will determine whether material noncompliance with a financial reporting requirement is the result of intentional misconduct of
the executive officer.
34
Notwithstanding the foregoing, we intend to evaluate this policy and take further action with respect to the recovery of
excess incentive-based compensation that our Board of Directors determines to be necessary or advisable to comply with the requirements of applicable law (including, without limitation, Section 304 of the Sarbanes Oxley Act of 2002 and, once
the SEC adopts final rules pertaining thereto, Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act).
Policy Prohibiting Hedging or
Pledging of Our Equity Securities
Our Insider Trading Policy prohibits our executive officers, including the Named Executive Officers, and the members of our
Board of Directors from engaging in short sales, as well as hedging or monetization transactions (such as
zero-cost
collars and forward sales contracts) that involve the establishment of a short position in
our common stock. In addition, our executive officers, including the Named Executive Officers, are prohibited from holding shares of our common stock in a margin account or otherwise pledging shares of our common stock as collateral for a loan.
Section 6: Tax and Accounting Considerations
The Compensation Committee
periodically reviews the potential impact of the applicable tax and accounting rules on the material elements of our executive compensation program. These factors are considered by the Compensation Committee along with the other factors described
above when making decisions about the annual and long-term incentive compensation awards for our executive officers.
Deductibility of Executive
Compensation
Generally, Section 162(m) of the Code disallows a federal income tax deduction for public corporations of remuneration in excess of
$1 million paid in any taxable year to certain specified executive officers (Covered Employees). For taxable years beginning before January 1, 2018 (i) these executive officers consisted of a public corporations chief
executive officer and up to three other executive officers (other than the chief financial officer) whose compensation is required to be disclosed to stockholders under the Exchange Act because they are such public corporations most
highly-compensated executive officers and (ii) qualifying performance-based compensation was not subject to this deduction limit if specified requirements were met.
Pursuant to the Tax Cuts and Jobs Act of 2017, which was signed into law on December 22, 2017, for taxable years beginning after December 31, 2017, (i) the
remuneration of a public corporations chief financial officer is also subject to the deduction limit, (ii) once an individual is considered a Covered Employee with respect to a taxable year, he or she will be considered a Covered Employee
for all future years, including after termination of employment or death, and (iii) the exemption from the deduction limit for performance-based compensation is no longer available. These changes do not apply to remuneration
provided under a binding written contract in effect on November 2, 2017, which is not materially modified after that date. Consequently, for fiscal years beginning after December 31, 2017, no remuneration in excess of $1 million paid
to a Covered Employee will be deductible.
In designing our executive compensation program and determining the compensation of our executive officers the
Compensation Committee considers a variety of factors, including the potential impact of the Section 162(m) deduction limit. However, the Compensation Committee will not necessarily limit executive compensation to that which is or may be
deductible under Section 162(m). The deductibility of some types of compensation depends upon the timing of an executive officers vesting or exercise of previously granted rights. Further, interpretations of and changes in the tax law,
and other factors beyond the Compensation Committees control also affect the deductibility of compensation.
To maintain flexibility to compensate our
executive officers in a manner designed to promote our short-term and long-term corporate goals, the Compensation Committee has not adopted a policy that all compensation that is subject to Section 162(m) must be deductible. The Compensation
Committee believes that our stockholders interests are best served if its discretion and flexibility in awarding compensation is not restricted, even though some compensation awards may result in
non-deductible
compensation expense. From time to time, the Compensation Committee or our Board of Directors may approve compensation for the Named Executive Officers that is not deductible when it believes
that such compensation is consistent with the goals of our executive compensation program and is in the best interests of the Company and our stockholders.
35
Taxation of Parachute Payments
Sections 280G and 4999 of the Code provide that executive officers and members of our Board of Directors who hold significant equity interests and certain other service
providers may be subject to significant additional taxes if they receive payments or benefits in connection with a
change-in-control
of the Company that exceeds certain
prescribed limits, and that we (or our successor) may forfeit a deduction on the amounts subject to this additional tax. We did not provide any executive officer, including any Named Executive Officer, with a
gross-up
or other reimbursement payment for any tax liability that the executive officer may owe as a result of the application of Sections 280G or 4999 during fiscal 2018, and we have not agreed
and are not otherwise obligated to provide any executive officer with such a
gross-up
or other reimbursement.
Accounting for Stock-Based Compensation
We follow the Financial Accounting
Standard Boards Accounting Standards Codification Topic 718 (FASB ASC Topic 718) for our stock-based compensation awards. FASB ASC Topic 718 requires us to measure the compensation expense for all share-based payment awards made to
our employees and members of our Board of Directors, including options to purchase shares of our common stock and other stock awards, based on the grant date fair value of these awards. This calculation is performed for accounting
purposes and reported in the executive compensation tables required by the federal securities laws, even though the recipient of the awards may never realize any value from their awards.
36
Schedule 1
Reconciliation of GAAP to
Non-GAAP
Measures
The following table presents a reconciliation of our GAAP net earnings and earnings per share to
Non-GAAP
net earnings and earnings per share.
Reconciliation of GAAP Earnings Per Share to
Non-GAAP
EPS for Fiscal Years 2018 and 2017
(Unaudited)
(Dollars in thousands, except
earnings per share)
|
|
|
|
|
|
|
|
|
|
|
For the Twelve Months
Ended
March 31,
|
|
|
|
2018
|
|
|
2017
|
|
Earnings before income taxes
|
|
$
|
709
|
|
|
$
|
8,642
|
|
Income taxes
|
|
|
(22,771
|
)
|
|
|
4,534
|
|
Net earnings
|
|
|
23,480
|
|
|
|
4,108
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.30
|
|
|
|
0.05
|
|
Diluted
|
|
|
0.29
|
|
|
|
0.05
|
|
Excluded items:
|
|
|
|
|
|
|
|
|
Purchased intangible asset amortization (cost of revenue)
|
|
|
23,920
|
|
|
|
18,644
|
|
Non-cash
stock compensation (cost of revenue and operating
expenses)
|
|
|
63,234
|
|
|
|
49,145
|
|
Impairment of goodwill and other
|
|
|
|
|
|
|
1,315
|
|
Restructuring charges and other adjustments (gains, losses, and other)
|
|
|
6,373
|
|
|
|
10,045
|
|
Gain on sales of assets (gains, losses, and other)
|
|
|
|
|
|
|
(2,986
|
)
|
Separation and transformation costs (general and administrative)
|
|
|
20,846
|
|
|
|
8,639
|
|
Accelerated amortization (cost of revenue)
|
|
|
999
|
|
|
|
|
|
Total excluded items
|
|
|
115,372
|
|
|
|
84,802
|
|
Earnings from continuing operations before income taxes and excluding items
|
|
|
116,372
|
|
|
|
93,444
|
|
Income taxes
|
|
|
39,758
|
|
|
|
36,652
|
|
Non-GAAP
net earnings
|
|
|
76,323
|
|
|
|
56,792
|
|
Non-GAAP
earnings per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.97
|
|
|
|
0.73
|
|
Diluted
|
|
|
0.94
|
|
|
|
0.71
|
|
Basic weighted average shares
|
|
|
78,891
|
|
|
|
77,609
|
|
Diluted weighted average shares
|
|
|
81,516
|
|
|
|
79,848
|
|
37
The following tables present a reconciliation of our GAAP Operating Income to Adjusted Operating Income and our GAAP
earnings per share to Adjusted EPS.
Reconciliation of GAAP Operating Income to Adjusted Operating Income
for Fiscal Year 2018 (in thousands)
|
|
|
|
|
Income from Operations
|
|
|
10,599
|
|
Adjustments:
|
|
|
|
|
Purchased intangible asset amortization (cost of revenue)
|
|
|
23,920
|
|
Non-cash
stock compensation (cost of revenue and operating
expenses)
|
|
|
63,234
|
|
Restructuring and merger charges (gains, losses, and other)
|
|
|
6,373
|
|
Separation and transformation costs (general and administrative)
|
|
|
20,846
|
|
Incentive compensation expense
|
|
|
16,756
|
|
Favorable incentive pool variance from operational resource planning changes
|
|
|
3,410
|
|
Total adjustments
|
|
|
135,538
|
|
Adjusted Income from Operations
|
|
|
146,137
|
|
Reconciliation of GAAP Earnings Per Share to Adjusted EPS for Fiscal Year 2018 for PSU
attainment (Unaudited)
(Dollars in
thousands, except earnings per share)
|
|
|
|
|
Earnings from continuing operations before income taxes
|
|
|
709
|
|
Income taxes
|
|
|
(22,771
|
)
|
Net earnings
|
|
|
23,480
|
|
Earnings per share:
|
|
|
|
|
Basic
|
|
|
0.30
|
|
Diluted
|
|
|
0.29
|
|
Excluded items:
|
|
|
|
|
Purchased intangible asset amortization (cost of revenue)
|
|
|
23,920
|
|
Non-cash
stock compensation (cost of revenue and operating
expenses)
|
|
|
63,234
|
|
Restructuring charges (gains, losses, and other)
|
|
|
6,373
|
|
Separation and transformation costs (general and administrative)
|
|
|
20,846
|
|
Accelerated amortization (cost of revenue)
|
|
|
999
|
|
Total excluded items
|
|
|
115,372
|
|
Earnings before income taxes and excluding items
|
|
|
116,081
|
|
Income taxes
|
|
|
39,758
|
|
Non-GAAP
net earnings
|
|
|
76,323
|
|
Non-GAAP
earnings per share:
|
|
|
|
|
Basic
|
|
|
0.97
|
|
Diluted
|
|
|
0.94
|
|
Basic weighted average shares
|
|
|
78,891
|
|
Diluted weighted average shares
|
|
|
81,516
|
|
Non-GAAP
diluted earnings per share
|
|
|
0.94
|
|
Adjustment for budgeted earnings per share of Arbor/Circulate acquisition
2
|
|
|
(0.08
|
)
|
Adjustment for budgeted earnings per share of ITO lost in divestiture
1
|
|
|
0.39
|
|
Adjustment for budgeted earnings per share of Acxiom Impact lost in divestiture
1
|
|
|
0.20
|
|
Adjusted EPS for PSU attainment
|
|
|
1.45
|
|
1
|
Based on targets established at grant date of PSUs issued for the performance period ended on March 31, 2018.
|
2
|
Based on targets reviewed by BOD at acquisition.
|
38
Compensation Committee Report
In connection with its function to oversee Acxioms executive compensation program, the Compensation Committee has reviewed and discussed the Compensation
Discussion and Analysis section of this Form
10-K/A
with management. Based on its review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and
Analysis be included in Acxioms Annual Report on Form
10-K
for the year ended March 31, 2018.
|
Submitted by the Compensation Committee
|
|
William J. Henderson, Chair
|
Timothy R. Cadogan
|
Debora B. Tomlin
|
Compensation Committee Interlocks and Insider Participation
At the end of fiscal year 2018, the Compensation Committee consisted of William J. Henderson (Chair), Timothy R. Cadogan and Debora B. Tomlin. All members of the
Committee, while serving as members of that Committee during fiscal year 2018, were independent directors, and no member was an officer or employee of the Company or a former officer or employee of the Company. No member of the Compensation
Committee serving during fiscal year 2018 was party to a transaction, relationship or arrangement requiring disclosure under Item 404 of Regulation
S-K.
