TABLE
OF CONTENTS
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PROXY
STATEMENT
The
proxy is solicited by the board of directors, or the board, of Fidelity National Financial, Inc., or FNF or the Company,
for use at the Annual Meeting of Shareholders to be held on June 14, 2023 at 10:00 a.m., Eastern Time, or at any postponement or adjournment
thereof, for the purposes set forth herein and in the accompanying Notice of Annual Meeting of Shareholders. The annual meeting will be
held virtually at www.virtualshareholdermeeting.com/FNF2023.
It
is anticipated that such proxy, together with this proxy statement, will first be mailed on or about April 27, 2023 to all shareholders
entitled to vote at the meeting.
The
Company’s principal executive offices are located at 601 Riverside Avenue, Jacksonville, Florida 32204, and its telephone number
at that address is (904) 854-8100.
FORWARD-LOOKING
STATEMENTS
This
proxy statement includes forward-looking statements. These statements are not historical facts, but instead represent only our beliefs
regarding future events, many of which, by their nature, are inherently uncertain and outside of our control. Forward-looking statements
include statements about our business and future performance, as well as ESG targets, goals, and commitments outlined in this proxy statement
or elsewhere. These statements can be identified by words such as “anticipates,” “intends,” “plans,”
“seeks,” “believes,” “estimates,” “expects” and similar references to future periods,
or by the inclusion of forecasts or projections. We caution readers not to place undue reliance on forward-looking statements. Forward-looking
statements speak only as of the date they are made, and we undertake no obligation to update publicly or otherwise revise any forward-looking
statements, whether as a result of new information, future events or other factors, except where we are expressly required to do so by
law. For a discussion of some of the risks and important factors that could affect our future results and financial condition, see “Risk
Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022.
GENERAL
INFORMATION ABOUT THE COMPANY
We
are a leading provider of (i) title insurance, escrow and other title-related services, including trust activities, trustee sales guarantees,
recordings and reconveyances and home warranty products and (ii) transaction services to the real estate and mortgage industries. FNF
is one of the nation’s largest title insurance companies operating through its title insurance underwriters - Fidelity National
Title Insurance Company (FNTIC), Chicago Title Insurance Company (Chicago Title), Commonwealth Land Title Insurance Company
(Commonwealth Land Title), Alamo Title Insurance and National Title Insurance of New York Inc. - which collectively issue more
title insurance policies than any other title company in the United States. Through our subsidiary ServiceLink Holdings, LLC (ServiceLink),
we provide mortgage transaction services including title-related services and facilitation of production and management of mortgage loans.
We are also a leading provider of insurance solutions serving retail annuity and life customers and institutional clients through our
majority-owned subsidiary, F&G Annuities & Life (F&G).
On
December 1, 2022, we completed our previously announced separation and distribution to our shareholders, on a pro rata basis, of approximately
15% of the common stock of F&G (the F&G Distribution). Following the F&G Distribution, we retained control of F&G
through our approximate 85%
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ownership
stake. The F&G Distribution was accomplished by the distribution of 68 shares of common stock, par value $0.001 per share, of F&G
for every 1,000 shares of our common stock, par value $0.0001 per share, as a dividend to each holder of shares of our common stock as
of the close of business on November 22, 2022, the record date for the F&G Distribution.
As
a result of the F&G Distribution, F&G is a separate, publicly traded company and its businesses, assets and liabilities consist
of those related to F&G’s business as a provider of insurance solutions serving retail annuity and life customers and institutional
clients. Through F&G’s insurance subsidiaries, including Fidelity & Guaranty Life Insurance Company and Fidelity & Guaranty
Life Insurance Company of New York, F&G intends to continue to market a broad portfolio of deferred annuities (fixed indexed annuities
and multi-year guarantee annuities or other fixed rate annuities), immediate annuities, indexed universal life insurance, funding agreements
(through funding agreement-backed notes issuances and the Federal Home Loan Bank of Atlanta) and pension risk transfer solutions. All
of FNF’s core title insurance, real estate, technology and mortgage related businesses, assets and liabilities that are not held
by F&G remain with FNF.
