determined by our Board of Directors and Compensation Committee each year
during the term and be payable partly in cash and partly in fully-vested (unless otherwise stated in the equity grant agreement) equity based on achievement of specified performance criteria (as discussed
under Annual Incentive Compensation below). In addition, Mr. Browns employment agreement provides for certain severance entitlements, which are discussed under Potential Payments Upon Termination or Change in
Control below.
Annual Incentive Compensation. Certain employees, including our named executive officers, are
eligible to participate in the Victory Capital Holdings, Inc. Bonus Plan (the Bonus Plan), pursuant to which participants are eligible to earn a bonus with respect to each fiscal year, typically paid in the first calendar quarter of
the calendar year following the year for which the bonus is earned, subject to the participant remaining employed with us through the payment date. Individual awards may be discretionary or earned based on individual, Company or other criteria
determined by our Compensation Committee. 2020 annual bonuses for our named executive officers, which were paid in March 2021 were determined at the discretion of the Compensation Committee after consideration of both Company and individual
performance and, in the case of Messrs. Policarpo and Cliff, recommendations from Mr. Brown. For 2020, Messrs. Brown, Policarpo and Cliff were awarded actual cash bonuses of $6,850,000 (which included the annual bonus of $600,000
which is payable quarterly), $2,805,000 and $1,200,000, respectively. Messrs. Brown, Policarpo and Cliff did not have target bonuses for 2020, and the Compensation Committee determined the amount of their bonuses after considering market
competitiveness, Company performance factors and individual performance. None of our named executive officers received any annual bonus amounts that were payable in shares of our Class B common stock. Under the Bonus Plan, for each fiscal year,
the Company, in conjunction with the Board of Directors and Compensation Committee, establishes an annual bonus pool equal to a percentage of pre-bonus EBITDA that is payable in cash or shares of our
Class B common stock. For this purpose, and subject to additional adjustments as may be determined by our Board of Directors in its discretion, pre-bonus EBITDA is generally calculated using our
Adjusted EBITDA, to which we add back debt governance expenses, director fees, board-related expenses and stock compensation expense unrelated to equity awards issued from pools created in
connection with our management-led buyout and various acquisitions and as a result of equity granted related to our IPO, to arrive at Management reported EBITDA. We then add back our incentive compensation
expense to Management reported EBITDA to arrive at pre-bonus EBITDA.
Equity
Grants. Prior to the completion of our IPO in February 2018, we granted equity-based awards to our named executive officers pursuant to the 2013 Plan. In connection with our IPO we adopted the 2018 Plan, which took effect upon the completion of
the IPO and which replaced the 2013 Plan as the Companys equity-based compensation plan. A total of 3,372,484 shares of either Class A common stock or Class B common stock, or any combination thereof, as determined by the
Compensation Committee, are reserved and available for issuance under the 2018 Plan. Under the 2018 Plan, the Company may grant stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance awards and other
awards that may be settled in or based upon shares of our Class A common stock or Class B common stock, though currently outstanding awards under the 2018 Plan are based upon shares of our Class B common stock.
Equity compensation awards are an important part of our executive compensation program. We have granted performance-based
restricted shares and time-based restricted shares to our named executive officers under our stock plans.
Annual
Equity Grants. In connection with our annual compensation review for 2019, the Compensation Committee made its annual equity grants to named executive officers on March 31, 2020. The value of these restricted stock grants reflects the
Compensation Committees review of market competitive pay practices relative to peers and our 2019 performance.
The
named executive officers received time-based restricted shares, ratably vesting over a three-year period ending on March 31, 2023, as follows:
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Name
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Time-Based
RSAs (#)
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David C. Brown
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94,743
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Michael D. Policarpo
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28,117
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Kelly S. Cliff
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30,562
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Health and Welfare Plans. Our named executive officers are eligible to participate in
the employee benefit plans that we offer to our employees generally, including medical, dental, vision, life and accidental death and dismemberment, disability, supplemental life, a health savings account, health and dependent care flexible spending
accounts, critical illness and accident benefit plans, as well as commuter benefits and health and wellness rewards.
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