During fiscal year 2018, none of our executive officers
served on the Compensation Committee (or its equivalent) or board of directors of another entity whose executive officer served on our Compensation Committee or Board of Directors.
Summary Compensation Table
The following table shows the compensation earned
by or awarded to our Named Executive Officers in fiscal years ended March 31, 2018, 2017 and 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer
|
|
Fiscal
Year
|
|
|
Salary
|
|
|
Bonus
|
|
|
Stock
Awards
1
|
|
|
Option
Awards
2
|
|
|
Non-Equity
Incentive Plan
Compensation
3
|
|
|
All Other
Compensation
4
|
|
|
Total
|
|
Scott E. Howe
|
|
|
2018
|
|
|
$
|
670,000
|
|
|
|
|
|
|
$
|
4,172,856
|
|
|
$
|
0
|
|
|
$
|
597,000
|
|
|
$
|
7,413
|
|
|
$
|
5,447,269
|
|
Chief Executive Officer & President
|
|
|
2017
|
|
|
$
|
650,000
|
|
|
|
|
|
|
$
|
3,971,519
|
|
|
$
|
0
|
|
|
$
|
1,065,000
|
|
|
$
|
7,950
|
|
|
$
|
5,694,469
|
|
|
|
2016
|
|
|
$
|
650,000
|
|
|
|
|
|
|
$
|
2,702,586
|
|
|
$
|
1,126,015
|
|
|
$
|
854,750
|
|
|
$
|
7,950
|
|
|
$
|
5,341,301
|
|
Warren C. Jenson
|
|
|
2018
|
|
|
$
|
535,000
|
|
|
|
|
|
|
$
|
1,741,472
|
|
|
$
|
0
|
|
|
$
|
433,350
|
|
|
$
|
58,759
|
|
|
$
|
2,768,581
|
|
Chief Financial Officer & Executive Vice President /
President, International
|
|
|
2017
|
|
|
$
|
522,725
|
|
|
|
|
|
|
$
|
1,647,672
|
|
|
$
|
0
|
|
|
$
|
825,000
|
|
|
$
|
24,832
|
|
|
$
|
3,020,229
|
|
|
|
2016
|
|
|
$
|
515,000
|
|
|
|
|
|
|
$
|
1,110,625
|
|
|
$
|
462,128
|
|
|
$
|
673,000
|
|
|
$
|
90,673
|
|
|
$
|
2,851,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James F. Arra
|
|
|
2018
|
|
|
$
|
341,477
|
|
|
|
|
|
|
$
|
2,610,688
|
|
|
$
|
0
|
|
|
$
|
312,828
|
|
|
$
|
120,628
|
1
|
|
$
|
3,385,621
|
|
Co-President &
General Manager,
LiveRamp
|
|
|
2017
|
|
|
$
|
250,000
|
|
|
|
|
|
|
$
|
999,988
|
|
|
$
|
0
|
|
|
$
|
561,226
|
|
|
$
|
136,845
|
2
|
|
$
|
1,948,059
|
|
|
|
2016
|
|
|
$
|
250,000
|
|
|
|
|
|
|
$
|
772,411
|
|
|
$
|
139,957
|
|
|
$
|
369,372
|
|
|
$
|
93,440
|
3
|
|
$
|
1,625,180
|
|
Richard E. Erwin
|
|
|
2018
|
|
|
$
|
435,000
|
|
|
|
|
|
|
$
|
834,796
|
|
|
$
|
0
|
|
|
$
|
226,200
|
|
|
$
|
23,136
|
|
|
$
|
1,519,132
|
|
President & General Manager, Audience Solutions
|
|
|
2017
|
|
|
$
|
418,750
|
|
|
|
|
|
|
$
|
720,860
|
|
|
$
|
0
|
|
|
$
|
425,000
|
|
|
$
|
9,109
|
|
|
$
|
1,573,719
|
|
|
|
2016
|
|
|
$
|
400,000
|
|
|
|
|
|
|
$
|
1,099,424
|
|
|
$
|
406,645
|
|
|
$
|
340,000
|
|
|
$
|
78,801
|
|
|
$
|
2,324,870
|
|
Anneka R. Gupta
|
|
|
2018
|
|
|
$
|
344,602
|
|
|
|
|
|
|
$
|
2,610,688
|
|
|
$
|
0
|
|
|
$
|
189,245
|
|
|
$
|
8,538
|
|
|
$
|
3,153,073
|
|
Co-President &
General Manager,
LiveRamp
|
|
|
2017
|
|
|
$
|
275,000
|
|
|
|
|
|
|
$
|
999,988
|
|
|
$
|
0
|
|
|
$
|
222,469
|
|
|
$
|
166,179
|
4
|
|
$
|
1,663,636
|
|
|
|
2016
|
|
|
$
|
237,500
|
|
|
|
|
|
|
$
|
796,661
|
|
|
$
|
95,376
|
|
|
$
|
49,777
|
|
|
$
|
0
|
|
|
$
|
1,179,314
|
|
S. Travis May
|
|
|
2018
|
|
|
$
|
400,000
|
|
|
|
|
|
|
$
|
3,62,592
|
|
|
$
|
0
|
|
|
$
|
207,309
|
|
|
$
|
7,944
|
|
|
$
|
4,239,846
|
|
Former Chief Growth Officer
|
|
|
2017
|
|
|
$
|
368,750
|
|
|
|
|
|
|
$
|
1,029,812
|
|
|
$
|
0
|
|
|
$
|
400,000
|
|
|
$
|
30,923
|
|
|
$
|
1,829,485
|
|
|
|
2016
|
|
|
$
|
340,000
|
|
|
|
|
|
|
$
|
701,313
|
|
|
$
|
178,890
|
|
|
$
|
310,000
|
|
|
$
|
30,350
|
|
|
$
|
1,560,553
|
|
1
|
These amounts reflect the grant date fair value of awards of RSUs, PSUs and PRSUs. We calculated the amounts in
accordance with financial statement reporting rules. For RSUs granted in fiscal year 2018, the amount was determined by reference to quoted market
|
39
|
prices for the shares on their grant date, which was $26.45 for Mr. Arra, Ms. Gupta and Mr. Mays June 28 grants, $26.57 for Mr. Erwin and Mr. Jensons
June 12th grants, $26.26 for Mr. Howes June 16th grant and $23.89 for Mr. Arra and Ms. Guptas September 12th grants. For PSUs granted in fiscal year 2018, we estimated each PSU grant date fair value to be $26.45 for
Mr. Arra and Ms. Guptas June 28 grants, and one of Mr. Mays June 28 grants, $28.22 for Mr. Howe, Mr. Jenson and Mr. Erwins June 12th grant, one of Mr. Mays June 28 grants and
$23.89 for Mr. Mays September 12th grant, in each case using a Monte Carlo simulation model. The amount reported for each PSU is based on the probable outcome of the underlying performance conditions, measured as of the grant date (100%
of target value). For Mr. Erwins inducement PSUs granted in fiscal year 2016, we estimated the grant date fair value to be $19.07 using a Monte Carlo simulation model, measured at 100% of target value. For Mr. Mays PRSUs
granted in fiscal year 2016, we estimated the grant date fair value to be $2.94, using a Monte Carlo simulation model and the maximum number of shares that can be earned. The grant date fair value for the fiscal year 2018 awards (including both RSUs
and PSUs) at the highest level of performance for each executive is Mr. Howe $6,743,275, Mr. Jenson $2,638,416, Mr. Arra $3,063,142, Mr. Erwin $1,263,204, Ms. Gupta $3,063,142 and Mr. May $5,460,353.
|
2
|
These amounts reflect the grant date fair value of awards of stock options. We calculated the option amounts in
accordance with financial statement reporting rules using a customized binomial lattice option pricing model with the following weighted-average assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
Dividend Yield
|
|
Risk-Free Interest
Rate
|
|
Expected Duration
|
|
Expected Volatility
|
|
Suboptimal Exercise
Multiple
|
2016
|
|
0%
|
|
2.20%
|
|
4.5 years
|
|
40%
|
|
1.4
|
|
|
|
|
|
|
|
|
|
|
|
3
|
These amounts represent annual cash incentive awards earned by the Named Executive Officers under the Cash Incentive Plan
based on Company results as well as Mr. Arras earnings from the Connectivity (or LiveRamp) Division Incentive Plan. For more information regarding how these determinations were made, see Section 4 of the Compensation Discussion and
Analysis.
|
4
|
The amounts disclosed in the All Other Compensation column for fiscal year 2018 includes the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer
|
|
401(k)
Matching
Contributions
|
|
|
Non-qualified deferred
compensation plans/
SERP matching
contributions
|
|
|
Other
|
|
|
Total
|
|
Scott E. Howe
|
|
$
|
7,413
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
7,413
|
|
Warren C. Jenson
|
|
$
|
7,504
|
|
|
$
|
0
|
|
|
$
|
51,255
|
a
|
|
$
|
58,759
|
|
James F. Arra
|
|
$
|
9,268
|
|
|
$
|
0
|
|
|
$
|
111,360
|
b
|
|
$
|
120,628
|
|
Richard E. Erwin
|
|
$
|
8,239
|
|
|
$
|
0
|
|
|
$
|
14,897
|
c
|
|
$
|
23,136
|
|
Anneka R. Gupta
|
|
$
|
8,538
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
8,538
|
|
S. Travis May
|
|
$
|
7,944
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
7,944
|
|
a)
|
Represents expenses associated with Mr. Jensons international assignment in his role as President,
International ($47,464), cell phone allowance ($2,688) and fitness reimbursement ($1,103).
|
b)
|
Represents expenses associated with tax assistance to cover the taxes for imputed income for airfare and apartment rental
($109,680) and cell phone allowance ($1,680).
|
c)
|
Represents expense associated with Presidents club top sellers appreciation trip ($12,065), cell phone
allowance ($2,688) and spot award ($144).
|
40
Grants of Plan-Based Awards for Fiscal Year 2018
The following table shows grants of plan-based awards made to our Named Executive Officers during fiscal 2018.