FNF
has a long history of delivering consistent, industry-leading results, driven by a steadfast focus on our customers and shareholders,
a culture of employee excellence, and an ability to deliver outstanding performance even in a challenging market environment. FNF generated
$12.5 billion of total revenue (excluding $947 million of noncash, valuation losses on investment securities) and $1.2 billion of net
earnings from continuing operations in 2022. Our strong performance is a testament to our experienced leadership team, strong balance
sheet, and diversified business model.
Our
consistent operating results have translated to strong returns for our shareholders. We also remain focused on deploying capital to best
maximize shareholder value through investments in our business and returning capital to our shareholders. During the five-year period
from January 1, 2018 through December 31, 2022, we returned approximately $2.0 billion to our shareholders in the form of cash dividends
and approximately $1.4 billion through share repurchases.
GENERAL
INFORMATION ABOUT THE VIRTUAL ANNUAL MEETING
Your
shares can be voted at the virtual annual meeting only if you vote by proxy or if you are present and vote at the meeting. Even if you
expect to attend the virtual annual meeting, please vote by proxy to assure that your shares will be represented.
WHY
DID I RECEIVE THIS PROXY STATEMENT?
The
board is soliciting your proxy to vote at the virtual annual meeting because you were a holder of our common stock at the close of business
on April 21, 2023, which we refer to as the record date, and therefore you are entitled to vote at the annual meeting. This proxy
statement contains information about the matters to be voted on at the annual meeting, and the voting process, as well as information
about the Company’s directors and executive officers.
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WHO
IS ENTITLED TO VOTE?
All
record holders of our common stock as of the close of business on April 21, 2023 are entitled to vote. As of the close of business
on that day, 272,191,238 shares of our common stock were issued and outstanding and eligible to vote. Each share is entitled to one
vote on each matter presented at the virtual annual meeting.
If
you hold your shares of FNF common stock through a broker, bank or other holder of record, you are considered a “beneficial owner”
of shares held in street name. As the beneficial owner, you have the right to direct your broker, bank or other holder of record on how
to vote your shares by using the voting instruction form included in the mailing or by following their instructions for voting via the
Internet or by telephone.
WHAT
SHARES ARE COVERED BY THE PROXY CARD?
The
proxy card covers all shares of FNF common stock held by you of record (i.e., shares registered in your name) and any shares of FNF common
stock held for your benefit in our 401(k) plan.
HOW
DO I VOTE?
You
may vote using any of the following methods:
At
the virtual annual meeting. All shareholders
may vote at the virtual annual meeting. Please see “How do I access the virtual annual meeting? Who may attend?” for additional
information on how to vote at the annual meeting.
By
proxy. There are three ways to vote
by proxy:
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By
mail, using your proxy card and return envelope; |
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By
telephone, using the telephone number printed on the proxy card and following the instructions on the proxy card; or |
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By
the Internet, using a unique password printed on your proxy card and following the instructions on the proxy card. |
Even
if you expect to attend the annual meeting virtually, please vote by proxy to assure that your shares will be represented.
WHAT
DOES IT MEAN TO VOTE BY PROXY?
It
means that you give someone else the right to vote your shares in accordance with your instructions. In this case, we are asking you to
give your proxy to our Chief Executive Officer, Corporate Secretary and Assistant Corporate Secretary, who are sometimes referred to as
the “proxy holders.” By giving your proxy to the proxy holders, you assure that your vote will be counted even if you are
unable to attend the annual meeting. If you give your proxy but do not include specific instructions on how to vote on a particular proposal
described in this proxy statement, the proxy holders will vote your shares in accordance with the recommendation of the board for such
proposal.
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ON
WHAT AM I VOTING?
You
will be asked to consider four proposals at the annual meeting.
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Proposal
No. 1 asks you to elect four Class
III directors to serve until the 2026 Annual Meeting of Shareholders. |
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Proposal
No. 2 asks you to approve, on a non-binding
advisory basis, the compensation paid to our named executive officers in 2022 (the Say-on-Pay Proposal). |
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Proposal
No. 3 asks you to select, on a non-binding
advisory basis, the frequency (annual, biennial or triennial) with which we will hold future Say-on-Pay votes. |
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Proposal
No. 4 asks you to ratify the appointment
of Ernst & Young LLP as our independent registered public accounting firm for the 2023 fiscal year. |
HOW
DOES THE BOARD RECOMMEND THAT I VOTE ON THESE PROPOSALS?
The
board recommends that you vote “FOR ALL” director nominees in Proposal 1, and “FOR” Proposals 2, and 4, and for
a frequency of “annual” or “ONE YEAR” in Proposal 3.
WHAT
HAPPENS IF OTHER MATTERS ARE RAISED AT THE MEETING?
Although
we are not aware of any matters to be presented at the virtual annual meeting other than those contained in the Notice of Annual Meeting,
if other matters are properly raised at the virtual annual meeting in accordance with the procedures specified in our certificate of incorporation
and bylaws, or applicable law, all proxies given to the proxy holders will be voted in accordance with their best judgment.
WHAT
IF I SUBMIT A PROXY AND LATER CHANGE MY MIND?
If
you have submitted your proxy and later wish to revoke it, you may do so by doing one of the following: giving written notice to the Corporate
Secretary prior to the virtual annual meeting; submitting another proxy bearing a later date (in any of the permitted forms) prior to
the virtual annual meeting; or casting a ballot at the virtual annual meeting.
WHO
WILL COUNT THE VOTES?
Broadridge
Investor Communications Services will serve as proxy tabulator and count the votes, and the results will be certified by the inspector
of election.
HOW
MANY VOTES MUST EACH PROPOSAL RECEIVE TO BE ADOPTED?
The
following votes must be received:
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For
Proposal No. 1 regarding the election
of directors, a majority of votes of our common stock cast is required to elect a director. Abstentions and broker non-votes are not counted
as votes cast and will therefore have no effect. |
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For
Proposal No. 2 regarding a non-binding
advisory vote on the compensation paid to our named executive officers, this vote is advisory in nature. Our bylaws require that proposals
relating to matters other than the election of directors be approved by the affirmative vote of a majority of the shares of our common
stock represented and entitled to vote at the meeting, in which case abstentions and broker non-votes have the effect of a vote against
Proposal No. 2. Because the vote on Proposal No. 2 is advisory and therefore will not be binding on the Company, the board will review
the voting result and take it into consideration when making future decisions regarding the compensation paid to our named executive officers.
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For
Proposal No. 3 the option of annual,
biennial or triennial frequency that receives the highest number of votes cast will be the frequency of the vote on the compensation of
our named executive officers that has been approved by shareholders on an advisory basis. Because this proposal seeks the input of our
shareholders and provides our shareholders with the option to vote to hold a say-on-pay vote annually, biennially or triennially, there
is no minimum vote requirement for this proposal. Although our board recommends holding a say-on-pay vote annually, you have the option
to specify one of four choices for this proposal on the proxy card: ONE YEAR, TWO YEARS, THREE YEARS or ABSTAIN, and the outcome will
be determined by the option that receives a plurality of the votes cast with respect to this matter. Abstentions will have no effect.
You are not voting to approve or disapprove of the board’s recommendation. Even though your vote is advisory and herefore will not
be binding on the Company, the board will review the voting results and take them into consideration when making future decisions regarding
the frequency of the advisory vote on executive compensation. |
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For
Proposal No. 4 regarding the ratification
of the appointment of Ernst & Young LLP, the affirmative vote of a majority of the shares of our common stock represented and entitled
to vote at the meeting would be required for approval. Abstentions will have the effect of a vote against this proposal. Because this
proposal is considered a “routine” matter under the rules of the New York Stock Exchange, nominees may vote in their discretion
on this proposal on behalf of beneficial owners who have not furnished voting instructions, and, therefore, there will be no broker non-votes
on this proposal. |
WHAT
CONSTITUTES A QUORUM?
A
quorum is present if a majority of the outstanding shares of our capital stock issued and entitled to vote at the annual meeting are present
in person or represented by proxy. Broker non-votes and abstentions will be counted for purposes of determining whether a quorum of each
class is present.
WHAT
ARE BROKER NON-VOTES? IF I DO NOT VOTE, WILL MY BROKER VOTE FOR ME?
Broker
non-votes occur when nominees, such as banks and brokers holding shares on behalf of beneficial owners, do not receive voting instructions
from the beneficial owners at least ten days before the meeting. If that happens, the nominees may vote those shares only on matters deemed
“routine” by the Securities and Exchange Commission and the rules promulgated by the New York Stock Exchange thereunder.