Non-equity
incentive plan awards were granted under the 2010 Cash Incentive Plan and stock awards were granted under the Amended and Restated 2005 Equity Compensation Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named
Executive
Officers
|
|
|
|
Estimated Possible Payouts Under Non-Equity
Incentive Plan Awards
|
|
|
Estimated Future Payouts Under
Equity Incentive Plan
1
|
|
|
All other
Stock
Awards:
Number
of
Shares
of Stock
or Units
(#)
|
|
|
All other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
|
|
|
Exercise
Or Base
Price of
Option
Awards
($/SH)
|
|
|
Grant Date
Fair Value
of Stock
and Option
Awards ($)
|
|
|
Grant
Date
|
|
Threshold
($)
|
|
|
Target
($)
|
|
|
Maximum
($)
|
|
|
Threshold
(#)
|
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
Scott E. Howe
|
|
N/A
|
|
$
|
184,250
|
|
|
$
|
737,000
|
|
|
$
|
1,474,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/16/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,771
|
|
|
|
91,085
|
|
|
|
182,170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,513,946
|
|
|
6/16/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61,022
|
|
|
|
|
|
|
|
|
|
|
$
|
1,602,438
|
|
Warren C. Jenson
|
|
N/A
|
|
$
|
133,750
|
|
|
$
|
535,000
|
|
|
$
|
1,070,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,946
|
|
|
|
31,784
|
|
|
|
63,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
896,944
|
|
|
6/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,784
|
|
|
|
|
|
|
|
|
|
|
$
|
844,527
|
|
James F. Arra
|
|
N/A
|
|
$
|
11,666
|
|
|
$
|
46,666
|
|
|
$
|
93,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
$
|
33,750
|
|
|
$
|
275,000
|
|
|
|
uncapped
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/28/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,277
|
|
|
|
8,553
|
|
|
|
25,659
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
226,227
|
|
|
6/28/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,404
|
|
|
|
|
|
|
|
|
|
|
$
|
301,636
|
|
|
9/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
87,184
|
|
|
|
|
|
|
|
|
|
|
$
|
2,082,826
|
|
Richard E. Erwin
|
|
N/A
|
|
$
|
70,688
|
|
|
$
|
282,750
|
|
|
$
|
565,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,795
|
|
|
|
15,181
|
|
|
|
30,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
428,408
|
|
|
6/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
114
|
|
|
|
|
|
|
|
|
|
|
$
|
3,029
|
|
|
6/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,181
|
|
|
|
|
|
|
|
|
|
|
$
|
403,359
|
|
Anneka R. Gupta
|
|
N/A
|
|
$
|
37,916
|
|
|
$
|
151,666
|
|
|
$
|
303,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
$
|
6,750
|
|
|
$
|
68.750
|
|
|
|
uncapped
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/28/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,277
|
|
|
|
8,553
|
|
|
|
25,659
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
226,227
|
|
|
6/28/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,404
|
|
|
|
|
|
|
|
|
|
|
$
|
301,636
|
|
|
9/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
87,184
|
|
|
|
|
|
|
|
|
|
|
$
|
2,082,826
|
|
S. Travis May
|
|
N/A
|
|
$
|
65,000
|
|
|
$
|
260,000
|
|
|
$
|
520,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/28/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,503
|
|
|
|
19,006
|
|
|
|
57,018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
536,349
|
|
|
6/28/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,752
|
|
|
|
19,006
|
|
|
|
38,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
502,709
|
|
|
6/28/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,006
|
|
|
|
|
|
|
|
|
|
|
$
|
502,709
|
|
|
9/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,592
|
|
|
|
87,184
|
|
|
|
98,082
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,082,826
|
|
1
|
The fair value of the PSUs was determined using a Monte Carlo simulation model based on the probable outcome of the
underlying performance conditions, measured as of the grant date (100% of target value). For RSU awards, the fair value was determined by reference to quoted market prices on the date of grant for the shares of our common
stock.
|
2
|
The Committee approved a discretionary cash incentive plan at the end of fiscal 2018 that provides incentives for certain
employees, including Mr. Erwin, in connection with the sale of Acxiom Marking Solutions. Please see Compensation Discussion and AnalysisAcxiom Marketing Solutions Incentive Plan above.
|
For a description of bonus opportunities under the Cash Incentive Plan, see Annual Cash Incentives in Section 4: of the Compensation Discussion
and Analysis. For a description of PSU awards and RSU awards, see Long-Term Incentive Compensation in Section 4: of the Compensation Discussion and Analysis.
41
Outstanding Equity Awards at 2018 Fiscal Year End
The following table shows equity awards that we have made to our Named Executive Officers that were outstanding as of March 31, 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
1
|
|
|
Stock Awards
|
|
|
|
|
|
|
Number of Securities Underlying
Unexercised Options (#)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
Exercise
Price ($)
|
|
|
Option
Expiration
Date
|
|
|
Share or
Unit Grant
Date
|
|
|
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units
or
Other Rights
That Have
Not Vested
(#)
2
|
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value
of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)
3
|
|
|
Number
of
Shares
or Units
of
Stock
That
Have
Not
Vested
(#)
4
|
|
|
Market Value
of Shares or
Units of Stock
That Have
Not
Vested
($)
3
|
|
Name
|
|
Grant Date
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
Scott E. Howe
|
|
|
7/29/2011
|
|
|
|
123,819
|
|
|
|
|
|
|
$
|
13.74
|
|
|
|
7/29/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/29/2011
|
|
|
|
221,106
|
|
|
|
|
|
|
$
|
13.74
|
|
|
|
7/29/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/21/2012
|
|
|
|
164,204
|
|
|
|
|
|
|
$
|
13.28
|
|
|
|
5/21/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/23/2013
|
|
|
|
136,196
|
|
|
|
|
|
|
$
|
21.46
|
|
|
|
5/23/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/20/2014
|
|
|
|
115,947
|
|
|
|
38,649
|
|
|
$
|
21.17
|
|
|
|
5/20/2024
|
|
|
|
5/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
13,536
|
|
|
$
|
307,403
|
|
|
|
5/20/2015
|
|
|
|
87,423
|
|
|
|
87,424
|
|
|
$
|
17.49
|
|
|
|
5/20/2025
|
|
|
|
5/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
32,590
|
|
|
$
|
740,119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/24/2016
|
|
|
|
102,306
|
|
|
$
|
2,323,369
|
|
|
|
51,153
|
|
|
$
|
1,161,685
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/12/2017
|
|
|
|
91,085
|
|
|
$
|
2,068,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/16/2017
|
|
|
|
|
|
|
|
|
|
|
|
61,022
|
|
|
$
|
1,385,810
|
|
Warren C. Jenson
|
|
|
1/13/2012
|
|
|
|
26,934
|
|
|
|
|
|
|
$
|
13.40
|
|
|
|
1/13/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/13/2012
|
|
|
|
157,024
|
|
|
|
|
|
|
$
|
13.40
|
|
|
|
1/13/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/21/2012
|
|
|
|
61,452
|
|
|
|
|
|
|
$
|
13.28
|
|
|
|
5/21/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/23/2013
|
|
|
|
45,460
|
|
|
|
|
|
|
$
|
21.46
|
|
|
|
5/23/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/20/2014
|
|
|
|
47,038
|
|
|
|
15,680
|
|
|
$
|
21.17
|
|
|
|
5/20/2024
|
|
|
|
5/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
5,487
|
|
|
$
|
124,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/27/2015
|
|
|
|
111,111
|
|
|
|
|
|
|
|
12,500
|
|
|
$
|
283,875
|
|
|
|
5/20/2015
|
|
|
|
35,879
|
|
|
|
35,880
|
|
|
$
|
17.49
|
|
|
|
5/20/2025
|
|
|
|
5/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
13,392
|
|
|
$
|
304,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/24/2016
|
|
|
|
35,897
|
|
|
$
|
815,221
|
|
|
|
26,922
|
|
|
$
|
611,399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/12/2017
|
|
|
|
31,785
|
|
|
$
|
721,837
|
|
|
|
31,785
|
|
|
$
|
721,837
|
|
James F. Arra
|
|
|
3/27/2013
|
|
|
|
110,009
|
|
|
|
|
|
|
$
|
0.85
|
|
|
|
3/26/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/24/2013
|
|
|
|
11,000
|
|
|
|
|
|
|
$
|
0.85
|
|
|
|
7/23/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2014
|
|
|
|
33,002
|
|
|
|
|
|
|
$
|
2.58
|
|
|
|
1/20/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/29/2016
|
|
|
|
18,336
|
|
|
|
44,871
|
|
|
$
|
21.32
|
|
|
|
6/29/2026
|
|
|
|
6/29/2016
|
|
|
|
|
|
|
|
|
|
|
|
6,534
|
|
|
$
|
148,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/28/2017
|
|
|
|
8,553
|
|
|
$
|
194,239
|
|
|
|
11,404
|
|
|
$
|
258,985
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
87,184
|
|
|
$
|
1,979,949
|
|
Richard E. Erwin
|
|
|
4/13/2015
|
|
|
|
31,785
|
|
|
|
10,596
|
|
|
$
|
19.07
|
|
|
|
4/13/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/13/2015
|
|
|
|
21,190
|
|
|
|
|
|
|
$
|
19.07
|
|
|
|
4/13/2025
|
|
|
|
4/13/2015
|
|
|
|
41,929
|
|
|
$
|
952,208
|
|
|
|
3,930
|
|
|
$
|
89,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/24/2016
|
|
|
|
15,705
|
|
|
$
|
356,661
|
|
|
|
11,778
|
|
|
$
|
267,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/12/2017
|
|
|
|
15,181
|
|
|
$
|
344,761
|
|
|
|
57
|
|
|
$
|
1,294
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
15,181
|
|
|
$
|
344,761
|
|
Anneka R. Gupta
|
|
|
1/24/2012
|
|
|
|
797
|
|
|
|
|
|
|
$
|
1.10
|
|
|
|
1/23/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/13/2012
|
|
|
|
4,517
|
|
|
|
|
|
|
$
|
0.85
|
|
|
|
12/12/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/24/2013
|
|
|
|
452
|
|
|
|
|
|
|
$
|
0.85
|
|
|
|
7/23/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/25/2014
|
|
|
|
11,559
|
|
|
|
|
|
|
$
|
2.58
|
|
|
|
3/24/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/29/2016
|
|
|
|
18,336
|
|
|
|
44,871
|
|
|
$
|
21.32
|
|
|
|
6/29/2026
|
|
|
|
6/29/2016
|
|
|
|
|
|
|
|
|
|
|
|
6,309
|
|
|
$
|
143,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/28/2017
|
|
|
|
8,553
|
|
|
$
|
194,239
|
|
|
|
11,404
|
|
|
$
|
258,985
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
87,184
|
|
|
$
|
1,979,949
|
|
S. Travis May
|
|
|
2/20/2013
|
|
|
|
27,901
|
|
|
|
|
|
|
$
|
0.85
|
|
|
|
2/19/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/25/2014
|
|
|
|
41,973
|
|
|
|
|
|
|
$
|
2.58
|
|
|
|
3/24/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/11/2014
|
|
|
|
12,798
|
|
|
|
4,267
|
|
|
$
|
19.18
|
|
|
|
11/11/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/20/2015
|
|
|
|
13,888
|
|
|
|
13,890
|
|
|
$
|
17.49
|
|
|
|
5/20/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/24/2016
|
|
|
|
22,436
|
|
|
$
|
509,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/28/2017
|
|
|
|
19,006
|
|
|
$
|
431,626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/28/2017
|
|
|
|
19,006
|
|
|
$
|
431,626
|
|
|
|
19,006
|
|
|
$
|
431,626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/12/2017
|
|
|
|
87,184
|
|
|
$
|
1,979,949
|
|
|
|
|
|
|
|
|
|
42
1
|
The vesting schedule for stock options granted during and after fiscal year 2008 is 25% per year beginning on the first
anniversary of the grant date.
|
2
|
PSUs vest subject to attainment of performance goals with the number of shares earned ranging from zero to 200% of the
award. In the case of fiscal 2016 grants of PSUs, each recipient vested at 200% based on fiscal 2018 TSR targets. In the case of fiscal 2017 grants of performance units, each recipient may become vested in a number of shares based on the TSR of our
common stock compared to the TSR of the S&P Midcap 400 index. For Mr. Jensons PRSUs, we estimated the grant date fair value to be $5.33, respectively, using a Monte Carlo simulation model. The PRSUs awarded to Mr. Jenson
(March 2015) vested on May 14, 2018 at 40.8275% attainment for 45,364 shares. For the PSU awards for Messers. May and Arra and Ms. Gupta (June 2017), vested on March 31, 2018 at 53.27% for the first tranche of these awards.
|
3
|
This value was determined by multiplying the number of unvested shares or units by the closing price of our common stock
on March 29, 2018 (the last day of the 2018 fiscal year), which was $22.71.
|
4
|
Represents awards of RSUs that vest over a four-year period in equal increments beginning on or around the first
anniversary of the grant date, except for awards granted beginning in fiscal 2017 that vest 25% after the first year, and then 6.25% quarterly until fully vested. The RSU awards granted to Mr. Arra and Ms. Gupta in September 2017 in
connection with their promotions will vest 50% on the first anniversary of the grant date with the remainder vesting quarterly thereafter through the second anniversary of the grant date.
|
Option Exercises and Stock Vested During Fiscal Year 2018
The following
table shows the value realized by our Named Executive Officers on stock awards vesting during fiscal year 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
Name
|
|
Number of Shares
Acquired on Exercise (#)
|
|
|
Value Realized On
Exercise ($)
|
|
|
Number of Shares Acquired
on Vesting (#)
|
|
|
Value Realized on
Vesting ($)
1
|
|
Scott E. Howe
|
|
|
|
|
|
|
|
|
|
|
233,627
|
|
|
$
|
5,597,927
|
|
Warren C. Jenson
|
|
|
|
|
|
|
|
|
|
|
109,404
|
|
|
$
|
2,706,177
|
|
James F. Arra
|
|
|
|
|
|
|
|
|
|
|
11,164
|
|
|
$
|
284,980
|
|
Richard E. Erwin
|
|
|
|
|
|
|
|
|
|
|
7,915
|
|
|
$
|
208,903
|
|
Anneka R. Gupta
|
|
|
|
|
|
|
|
|
|
|
11,679
|
|
|
$
|
299,112
|
|
S. Travis May
|
|
|
7,945
|
|
|
$
|
218,408
|
|
|
|
45,310
|
|
|
$
|
1,083,061
|
|
1
|
The stock awards values were determined by multiplying the number of shares acquired on vesting by the closing market
price of the Companys common stock on the vesting date.
|
Nonqualified Deferred Compensation During Fiscal Year 2018
The Company maintains the Acxiom Corporation
Non-Qualified
Deferral Plan, or SERP, that includes participation by our NEOs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Executive
Contributions in Fiscal
Year 2018
|
|
|
Registrant
Contributions in Fiscal
Year 2018
|
|
|
Aggregate Earnings in
Fiscal Year 2018
|
|
|
Aggregate
Withdrawals/
Distributions
|
|
|
Aggregate Balance at
3/31/2018
1
|
|
Scott E. Howe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warren C. Jenson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
78,470
|
|
James F. Arra
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
309,435
|
|
Richard E. Erwin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anneka R. Gupta
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S. Travis May
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
None of the executives contributed to the plan during fiscal year 2018. Mr. Jensons balance was previously
reported in the Summary Compensation Table in the years any contributions were made.
|
Nonqualified Deferral Plan or SERP
The purpose of the SERP is to provide eligible employees with the ability to defer cash compensation in excess of certain limits that apply under the Companys
401(k) plan and to receive a corresponding matching contribution. Participants may defer up to 90% of their
pre-tax
income. Under both the SERP and the 401(k) plan, the Company matches a participants
combined contributions at a rate of $0.50 on the dollar up to the first 6% of the
43
participants compensation. The matching contribution for the employees SERP deferrals up to the annual limit established by IRS regulations is made in cash to the employees SERP
account. For SERP deferrals in excess of annual IRS limits, the matching contribution is provided under the
Non-Qualified
Matching Contribution Plan and is made in shares of our common stock. In each case, the
rate of matching contribution is the same. The matching contribution vests at
one-third
after one year of employment and
one-third
each year thereafter until fully
vested. Vesting is accelerated in the event of death, disability or retirement.
The investment choices for participant contributions under the SERP are similar to
those provided under the 401(k) plan. A participants contributions are deemed to be invested in certain funds in accordance with his or her election, and earnings are calculated based on the performance of the selected funds. The participant
does not actually own any shares in the investments.
Prior to deferring compensation, participants must elect the time and manner of their account payouts.
Benefits are paid as elected by the participant at the time of the deferral in the form a single lump sum payment, equal annual installments over a period of years or an annuity. Under limited circumstances, participants may change the time and
manner of their account payouts or receive distributions on account of a financial hardship or other conditions.
Potential Payments Upon Termination or Change
in Control
The tables and narrative below reflect the amount of compensation payable to each of the Named Executive Officers in the event of termination of the
executives employment under the various circumstances described. The amounts shown assume that the termination was effective as of March 31, 2018. These are only estimates of the amounts which would be paid to the Named Executive Officer
upon their termination. The actual amounts to be paid can only be determined at the time of an executives actual separation from the Company. Payments or benefits generally available to all employees on similar terms are not described.
Potential Payments Upon Termination
Regardless of the manner in which a
Named Executive Officer employment terminates, he or she may be entitled to receive amounts earned during his/her term of employment. These amounts include:
|
|
|
base salary earned through the date of termination; and
|
|
|
|
amounts accrued and vested through the Companys 401(k) plan, SERP or Deferred Plan.
|
Employment Agreements.
Mr. Howe entered into a new employment agreement with the Company effective February 14, 2018 (the
Howe
Agreement
), and Mr. Jenson entered into a new employment agreement with the Company effective February 14, 2018 (the
Jenson Agreement
and, together with the Howe Agreement, the
Employment
Agreements).
Under the terms of the Employment Agreements, Mr. Howe and Mr. Jenson are entitled to termination payments if either of them is terminated by us without cause or if either of them resigns for good reason. For this
purpose cause is generally defined to include a willful failure to substantially perform duties following a cure period, intentional misconduct or gross negligence that is materially injurious to the Company, a conviction of a felony or
a material breach of the agreement or other policy that remains following a cure period, and good reason is generally defined to include a material reduction or change in title, position or responsibilities, a reduction in salary, breach
of the agreement by the Company that remains following a cure period, and, in the Jenson Agreement, a material change in his reporting relationship or a requirement for relocation more than 30 miles away. Additionally, the Employment Agreements
provide for certain payments in the case of
non-renewal,
change in control, and death and disability.
Severance
Policy.
On November 9, 2010, the Company adopted the Acxiom Corporation 2010 Executive Severance Policy (the
Severance Policy
), as amended December 18, 2017, which provides certain benefits to all officers of the
Company designated as executive officers for purposes of Section 16 of the Securities Exchange Act of 1934, except for those officers with employment agreements in effect, in the event of a without cause termination or following a change in
control without termination, a without cause termination or resignation for good reason. For this purpose, cause is generally defined to include a willful failure to substantially perform duties following a cure period, willful
misconduct, gross negligence that is materially injurious to the Company, a conviction of a felony or fraud crime, or a material breach of the Severance Policy or other policy that remains after a cure period. As of March 31, 2018,
Mr. Arra, Mr. Erwin and Ms. Gupta are covered by the terms of the Severance Policy.
44
Change in Control.
The Employment Agreements, Severance Policy, SVP Severance Policy, and 2005 Plan provide for
certain payments and/or benefits upon the occurrence of a change in control of the Company. The 2005 Plan generally defines a change in control as a transaction, as the Compensation Committee or Board of Directors may determine in their discretion,
involving (i) the consummation of a reorganization, merger, consolidation or similar transaction involving the Company (other than such a transaction in which our stockholders immediately prior to the transaction own more than 50% of the
combined voting power entitled to vote in the election of directors of the surviving corporation), (ii) a sale of all or substantially all of the Companys assets, the liquidation or dissolution of the Company, or (iii) the acquisition of
a significant percentage (no less than beneficial ownership of 20%) of the voting power of the Company. The Severance Policy, SVP Severance Policy and Employment Agreements generally provide that a change in control includes (i) an acquisition
of any Company securities entitled to vote generally in the election of directors by a person immediately after which such person has beneficial ownership of 30% or more of the combined voting power of the Companys then-outstanding voting
securities (excluding certain acquisitions that would not trigger a change in control), (ii) individuals who constitute the Board of Directors of the Company cease for any reason to constitute at least a majority of our Board of Directors (with
certain exceptions), or (iii) consummation of reorganization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company, or the sale or other disposition of all or substantially all of the
Companys assets, or the acquisition of assets or stock of another corporation, unless immediately following the applicable transaction, (A) the
pre-transaction
stockholders beneficially own at least
50% of the post-transaction combined voting power in substantially the same proportions as before the transaction, (B) members of the
pre-transaction
Board of Directors comprise at least a majority of the
post-transaction Board of Directors, and (C) no person (with certain exceptions) has beneficial ownership of 30% or more of the combined voting power of the surviving corporations then-outstanding voting securities.
However, in 2018, the Company amended the 2005 Plan to remove the Compensation Committee and Board of Directors discretion in determining whether a change in
control has occurred and provided for revised treatment of outstanding equity awards under the 2005 Plan upon a change in control. At the same time, the Compensation Committee authorized our management to make conforming amendments to our other
equity compensation plans, to ensure that equity awards granted pursuant to such plans were treated consistently among all recipients of such awards. In addition, the Compensation Committee amended the 2005 Plan, Severance Policy and SVP Severance
Policy, as well as the outstanding award agreements for PSU awards granted in fiscal 2017 and fiscal 2018 to provide for consistent and coordinated treatment of PSU awards in connection with a change in control of the Company. Pursuant to these
amendments:
|
|
|
the applicable performance period for such PSU awards will be truncated,
|
|
|
|
the number of PSUs that become eligible to vest will be determined by the degree of achievement of the applicable
performance objectives as of the change in control date, and
|
|
|
|
the number of PSUs that were determined to be eligible to vest will be treated as unvested RSUs, and if assumed or
substituted for by the acquiring or surviving entity (or an affiliate of such entity), will convert into RSUs of equal value to be settled in cash or shares by the acquiring or surviving entity (as determined pursuant to the definitive agreement
relating to the change in control). If the executive officer remains employed with the acquiring or surviving entity through the end of the original performance period, the RSUs (i.e., the converted PSU awards) will become fully vested. Further, if
within 24 months following a change in control, the executive officers employment is terminated without cause, he or she resigns for good reason, or if he or she dies or becomes disabled, the RSUs (i.e., the converted PSU awards), to the
extent unvested, will become fully vested. If the RSU awards (i.e., the converted PSU awards) are not appropriately assumed or substituted by the acquiring or surviving entity (or an affiliate of such entity), then such converted RSU awards will
fully vest in accordance with the terms of the 2005 Plan.
|
Moreover, in anticipation of the Potential Sale, in 2018, the Committee clarified its
interpretation of change in control as follows: (i) a Potential Sale would constitute a change in control for purposes of the 2005 Plan and awards thereunder; (ii) for employees who, following a Potential Sale remain employed by us, a
Potential Sale would not constitute a change in control for purposes of the Employment Agreements, the Severance Policy, or the SVP Severance Policy, except in two limited circumstances which would entitle eligible employees to claim a post-change
in control good reason termination, as discussed above in Modification of Post-Employment
45
Compensation Arrangements; and (iii) for employees who, following a Potential Sale, go with the division sold in a Potential Sale, a Potential Sale would be deemed to
constitute a change in control for purposes of the Severance Policy or the SVP Severance Policy, entitling such individuals to the enhanced severance payments and benefits in accordance with the terms of those arrangements.
Terminations Without Cause, Resignation for Good Reason or
Non-Renewal
of Employment Agreements
Employment Agreements.