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The
Company believes that all the proposals to be voted on at the annual meeting, except for Proposal No. 4 regarding the appointment of Ernst
& Young LLP as our independent registered public accounting firm, are not “routine” matters. On non-routine matters, such
as Proposals No. 1, 2 and 3, nominees cannot vote unless they receive voting instructions from beneficial owners. Please be sure to give
specific voting instructions to your nominee so that your vote can be counted.
WHAT
EFFECT DOES AN ABSTENTION HAVE?
With
respect to Proposals No. 1 and 3, abstentions or directions to withhold authority will not be included in vote totals and will not affect
the outcome of the vote. With respect to each of Proposals No. 2 and 4, abstentions will have the effect of a vote against the proposals.
WHO
PAYS THE COST OF SOLICITING PROXIES?
We
pay the cost of the solicitation of proxies, including preparing and mailing the Notice of Annual Meeting of Shareholders, this proxy
statement and the proxy card. Following the mailing of this proxy statement, directors, officers and employees of the Company may solicit
proxies by telephone, facsimile transmission or other personal contact. Such persons will receive no additional compensation for such
services. Brokerage houses and other nominees, fiduciaries and custodians who are holders of record of shares of our common stock will
be requested to forward proxy soliciting material to the beneficial owners of such shares and will be reimbursed by the Company for their
charges and expenses in connection therewith at customary and reasonable rates. In addition, the Company has retained Georgeson Inc. to
assist in the solicitation of proxies for an estimated fee of $10,000 plus reimbursement of expenses.
WHAT
IF I SHARE A HOUSEHOLD WITH ANOTHER SHAREHOLDER?
We
have adopted a procedure approved by the Securities and Exchange Commission, called “householding.” Under this procedure,
FNF shareholders of record who have the same address and last name and do not participate in electronic delivery of proxy materials will
receive only one copy of our Annual Report and Proxy Statement unless one or more of these shareholders notifies us that they wish to
continue receiving individual copies. This procedure will reduce our printing costs and postage fees. Shareholders who participate in
householding will continue to receive separate proxy cards. Also, householding will not in any way affect dividend check mailings. If
you are a shareholder who resides in the same household with another shareholder, or if you hold more than one account registered in your
name at the same address, and wish to receive a separate proxy statement and annual report or notice of internet availability of proxy
materials for each account, please contact, Broadridge, toll free at 1-866-540-7095. You may also write to Broadridge, Householding Department,
at 51 Mercedes Way, Edgewood, New York 11717. Beneficial shareholders can request information about householding from their banks, brokers
or other holders of record. We hereby undertake to deliver promptly upon written or oral request, a separate copy of the Annual Report
to Shareholders, or this Proxy Statement, as applicable, to a shareholder at a shared address to which a single copy of the document was
delivered.
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WHY
DID I RECEIVE A NOTICE IN THE MAIL REGARDING THE INTERNET AVAILABILITY OF THE PROXY MATERIALS INSTEAD OF A PAPER COPY OF THE PROXY MATERIALS?
In
accordance with the rules of the Securities and Exchange Commission, we have elected to furnish to our shareholders this Proxy Statement
and our Annual Report on Form 10-K by providing access to these documents on the Internet rather than mailing printed copies. Accordingly,
the Notice of Internet Availability is being mailed to our shareholders of record and beneficial owners (other than those who previously
requested printed copies or electronic delivery of our proxy materials), which will direct shareholders to a website where they can access
our proxy materials and view instructions on how to vote online or by telephone. If you would prefer to receive a paper copy of our proxy
materials, please follow the instructions included in the Notice of Internet Availability. Our Proxy Statement and our Annual Report on
Form 10-K for the fiscal year ended December 31, 2022 are available for shareholders at www.proxyvote.com.
Instead of receiving future copies of our Proxy Statement and Annual Report on Form 10-K to shareholders by mail, shareholders can access
these materials online. Opting to receive your proxy materials online will save us the cost of producing and mailing documents to you;
an electronic link to the proxy voting site will be provided to you. Shareholders of record can enroll at www.proxyvote.com
for online access to future proxy
materials. If you hold your shares in a bank or brokerage account, you also may have the opportunity to receive copies of these documents
electronically. Please check the information provided in the proxy materials mailed to you by your bank or broker regarding the availability
of this service.