In the event of a qualifying termination (other than
non-renewal
of employment agreement for
Mr. Jenson), subject to the Company receiving a general release of claims from him, each of Mr. Howe and Mr. Jenson will be entitled to receive: (i) all base salary and benefits payable through the date of termination,
(ii) the amount of any cash bonus related to any fiscal year ending before the date of termination that has been earned but remains unpaid, (iii) a prorated bonus for the fiscal year in which termination occurs, (iv) an amount equal
to 200% of base salary, (v) an amount equal to 200% of average annual bonus based on the preceding two years bonus payments prior to the fiscal year in which the termination occurs, (vi) any unpaid benefits to which he is entitled under
any plan, policy or program of the Company applicable to him as of the termination according to the terms of the plan, policy or program, and (vii) vesting of a prorated portion of PSUs that are earned but unvested or for which the performance
period is ongoing at the time of termination and at least one year of the performance period has elapsed. If the qualifying termination is a
non-renewal
of his employment agreement, the percentage for
Mr. Jenson in (iv) and (v) above will be 100% and all other provisions above will remain the same.
The amounts referred to in clauses (i)-(iv) above are
to be paid immediately following a waiting period which is generally 30 days following the termination date but which will be extended to 60 days if the termination is in connection with an exit incentive program or other employee termination
program offered to a group or class of employees as defined under the Older Worker Benefit Protection Act (the
Delay Period
). Payment of the prorated fiscal year bonus will occur 90 days after the end of the fiscal year in which
the termination occurs. Vesting of PSUs will occur immediately following expiration of the Delay Period for PSUs that are earned but unvested at the time of termination and as soon as administratively practicable following the close of the
performance period for PSUs related to performance periods that are
on-going
at the time of termination and for which at least one year of the performance period has elapsed, based on the Companys actual
performance.
Severance Policy.
Under the Severance Policy, if Mr. Arra, Mr. Erwin or Ms. Gupta is involuntarily terminated by the Company
without cause other than in connection with a change in control, upon executing a general release of claims against the Company which include
one-year
non-competition
and
non-solicitation
restrictions, he or she will receive an amount equal to 100% of base salary, 100% of his or her average annual bonus based on their bonus payment for the preceding two years prior to
termination (using target bonus for the portion of time he or she has been employed if less than two years), a prorated bonus based on the actual fiscal year results and a prorated portion of any PSUs (i) that are earned but unvested or
(ii) for which the performance period is ongoing at the time of termination and for which at least one year of the performance period has elapsed. The base salary and average annual bonus will be paid on regular paydays during the 12 months
following the Delay Period. The prorated bonus will be paid within 90 days after the end of the fiscal year in which the termination occurs or following the Delay Period, whichever is later. Vesting of PSUs will occur within 30 days of the
expiration of the Delay Period for PSUs earned but unvested at the time of termination and as soon as administratively practicable following the close of the performance period for PSUs related to performance periods that are ongoing at the time of
termination and for which at least one year of the performance period has elapsed, based on actual Company performance.
Retirement or Voluntary Termination
In the event of retirement or voluntary termination, Mr. Howe, Mr. Jenson, Mr. Arra, Mr. Erwin and Ms. Gupta will receive earned but
unpaid base compensation through his or her retirement or termination date and any amounts accrued and vested to which he or she is otherwise entitled under a plan, program or policy of the Company.
Death or Disability
In the event of death or disability, in addition to the
payment of earned but unpaid base salary and amounts accrued and vested through the Company retirement plans, Mr. Howe, Mr. Jenson, Mr. Arra, Mr. Erwin and Ms. Gupta will receive benefits under the Companys life
insurance plan or disability plan, as applicable. Also, upon death or six months following commencement of long-term disability payments, all unvested RSUs and stock
46
options will vest. In addition, all PSUs related to a completed performance period will vest based on actual Company attainment of the specified performance targets and a
pro-rated
portion of PSUs related to an uncompleted performance period will vest, provided that at least one year of the performance period has elapsed, with payment based on actual performance at the end of the
performance period.
Employment Agreements.
The Employment Agreements provide that in the event of termination as a result of death or disability, each of
Mr. Howe and Mr. Jenson or their respective estates would be entitled to receive: (i) all base salary and benefits payable through the date of termination, (ii) any unpaid benefits to which he is entitled under any plan, policy
or program of the Company applicable to him as of the date of termination according to the terms of the plan, policy or program, (iii) the amount of any cash bonus related to any fiscal year ending before the date of termination that has been
earned but remains unpaid, and (iv) the amount of any target cash bonus for the fiscal year in which the date of termination occurs, prorated based on the portion of the applicable year he worked for the Company before the date of termination.
The amounts in (i)-(iii) would be paid at the time it would otherwise have been paid had he remained employed. The amount in (iv) would be paid within 60 days of the date of termination.
Potential Payments Upon Change in Control
Employment Agreements.
Under the terms of the Employment Agreements, Mr. Howe and Mr. Jenson are eligible to receive change in control payments if they are terminated from employment by the Company without cause within 24 months following a change in control, or
if they resign for good reason within 24 months following a change in control. The amount payable in the event of a qualifying termination, subject to the Company receiving a general release of claims, is (i) all earned base salary and benefits
payable through the date of termination, (ii) the amount of any cash bonus related to any fiscal year ending before the date of termination that has been earned but remains unpaid, (iii) an amount equal to 300% of the current base salary
under the Howe Agreement and 200% of the current base salary under the Jenson Agreement, (iv) an amount equal to 300% of average annual bonus based on the preceding two years bonus payments prior to the fiscal year in which the termination
occurs under the Howe Agreement, and an amount of 200% of average annual bonus based on the preceding two years bonus payments prior to the fiscal year in which the termination occurs under the Jenson Agreement, (v) prorated bonus for the
fiscal year in which the termination occurs based on actual fiscal year results and (vi) any other unpaid benefits to which they are entitled under any plan, policy or program of the Company. In addition, all equity awards (other than PSUs)
which are outstanding but unvested would vest. Payments under clauses (i)-(iv) would be made in a lump sum immediately following the Delay Period.
For PSU awards,
unless provided otherwise in the applicable grant documents, upon the consummation of a Change in Control, the applicable performance period will be truncated, and a number of PSUs will become eligible to vest based on the degree of achievement of
the applicable performance objectives as of the Change in Control Date. The number of PSUs that were determined to be eligible to vest will be treated as unvested RSUs, and if assumed or substituted for by the acquiring or surviving entity in
accordance with the terms of the definitive agreements relating to the Change in Control will convert into RSUs (or other compensatory arrangements) of equal value to be settled in cash or shares by the acquiring or surviving entity (or an affiliate
of such entity), as applicable. In the event Mr. Howe or Mr. Jenson, as applicable, remains employed with the acquiring or surviving entity (or an affiliate of such entity), through the end of the original performance period, the RSUs
(i.e., the converted PSUs) will become fully vested and will be settled within 30 days of the performance period end date. If the RSU awards (i.e., the converted PSU awards) are not appropriately assumed or substituted by the acquiring or surviving
entity (or an affiliate thereof), then such RSU awards will fully vest in accordance with the terms of the 2005 Plan.
In the event that Mr. Howe or
Mr. Jenson is terminated without cause or resigns for good reason following the public announcement of a Board-approved agreement to effect a change in control but prior to the consummation of the change in control, upon the consummation of the
change in control Mr. Howe or Mr. Jenson would receive, in addition to any amounts they received for a without-cause or good-reason termination: (i) an amount equal to the value of all unvested equity that was forfeited upon
termination, except PSUs, that would have vested on or prior to a termination without cause or for good reason following a change in control had he remained employed until the change in control using the value of the Companys common stock
implied by the change in control price of the stock, and (ii) an amount equal to the difference between what was actually paid with respect to PSUs and that which would have been paid had he remained employed through the date of the change in
control. Additionally, Mr. Howe shall be entitled to a payment equal to 100% of his then current base salary and 100% of his average annual bonus for the
two-year
preceding the fiscal year in which the
termination occurred. These payments shall be made on the later of the expiration of the Delay Period applicable to the actual termination or contemporaneously with the change in control (or within 10 days thereafter).
47
Severance Policy.
Under the Severance Policy, benefits are due if Mr. Arra, Mr. Erwin or Ms. Gupta is
terminated by the Company without cause or resigns for good reason (which includes a resignation following a demotion, reduction in salary, relocation, or material reduction in responsibilities, authority or duties, as set forth in the Severance
Policy) within a
two-year
period following a change in control. Upon execution of a general release of claims against the Company which includes
one-year
non-competition
and
non-solicitation
restrictions, benefits paid would include: (i) 150% of the base salary (ii) 150% of the average annual bonus for the two years preceding
the fiscal year in which the termination occurs, (iii) a prorated bonus based on the actual fiscal year results for the fiscal year in which the termination occurs and (iv) vesting of all equity award except for PSUs. Benefits under
clauses (i) and (ii) and would be paid in a lump sum on the next regular payroll cycle following the expiration of the Delay Period; benefits under clause (iii) would be paid within 90 days after the end of the fiscal year in which the
termination occurs, and benefits under clause (iv) would be processed within 30 days of the expiration of the Delay Period. Regardless of whether Mr. Arra, Mr. Erwin or Ms. Gupta is terminated, at the time of a change in control,
the applicable performance period for PSUs will be truncated and that number of PSUs as determined by the degree of achievement of the performance objectives as of that time will become eligible to vest as of the date of the change in control and
will be treated as unvested RSUs and if assumed or substituted for by the acquiring or surviving entity will convert into RSUs of equal value to be settled in cash or shares by the acquiring or surviving entity. If the executive officer remains
employed with the acquiring or surviving entity through the end of the applicable performance period, the PSU awards will become fully vested. Further, if within 24 months following a change in control, the executive officers employment is
terminated without cause, he or she resigns for good reason, or he or she dies or becomes disabled, the PSU awards, to the extent unvested, will become fully vested.
Consulting Agreement for Mr.
May.
Mr. May resigned from employment with Acxiom as of April 15, 2018. On April 16, 2018,
the Company and Mr. May entered into a consulting agreement with the Company pursuant to which he will continue to work with the Company through October 31, 2018 for a consulting fee of $2,500 per month. As part of the agreement,
Mr. May agreed to certain covenants and agreed to release and indemnify the Company from any claims. In connection with his resignation, Mr. May received his 2018 annual cash incentive payment under the Fiscal 2018 CIP and the payout
of the 2016 PSU awards as detailed in Section 4 of the Compensation Discussion and Analysis above. Mr. Mays unvested Acxiom equity awards will continue to vest in accordance with the terms applicable to such awards through
October 31, 2018. The Companys SVP Severance Policy no longer applies to Mr. May. For purposes of any potential sale of Acxiom Marketing Solutions, his equity awards would be deemed to be assumed and continued by the Company,
including a potential truncation of the performance period and conversion of the PSU awards into RSUs as described above, subject to any lapse of the awards. See the Outstanding Equity Awards Table for more information on those awards.
Scott E. Howe
The following table shows the potential payments
upon a hypothetical termination or change in control of the Company effective March 31, 2018 for Scott E. Howe, our Chief Executive Officer & President.