HOW
DO I ACCESS THE VIRTUAL ANNUAL MEETING? WHO MAY ATTEND?
At
the virtual annual meeting, shareholders will be able to listen to the meeting live and vote. To be admitted to the virtual annual meeting
at www.virtualshareholdermeeting.com/FNF2023,
you must enter the 16-digit control number available on your proxy card if you are a shareholder of record or included in your voting
instruction card and voting instructions you received from your broker, bank or other nominee. Although you may vote online during the
annual meeting, we encourage you to vote via the Internet, by telephone or by mail as outlined in the Notice of Internet Availability
of Proxy Materials or on your proxy card to ensure that your shares are represented and voted.
The
meeting webcast will begin promptly at 10:00 a.m., Eastern Time, on June 14, 2023, and we encourage you to access the meeting prior to
the start time.
WILL
I BE ABLE TO ASK QUESTIONS DURING THE VIRTUAL ANNUAL MEETING?
Shareholders
will be able to ask questions through the virtual meeting website during the meeting through www.virtualshareholdermeeting.com/FNF2023.
The Company will respond to as many appropriate questions during the annual meeting as time allows.
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HOW
CAN I REQUEST TECHNICAL ASSISTANCE DURING THE VIRTUAL ANNUAL MEETING?
A
technical support line will be available on the meeting website for any questions on how to participate in the virtual annual meeting
or if you encounter any difficulties accessing the virtual meeting.
CORPORATE
GOVERNANCE HIGHLIGHTS
Our
board is focused on good governance practices, which promote the long-term interests of our shareholders and support accountability of
our board of directors and management. Our board of directors has implemented the following measures to improve our overall governance
practices. See “Corporate Governance and Related Matters” for more detail on FNF’s governance practices.
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Proxy
access right adopted in response to support from shareholders |
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Majority
voting in uncontested director elections |
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Lead
Independent Director with robust duties |
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Annual
performance evaluations of the board of directors and committees |
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Robust
stock ownership guidelines for our executive officers and directors |
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Shareholders
may act by written consent |
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Independent
audit, compensation and corporate governance and nominating committees |
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Shareholder
engagement on compensation and governance issues |
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No
supermajority voting requirement for shareholders to act |
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Stand-alone
independent related person transaction committee |
CORPORATE
GOVERNANCE AND RELATED MATTERS
CORPORATE
GOVERNANCE GUIDELINES
Our
corporate governance guidelines provide, along with the charters of the committees of the board of directors, a framework for the functioning
of the board of directors and its committees and to establish a common set of expectations as to how the board of directors should perform
its functions. The Corporate Governance Guidelines address a number of areas including the size and composition of the board, board membership
criteria and director qualifications (including consideration of all aspects of diversity when considering new director nominees, including
diversity of age, gender, nationality, race, ethnicity and sexual orientation), director responsibilities, board agenda, roles of the
Chairman of the board of directors, Chief Executive Officer and Lead Director, meetings of independent directors, committee responsibilities
and assignments, board
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member
access to management and independent advisors, director communications with third parties, director compensation, director orientation
and continuing education, evaluation of senior management and management succession planning. These guidelines specifically provide that
a majority of the members of the board of directors must be outside directors whom the board of directors has determined have no material
relationship with us and whom otherwise meet the independence criteria established by the New York Stock
Exchange. The board of directors reviews these guidelines and other aspects of our governance at least annually. The board reviewed our
corporate governance guidelines in February 2023 without significant change. A copy of our Corporate Governance Guidelines is available
for review on our website at www.investor.fnf.com.