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|
|
|
|
|
|
|
|
|
|
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Type of
Payment
|
|
Voluntary
Termination
or Retirement
|
|
|
Termination
without
Cause or
Resignation
for Good
Reason other
than a
Change in
Control
|
|
|
Termination
for Cause
|
|
|
Non-Renewal
by the
Company
|
|
|
Change in
Control with
no
Termination
|
|
|
Termination
without
Cause or
Resignation
for Good
Reason
following a
Change
in
Control
1
|
|
|
Death or
Disability
|
|
Severance
|
|
|
|
|
|
$
|
3,259,750
|
2
|
|
|
|
|
|
$
|
3,259,750
|
2
|
|
|
|
|
|
$
|
4,889,625
|
3
|
|
|
|
|
Cash Incentive Plan
|
|
|
|
|
|
$
|
597,000
|
4
|
|
|
|
|
|
$
|
597,000
|
4
|
|
|
|
|
|
$
|
597,000
|
4
|
|
$
|
597,000
|
5
|
SERP or Deferred Plan
|
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|
|
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|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
|
|
$
|
515,873
|
7
|
|
$
|
515,873
|
11
|
Restricted Stock Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
|
|
$
|
3,595,016
|
7
|
|
$
|
3,595,016
|
11
|
Performance Stock Units
|
|
|
|
|
|
$
|
2,238,426
|
|
|
|
|
|
|
$
|
2,238,426
|
8
|
|
$
|
2,238,426
|
9
|
|
$
|
3,617,453
|
10
|
|
$
|
2,238,426
|
12
|
Total
|
|
|
|
|
|
$
|
6,095,176
|
|
|
|
|
|
|
$
|
6,095,176
|
|
|
$
|
2,238,426
|
|
|
$
|
13,214,967
|
13
|
|
$
|
6,946,315
|
14
|
1
|
Under his employment agreement, in the event his employment is terminated by the Company without cause or he resigns for
good reason following the public announcement of a Board-approved agreement to effect a change in control but prior to the consummation of the change in control, in addition to any amounts received for a without-cause or good-reason termination he
would receive a supplemental payment equal to the value of what he would have received had he remained employed through the date of the change in control, payable upon the consummation of the change in control. In addition, Mr. Howe would be
entitled to a payment equal to 100% of his then current base salary and average annual bonus for the preceding two years.
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48
2
|
Represents: 200% of i) base salary; and ii) average annual bonus for preceding two fiscal years.
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3
|
Represents: 300% of i) base salary; and ii) average annual bonus for preceding two fiscal years.
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4
|
Represents fiscal 2018 actual bonus.
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5
|
In the event of his death or disability, Mr. Howes employment agreement specifies that he or his survivors
will receive payment of any earned but unpaid bonus. This represents fiscal 2018 bonus.
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6
|
The Companys equity plans permit, but do not require, accelerated vesting of certain equity awards in the event of
a change in control, as determined in the discretion of the Board of Directors. The amount assumes that no such acceleration will occur.
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7
|
If Mr. Howes employment is terminated within
24-months
following a
change in control by us without cause or by Mr. Howe for good reason, vesting of any unvested stock options or RSUs will be accelerated. The stock option value was determined by subtracting the strike price from the closing stock price of our
common stock on March 29, 2018 ($22.71) and multiplying this difference by the number of unvested options. The RSU value was determined by multiplying the number of unvested RSUs by the closing price of our common stock on March 29, 2018
($22.71).
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8
|
If Mr. Howes employment is terminated without cause or he resigns for good reason or his contract is not
renewed by the Company, his employment agreement provides for prorated vesting of certain PSUs. The PSUs value was determined by multiplying the closing price of our common stock on March 29, 2018 ($22.71) by the number of PSUs based on
the years elapsed in the performance period that were estimated to be earned as of March 31, 2018, including, (i) 100% of fiscal 2016 awards at 200% of target;
(ii) two-thirds
of fiscal 2017 awards
at 100% of target and
(iii) one-third
of fiscal 2018 awards at 100% of target. Note, however, that these amounts may differ based on actual performance.
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9
|
The PSUs provide that on a change in control, the performance period will be truncated and the number of PSUs that are
eligible to vest will be determined based on the degree of achievement of performance objectives applicable to such PSUs as of the change in control date. The number of PSUs that are eligible to vest will be treated as unvested RSUs, and if
appropriately assumed or substituted by an acquirer or successor entity (or an affiliate of such entity), will convert into RSUs (or other compensatory arrangements) to be settled in cash or shares by the acquirer or successor entity (or an
affiliate of such entity). In the event Mr. Howe remains employed with the acquirer through the end of the original performance period, the assumed RSUs (i.e., the converted PSUs) will become fully vested and will be settled within 30 days of
the performance period end date. These RSUs (i.e., the converted PSUs) would also vest on Mr. Howes death, permanent and total disability or involuntary termination without cause or resignation by Mr. Howe for good reason. The amount
shown above does not include any value in respect of the RSUs that would still be held by Mr. Howe.
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10
|
Please see Note 9. The performance units value was determined based on actual performance through March 31,
2018, including, (i) 100% of fiscal 2016 awards at 200% of target, (ii) 100% of fiscal 2017 awards at 100% of target and (iii) 100% of fiscal 2018 awards at 100% of target. The performance units value was determined by multiplying such vested
units by the closing price of our common stock on March 29, 2018 ($22.71).
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11
|
Six months after long-term disability payments commence all earned but unvested stock options and RSUs vest. Upon
death, any earned but unvested stock options and RSUs immediately vest. The stock option value was determined by subtracting the strike price from the closing price of our common stock on March 29, 2018 and multiplying this difference by
the number of unvested options. The RSU value was determined by multiplying the number of unvested RSUs by the closing price of our common stock on March 29, 2018.
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12
|
In the case of death or disability, a
pro-rated
portion of his PSUs will vest,
provided that at least one year of the performance period has elapsed, with payment based on actual performance at end of performance period. The amount shown is calculated the same as in Note 8. However, this amount would not be payable until
completion of the performance period and would be decreased if the Company achieved less than 100% attainment of the objectives.
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13
|
Under his employment agreement, if his total payments or benefits constitute parachute payments under section
280G of the Internal Revenue Code that would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, then the payments or benefits will be reduced to the greater of: (i) the largest portion of the payment or
benefit that would not result in him being subject to the excise tax; or (ii) the entire payment or benefit less all applicable taxes computed at the highest marginal rate.
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14
|
In the event of death or disability, in addition to the payment earned but unpaid base salary and amounts accrued and
vested through the Company retirement plans, he would receive benefits under the Companys life insurance plan or disability plan, as applicable.
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49
Warren C. Jenson
The following
table shows the potential payments under a hypothetical termination or a change in control of the Company as of March 31, 2018 for Warren C. Jenson, our Chief Financial Officer & Executive Vice President/President, International.
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|
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|
|
|
|
|
|
|
Type of
Payment
|
|
Voluntary
Termination
or Retirement
|
|
|
Termination
without
Cause or
Resignation
for Good
Reason other
than a
Change in
Control
|
|
|
Termination
for Cause
|
|
|
Non-
Renewal by
the
Company
|
|
|
Change in
Control with
no
Termination
|
|
|
Termination
without Cause
or Resignation
for Good
Reason
following a
Change in
Control
1
|
|
|
Death or
Disability
|
|
Severance
|
|
|
|
|
|
$
|
2,568,000
|
2
|
|
|
|
|
|
$
|
1,284,000
|
3
|
|
|
|
|
|
$
|
3,852,000
|
2
|
|
|
|
|
Cash Incentive Plan
|
|
|
|
|
|
$
|
433,350
|
4
|
|
|
|
|
|
$
|
433,350
|
4
|
|
|
|
|
|
$
|
433,350
|
4
|
|
$
|
433,350
|
5
|
SERP or Deferred Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
|
|
$
|
211,441
|
7
|
|
$
|
211,441
|
11
|
Restricted Stock Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
|
|
$
|
2,045,853
|
7
|
|
$
|
2,045,853
|
11
|
Performance Stock Units
|
|
|
|
|
|
$
|
784,093
|
8
|
|
|
|
|
|
$
|
784,093
|
8
|
|
$
|
784,093
|
9
|
|
$
|
1,265,318
|
10
|
|
$
|
784,093
|
12
|
Total
|
|
|
|
|
|
$
|
3,785,443
|
|
|
|
|
|
|
$
|
2,501,443
|
|
|
$
|
784,093
|
13
|
|
$
|
7,807,962
|
13
|
|
$
|
3,474,737
|
14
|
1
|
Under his employment agreement, in the event his employment is terminated by the Company without cause or he resigns for
good reason following the public announcement of a Board-approved agreement to effect a change in control but prior to the consummation of the change in control, in addition to any amounts received for a without-cause or good-reason termination he
would receive a supplemental payment equal to the value of what he would have received had he remained employed through the date of the change in control, payable upon the consummation of the change in control.
|
2
|
Represents: 200% of i) base salary; and ii) average annual bonus for preceding two fiscal years.
|
3
|
Represents: 100% of i) base salary; and ii) average annual bonus for preceding two fiscal years.
|
4
|
Represents fiscal 2018 actual bonus.
|
5
|
In the event of his death or disability, the terms of Mr. Jensons employment agreement specify he or his
survivors will receive payment of any earned but unpaid bonus.
|
6
|
The Companys equity plans permit, but do not require, accelerated vesting of certain equity awards in the event of
a change in control, as determined in the discretion of the Board of Directors. The amount assumes that no such acceleration will occur
|
7
|
If his employment is terminated within
24-months
following a change in control by
us without cause or by Mr. Jenson for good reason, vesting of any unvested stock options or RSUs will be accelerated. The stock option value was determined by subtracting the strike price from the closing stock price of our common stock on
March 29, 2018 ($22.71) and multiplying this difference by the number of unvested options. The RSU value was determined by multiplying the number of unvested RSUs by the closing price of our common stock on March 29, 2018.
|
8
|
If Mr. Jensons employment is terminated without cause or he resigns for good reason or his contract is not
renewed by the Company, his employment agreement provides for prorated vesting of certain PSUs. The PSUs value was determined by multiplying the closing price of our common stock on March 29, 2018 ($22.71) by the number of PSUs based on
the years elapsed in the performance period that were estimated to be earned as of March 31, 2018, including, (i) 100% of fiscal 2016 awards at 200% of target;
(ii) two-thirds
of fiscal 2017 awards
at 100% of target and
(ii) one-third
of fiscal 2018 awards at 100% of target. For Mr. Jensons 2015 PRSU award, the amount includes the 45,364 shares actually earned. Note, however, that these
amounts may differ based on actual performance.
|
9
|
The PSUs provide that on a change in control, the performance period will be truncated and the number of PSUs that are
eligible to vest will be determined based on the degree of achievement of performance objectives applicable to such PSUs as of the change in control date. The number of PSUs that are eligible to vest will be treated as unvested RSUs, and if
appropriately assumed or substituted by an acquirer or successor entity (or an affiliate of such entity), will convert into RSUs (or other compensatory arrangements) to be settled in cash or shares by the acquirer or successor entity (or an
affiliate of such entity). In the event Mr. Jenson remains employed with the acquirer through the end of the original performance period, the assumed RSUs (i.e., the converted PSUs) will become fully vested and will be settled within 30 days of the
performance period end date. These RSUs (i.e., the converted PSUs) would also vest on Mr. Jensons death, permanent and total disability or involuntary termination without cause or resignation by Mr. Jenson for good reason. The amount
shown above does not include any value in respect of the RSUs that would still be held by Mr. Jenson.
|
50
10
|
Please see Note 9. The performance units value was determined based on actual performance through March 31,
2018, including, (i) 100% of fiscal 2016 awards at 200% of target, (ii) 100% of fiscal 2017 awards at 100% of target and (iii) 100% of fiscal 2018 awards at 100% of target. For Mr. Jensons 2015 PRSU award, the amount includes the 45,364
shares actually earned. The performance units value was determined by multiplying such vested units by the closing price of our common stock on March 29, 2018 ($22.71).
|
11
|
Six months after long-term disability payments commence all earned but unvested equity vests. Upon death, any earned but
unvested equity immediately vests. The stock option value was determined by subtracting the strike price from the closing price of our common stock on March 29, 2018 and multiplying this difference by the number of unvested options. The RSU
value was determined by multiplying the number of unvested RSUs by the closing price of our common stock on March 29, 2018.
|
12
|
In the case of death or disability, a
pro-rated
portion of his performance units
will vest, provided that at least one year of the performance period has elapsed, with payment based on actual performance at end of performance period. The amount shown is calculated the same as in Note 8. However, this amount would not be payable
until completion of the performance period and would be decreased if the Company achieved less than 100% attainment of the objectives.
|
13
|
Under his employment agreement, if his total payments or benefits constitute parachute payments under section
280G of the Code that would be subject to the excise tax imposed by Section 4999 of the Code, then the payments or benefits will be reduced to the greater of: (i) the largest portion of the payment or benefit that would not result in him
being subject to the excise tax; or (ii) the entire payment or benefit less all applicable taxes computed at the highest marginal rate.
|
14
|
In the event of death or disability, in addition to the payment of earned but unpaid base salary and amounts accrued and
vested through the Company retirement plans, he would receive benefits under the Companys life insurance plan or disability plan, as applicable.
|
51
James F. Arra
The following
table shows the potential payments under a hypothetical termination or a change in control of the Company as of March 31, 2018 for James F. Arra,
Co-President &
General Manager, Connectivity.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Type of
Payment
|
|
Voluntary
Termination
or
Retirement
|
|
|
Termination
without
Cause or
Resignation
for Good
Reason
other than a
Change in
Control
|
|
|
Termination
for Cause
|
|
|
Change in
Control with
no
Termination
|
|
|
Termination
without Cause or
Resignation for
Good Reason
following a
Change in
Control
|
|
|
Death or
Disability
|
|
Severance
|
|
|
|
|
|
$
|
806,776
|
1
|
|
|
|
|
|
|
|
|
|
$
|
1,210,165
|
2
|
|
|
|
|
Cash Incentive Plan
|
|
|
|
|
|
$
|
37,800
|
3
|
|
|
|
|
|
|
|
|
|
$
|
37,800
|
3
|
|
|
|
|
SERP or Deferred Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4
|
|
$
|
62,371
|
5
|
|
$
|
62,371
|
6
|
Restricted Stock Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4
|
|
$
|
2,387,321
|
5
|
|
$
|
2,387,321
|
6
|
Performance Stock Units
|
|
|
|
|
|
$
|
129,492
|
7
|
|
|
|
|
|
$
|
129,492
|
8
|
|
$
|
194,239
|
9
|
|
$
|
129,492
|
10
|
Total
|
|
|
|
|
|
$
|
974,069
|
|
|
|
|
|
|
$
|
129,492
|
11
|
|
$
|
3,891,895
|
11
|
|
$
|
2,579,184
|
12
|
1
|
Represents: 100% of i) of base salary; and ii) average annual bonus for preceding two fiscal years.
|
2
|
Represents: 150% of i) of base salary; and ii) average annual bonus for preceding two fiscal years.
|
3
|
Represents fiscal year 2018 actual bonus.
|
4
|
The Companys equity plans permit, but do not require, accelerated vesting of certain equity awards in the event of
a change in control, as determined in the discretion of the Board of Directors. The amount assumes that no such acceleration will occur.
|
5
|
Represents accelerated vesting of all Mr. Arras unvested stock options and RSUs. The stock option value was
determined by subtracting the strike price from the closing price of our common stock on March 29, 2018 and multiplying this difference by the number of unvested options. The RSU value was determined by multiplying the number of unvested RSUs
by the closing price of our common stock on March 29, 2018.
|
6
|
Six months after long-term disability payments commence all earned but unvested stock options and RSUs vest. Upon
death, any earned but unvested stock options and RSUs immediately vest. The stock option value was determined by subtracting the strike price from the closing price of our common stock on March 29, 2018 and multiplying this difference by
the number of unvested options. The RSU value was determined by multiplying the number of unvested RSUs by the closing price of our common stock on March 29, 2018.
|
7
|
Represents accelerated vesting of: (i) PSUs earned during a completed performance period and (ii) PSUs for
performance periods that are ongoing as of the termination date and for which at least one year of the performance period has elapsed as of the termination date, prorated based on the number of calendar months that elapsed between the beginning of
the performance period and the termination date. The PSUs value was determined by multiplying the closing price of our common stock on March 29, 2018 ($22.17) by the number of PSUs based on the calendar months elapsed in the performance
period that were estimated to be earned as of March 29, 2018, including
(i) one-third
of fiscal 2018 awards at target. Note, however, that these amounts may differ based on actual performance.
|
8
|
Upon consummation of a change of control, the applicable performance period will be truncated, and a number of PSUs will
become eligible to vest based on the degree of achievement of performance objectives as of the change in control date. Such eligible PSUs will be treated as unvested RSUs, and if appropriately assumed or substituted by the acquirer will convert into
RSUs (or other arrangements) to be settled in cash or shares by the acquirer. In the event he remains employed with the acquirer through the end of the performance period, the RSUs (i.e., the converted PSUs) will become fully vested and will be
settled within 30 days of the performance period end date. They would also vest on death, permanent and total disability or involuntary termination without cause or resignation for good reason within 24 months following a change in control. The
amount shown above does not include any value in respect of the RSUs that would still be held.
|
9
|
The PSUs value was determined as described in notes 7 and 8, except that the amount also includes the full value of
2017 awards at 100% of target, reflecting the vesting of the RSU awards referred to in note 8.
|
10
|
In the case of death or disability, a
pro-rated
portion of his performance units
will vest, provided that at least one year of the performance period has elapsed, with payment based on actual performance at end of performance period. The amount shown is calculated the same as in Note 7. However, this amount would not be payable
until completion of the performance period and would be decreased if the Company achieved less than 100% attainment of the objectives.
|
52
11
|
If the total payment to Mr. Arra under the Severance Policy constitutes a parachute payment under
section 280G of the Code that would be subject to the excise tax imposed by Section 4999 of the Code, then the payment will be reduced to the greater of: (i) the largest portion of the termination payment that would not result in a portion
of the payment being subject to the excise tax; or (ii) the entire payment less all applicable taxes computed at the highest marginal rate.
|
12
|
In the event of death or disability, in addition to the payment of earned but unpaid base salary and amounts accrued and
vested through the Company retirement plans, he would receive benefits under the Companys life insurance plan or disability plan, as applicable.
|
53
Richard E. Erwin
The following
table shows the potential payments under a hypothetical termination or a change in control of the Company as of March 31, 2018 for Richard E. Erwin, President & General Manager, Audience Solutions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Type of Payment
|
|
Voluntary
Termination
or
Retirement
|
|
|
Termination
without
Cause or
Resignation
for Good
Reason
other than a
Change in
Control
|
|
|
Termination
for Cause
|
|
|
Change in
Control
with no
Termination
|
|
|
Termination
without
Cause or
Resignation
for Good
Reason
following a
Change in
Control
|
|
|
Death or
Disability
|
|
Severance
|
|
|
|
|
|
$
|
817,500
|
1
|
|
|
|
|
|
|
|
|
|
$
|
1,226,250
|
2
|
|
|
|
|
Cash Incentive Plan
|
|
|
|
|
|
$
|
226,200
|
3
|
|
|
|
|
|
|
|
|
|
$
|
226,200
|
3
|
|
|
|
|
SERP or Deferred Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4
|
|
$
|
38,569
|
5
|
|
$
|
38,569
|
6
|
Restricted Stock Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4
|
|
$
|
702,784
|
5
|
|
$
|
702,784
|
6
|
Performance Stock Units
|
|
|
|
|
|
$
|
352,694
|
7
|
|
|
|
|
|
$
|
352,694
|
8
|
|
$
|
1,653,629
|
9
|
|
$
|
352,694
|
10
|
Total
|
|
|
|
|
|
$
|
1,396,394
|
|
|
|
|
|
|
$
|
352,694
|
11
|
|
$
|
3,847,432
|
11
|
|
$
|
1,094,047
|
12
|
1
|
Represents: 100% of i) of base salary; and ii) average annual bonus for preceding two fiscal years.
|
2
|
Represents: 150% of i) of base salary; and ii) average annual bonus for preceding two fiscal years.
|
3
|
Represents fiscal year 2018 actual bonus.
|
4
|
The Companys equity plans permit, but do not require, accelerated vesting of certain equity awards in the event of
a change in control, as determined in the discretion of the Board of Directors. The amount assumes that no such acceleration will occur.
|
5
|
Represents accelerated vesting of all Mr. Erwins unvested stock options and RSUs. The stock option value was
determined by subtracting the strike price from the closing price of our common stock on March 29, 2018 and multiplying this difference by the number of unvested options. The RSU value was determined by multiplying the number of unvested RSUs
by the closing price of our common stock on March 29, 2018.
|
6
|
Six months after long-term disability payments commence all earned but unvested stock options and RSUs vest. Upon
death, any earned but unvested stock options and RSUs immediately vest. The stock option value was determined by subtracting the strike price from the closing price of our common stock on March 29, 2018 and multiplying this difference by
the number of unvested options. The RSU value was determined by multiplying the number of unvested RSUs by the closing price of our common stock on March 29, 2018.
|
7
|
Represents accelerated vesting of: (i) PSUs earned during a completed performance period and (ii) PSUs for
performance periods that are ongoing as of the termination date and for which at least one year of the performance period has elapsed as of the termination date, prorated based on the number of calendar months that elapsed between the beginning of
the performance period and the termination date. The PSUs value was determined by multiplying the closing price of our common stock on March 29, 2018 ($22.17) by the number of PSUs based on the years elapsed in the performance period that
were estimated to be earned as of March 31, 2018, including (i) the full amount of fiscal 2016 awards earned at 200% of target,
(ii) two-thirds
of fiscal 2017 awards at 100% of target and
(iii) one-third
of fiscal 2018 awards at target. For Mr. Erwins 2016 inducement PSU award, the amount includes the 20,965 shares actually earned. Note, however, that these amounts would be decreased
if the Company achieved less than the attainment stated above.
|
8
|
Upon consummation of a change of control, the applicable performance period will be truncated, and a number of PSUs will
become eligible to vest based on the degree of achievement of performance objectives as of the change in control date. Such eligible PSUs will be treated as unvested RSUs, and if appropriately assumed or substituted by the acquirer will convert into
RSUs (or other arrangements) to be settled in cash or shares by the acquirer. In the event he remains employed with the acquirer through the end of the performance period, the RSUs (i.e., the converted PSUs) will become fully vested and will be
settled within 30 days of the performance period end date. They would also vest on death, permanent and total disability or involuntary termination without cause or resignation for good reason within 24 months following a change in control. The
amount shown above does not include any value in respect of the RSUs that would still be held.
|
9
|
Please see Note 8. The performance units value was determined based on actual performance through March 31,
2018, including, (i) 100% of fiscal 2016 awards at 200% of target, (ii) 100% of fiscal 2017 awards at 100% of target and (iii) 100% of fiscal 2018 awards at 100% of target. For Mr. Erwins 2016 Inducement PSU award, the amount includes the
20,965 shares actually earned. The performance units value was determined by multiplying such vested units by the closing price of our common stock on March 29, 2018 ($22.71).
|
54
10
|
In the case of death or disability, a
pro-rated
portion of his performance units
will vest, provided that at least one year of the performance period has elapsed, with payment based on actual performance at end of performance period. The amount shown is calculated the same as in Note 7. However, this amount would not be payable
until completion of the performance period and would be decreased if the Company achieved less than 100% attainment of the objectives.
|
11
|
If the total payment to Mr. Erwin under the Severance Policy constitutes a parachute payment under
section 280G of the Code that would be subject to the excise tax imposed by Section 4999 of the Code, then the payment will be reduced to the greater of: (i) the largest portion of the termination payment that would not result in a portion
of the payment being subject to the excise tax; or (ii) the entire payment less all applicable taxes computed at the highest marginal rate.
|
12
|
In the event of death or disability, in addition to the payment of earned but unpaid base salary and amounts accrued and
vested through the Company retirement plans, he would receive benefits under the Companys life insurance plan or disability plan, as applicable.
|
55
Anneka R. Gupta
The following
table shows the potential payments under a hypothetical termination or a change in control of the Company as of March 31, 2018 for Anneka R. Gupta,
Co-President &
General Manager, Connectivity.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Type of Payment
|
|
Voluntary
Termination
or
Retirement
|
|
|
Termination
without
Cause or
Resignation
for Good
Reason
other than a
Change in
Control
|
|
|
Termination
for Cause
|
|
|
Change in
Control
with no
Termination
|
|
|
Termination
without
Cause or
Resignation
for Good
Reason
following a
Change in
Control
|
|
|
Death or
Disability
|
|
Severance
|
|
|
|
|
|
$
|
504,873
|
1
|
|
|
|
|
|
|
|
|
|
$
|
757,310
|
2
|
|
|
|
|
Cash Incentive Plan
|
|
|
|
|
|
$
|
122,850
|
3
|
|
|
|
|
|
|
|
|
|
$
|
122,850
|
3
|
|
|
|
|
SERP or Deferred Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4
|
|
$
|
62,371
|
5
|
|
$
|
62,371
|
6
|
Restricted Stock Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4
|
|
$
|
2,382,211
|
5
|
|
$
|
2,382,211
|
6
|
Performance Stock Units
|
|
|
|
|
|
$
|
129,492
|
7
|
|
|
|
|
|
$
|
129,492
|
8
|
|
$
|
194,239
|
9
|
|
$
|
129,492
|
10
|
Total
|
|
|
|
|
|
$
|
757,215
|
|
|
|
|
|
|
$
|
129,492
|
11
|
|
$
|
3,518,980
|
11
|
|
$
|
2,574,074
|
12
|
1
|
Represents: 100% of i) of base salary; and ii) average annual bonus for preceding two fiscal years.
|
2
|
Represents: 150% of i) of base salary; and ii) average annual bonus for preceding two fiscal years.
|
3
|
Represents fiscal year 2018 actual bonus.
|
4
|
The Companys equity plans permit, but do not require, accelerated vesting of certain equity awards in the event of
a change in control, as determined in the discretion of the Board of Directors. The amount assumes that no such acceleration will occur.
|
5
|
Represents accelerated vesting of all Ms. Guptas unvested stock options and RSUs. The stock option value was
determined by subtracting the strike price from the closing price of our common stock on March 29, 2018 and multiplying this difference by the number of unvested options. The RSU value was determined by multiplying the number of unvested RSUs
by the closing price of our common stock on March 29, 2018.
|
6
|
Six months after long-term disability payments commence all earned but unvested stock options and RSUs vest. Upon
death, any earned but unvested stock options and RSUs immediately vest. The stock option value was determined by subtracting the strike price from the closing price of our common stock on March 29, 2018 and multiplying this difference by
the number of unvested options. The RSU value was determined by multiplying the number of unvested RSUs by the closing price of our common stock on March 29, 2018.
|
7
|
Represents accelerated vesting of: (i) PSUs earned during a completed performance period and (ii) PSUs for
performance periods that are ongoing as of the termination date and for which at least one year of the performance period has elapsed as of the termination date, prorated based on the number of calendar months that elapsed between the beginning of
the performance period and the termination date. The PSUs value was determined by multiplying the closing price of our common stock on March 29, 2018 ($22.17) by the number of PSUs based on the calendar months elapsed in the performance
period that were estimated to be earned as of March 29, 2018, including
(i) one-third
of fiscal 2018 awards at target. Note, however, that these amounts may differ based on actual performance.
|
8
|
Upon consummation of a change of control, the applicable performance period will be truncated, and a number of PSUs will
become eligible to vest based on the degree of achievement of performance objectives as of the change in control date. Such eligible PSUs will be treated as unvested RSUs, and if appropriately assumed or substituted by the acquirer will convert into
RSUs (or other arrangements) to be settled in cash or shares by the acquirer. In the event he remains employed with the acquirer through the end of the performance period, the RSUs (i.e., the converted PSUs) will become fully vested and will be
settled within 30 days of the performance period end date. They would also vest on death, permanent and total disability or involuntary termination without cause or resignation for good reason within 24 months following a change in control. The
amount shown above does not include any value in respect of the RSUs that would still be held.
|
9
|
The PSUs value was determined as described in notes 7 and 8, except that the amount also includes the full value of
2017 awards at 100% of target, reflecting the vesting of the RSU awards referred to in note 8.
|
10
|
In the case of death or disability, a
pro-rated
portion of his performance units
will vest, provided that at least one year of the performance period has elapsed, with payment based on actual performance at end of performance period. The amount shown is calculated the same as in Note 7. However, this amount would not be payable
until completion of the performance period and would be decreased if the Company achieved less than 100% attainment of the objectives.
|
56
11
|
If the total payment to Ms. Gupta under the Severance Policy constitutes a parachute payment under
section 280G of the Code that would be subject to the excise tax imposed by Section 4999 of the Code, then the payment will be reduced to the greater of: (i) the largest portion of the termination payment that would not result in a portion
of the payment being subject to the excise tax; or (ii) the entire payment less all applicable taxes computed at the highest marginal rate.
|
12
|
In the event of death or disability, in addition to the payment of earned but unpaid base salary and amounts accrued and
vested through the Company retirement plans, he would receive benefits under the Companys life insurance plan or disability plan, as applicable.
|
57
CEO Pay Ratio
As required by
Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation
S-K,
we are providing the following information about the relationship of the annual total
compensation of our employees and the annual total compensation of our Chief Executive Officer:
For fiscal 2018:
|
|
|
the median of the annual total compensation of all employees of our company (other than our CEO) was $92,118;
|
|
|
|
the annual total compensation of our CEO was $5,390,797; and
|
|
|
|
the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was
59 to 1. This ratio is a reasonable estimate calculated in a manner consistent with SEC rules.
|
We identified the employee with compensation at
the median of the annual total compensation of all employees using the following methodology:
|
1
|
In determining our employee population, we considered the individuals, excluding our CEO, who were employed by us and our
consolidated subsidiaries on March 31, 2018, whether employed on a full-time, part-time, seasonal or temporary basis (which consisted of approximately 3,338 individuals on that date). We did not include any contractors or other
non-employee
workers in our employee population.
|
|
2
|
As permitted by SEC rules, to identify our median employee, we selected base pay, which we calculated as
annual base pay using a reasonable estimate of the hours worked during fiscal 2018 for hourly employees and using annual salary levels for our remaining employees for the
12-month
period from April 1,
2017 through March 31, 2018.
|
|
3
|
For this analysis, we annualized base pay for any employees who commenced work during fiscal 2018 and converted our
international associates base pay to U.S. dollars using a standard conversion rate.
|
|
4
|
Using this approach, we identified the individual at the median of our employee population who was based in the United
States. We then calculated the annual total compensation for this individual using the same methodology we use to calculate the amount reported for our CEO in the Total column of the Summary Compensation Table as set forth herein, which
was $92,118.
|
|
5
|
As disclosed in the Summary Compensation Table, the annual total compensation for our CEO was $5,390,797.
|
Because SEC rules for identifying the median of the annual total compensation of all employees allow companies to adopt a variety of
methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their employee population and compensation practices, the pay ratio reported by other companies may not be comparable to our pay ratio, as other
companies have different employee populations and compensation practices and may have used different methodologies, exclusions, estimates and assumptions in calculating their pay ratios. As explained by the SEC when it adopted these rules, the rule
was not designed to facilitate comparisons of pay ratios among different companies, even companies within the same industry, but rather to allow stockholders to better understand and assess each particular companys compensation practices and
pay ratio disclosures.
Non-Employee
Director Compensation
The Governance/Nominating Committee of the Board of Directors reviews and makes a recommendation to the full Board regarding the compensation to be paid
to the
non-employee
directors each year. In the past fiscal year, the base annual retainer for each
non-employee
director, except for the
Non-Executive
Chairman of the Board, was $188,000, of which $128,000 was payable in Company common stock and $60,000 was payable in stock or cash at the election of each director. The base annual retainer for
the
Non-Executive
Chairman of the Board during the past fiscal year was $300,000, of which $210,000 was payable in Company common stock and
58
$90,000 was payable in stock or cash at the Chairmans election. An additional $10,000 per committee was payable to each
non-employee
director for his
or her service on the Audit/Finance, Compensation and Governance/Nominating Committees, payable in stock or cash at the election of each director. No additional compensation is paid for service on the Executive Committee. The chairs of the
Audit/Finance, Compensation and Governance/Nominating Committees were paid an additional $25,000, $25,000, and $15,000, respectively, as compensation for their additional responsibilities as chairs, payable in stock or cash at each chairs
election.
Director fees are paid on a quarterly basis. The Company reimburses its outside directors for travel and other expenses directly incurred
by them in connection with their service to the Company. In 2008, the Board adopted the Acxiom Corporation Directors Deferred Compensation Plan under which equity (but not cash) fees may be deferred.
The following table shows the compensation awarded in fiscal year 2018 to the Companys
non-employee
directors:
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|
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|
|
|
|
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Name
|
|
Fees Earned
or Paid in Cash
($)
|
|
|
Stock
Awards
($)
|
|
|
Total
($)
|
|
John L. Battelle
|
|
|
60,000
|
|
|
|
138,000
|
|
|
|
198,000
|
|
Timothy R. Cadogan
|
|
|
70,000
|
|
|
|
128,000
|
|
|
|
198,000
|
|
William T. Dillard II
|
|
|
0
|
|
|
|
198,000
|
|
|
|
198,000
|
|
Richard P. Fox
|
|
|
47,500
|
|
|
|
175,000
|
|
|
|
223,000
|
|
Jerry D. Gramaglia
|
|
|
100,000
|
|
|
|
210,000
|
|
|
|
310,000
|
|
William J. Henderson
|
|
|
105,000
|
|
|
|
128,000
|
|
|
|
233,000
|
|
Clark M. Kokich
|
|
|
42,500
|
|
|
|
170,500
|
|
|
|
213,000
|
|
Debora B. Tomlin
|
|
|
70,000
|
|
|
|
128,000
|
|
|
|
198,000
|
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