CODES
OF ETHICS
Our
board of directors has adopted a Code of Ethics for Senior Financial Officers, which is applicable to our Chief Executive Officer, our
Chief Financial Officer and our Chief Accounting Officer, and a Code of Business Conduct and Ethics, which is applicable to all our directors,
officers and employees. The purpose of these codes is to: (i) promote honest and ethical conduct, including the ethical handling of conflicts
of interest; (ii) promote full, fair, accurate, timely and understandable disclosure; (iii) promote compliance with applicable laws and
governmental rules and regulations; (iv) ensure the protection of our legitimate business interests, including
corporate opportunities, assets and confidential information; and (v) deter wrongdoing. Our codes of ethics are designed to maintain our
commitment to our longstanding standards for ethical business practices. Our reputation for integrity is one of our most important assets
and each of our employees and directors is expected to contribute to the care and preservation of that asset. Under our codes of ethics,
an amendment to or a waiver or modification of any ethics policy applicable to our directors or executive officers must be disclosed to
the extent required under Securities and Exchange Commission and/or New York Stock Exchange rules. We intend to disclose any such amendment
or waiver by posting it on our website at www.investor.fnf.com.
Copies
of our Code of Business Conduct and Ethics and our Code of Ethics for Senior Financial Officers are available for review on our website
at www.investor.fnf.com.
ENVIRONMENTAL,
SOCIAL AND GOVERNANCE OVERVIEW
FNF’s
work to address Environmental, Social and Governance (ESG) issues is foundational to our success and integral to who we are as
a company. We recognize the importance of a sustainable future to FNF’s long-term growth, and our Company and board of directors
are committed to addressing ESG issues to better serve our employees, business partners, and the communities impacted by our business
operations.
Building
a sustainable business starts with being transparent about our business practices, corporate governance, environmental impact, and our
commitments to our stakeholders. Since we published our inaugural Sustainability Report in 2019, we have continued to enhance our ESG
efforts, disclosing our progress through annual reporting and on our website. To learn more about our efforts, please view our most recent
reports via our website, www.fnf.com/sustainability.
We anticipate publishing our 2022 report in June 2023.
Our
commitment to ESG focuses on:
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Protecting
Homeownership: Our policyholders depend on the strength and security of a reputable title insurance company to protect their home
for years to come. As a provider of title insurance, we protect the rights of the insured – both residential and commercial property
owners – against unexpected legal and financial claims that may arise after closing.
Consumer
Data and Fraud Protection: The safety and security of our property owners, policyholders and customers is our top priority. This means
ensuring rigorous information security through continuous enhancements to our cybersecurity and data protection standards, internal auditing
protocols and consistent monitoring, to protect the safety of customer funds and nonpublic personal information. We work hard to educate
our employees and protect consumers from fraud by enhancing our fraud prevention programs.
Preserving
the Environment: FNF works to integrate environmental management practices into our operations, including our facilities. We have
a number of efforts underway to reduce our environmental footprint across our locations. As part of a traditionally paper-intensive industry,
we have implemented customer-focused technology to significantly reduce paper consumption in real estate transactions, moving the title
insurance industry in a more sustainable paper-less direction. Our efforts also include participating in recycling programs and eliminating
the use of plastic water bottles. Beyond our mitigation efforts, we understand our responsibility to protect the local environments in
which we operate. In 2022, through our Enterprise Risk Management systems, we conducted our first climate risk assessment to understand
and identify climate-related risks and opportunities that may impact our business. We are evaluating this information to develop strategies
and manage those risks and opportunities over time.
Supporting
Our Employees and Communities: As our greatest asset, we are committed to providing our employees with opportunities to expand their
knowledge base and develop skills for career advancement. We are committed to fostering an inclusive workplace, and we strongly believe
that the diversity of our clients should be reflected among our employees. With over 1,400 locations throughout the United States and
Canada, and over 21,000 employees, we are positioned to make a difference within the communities in which we operate. Through local community
involvement, corporate initiatives, and philanthropic giving – as well as an active community volunteer ethos – we work hard
to support the communities where we live and operate.
Operating
Ethically: Our reputation for integrity is vital to our culture and business operations. We operate in ways that are fair, transparent,
and compliant. We implement strong governance practices, policies, training, and reporting avenues to promote business integrity.
KEY
2022 ESG ACCOMPLISHMENTS
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Continue
to monitor risks and opportunities related to our climate risk assessment |
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Enhanced
scope of formal GHG Inventory Accounting |
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Revised
and developed key policies/statements to reflect our on-going commitment to sustainability and mitigating climate-related risk |
BOARD
AND ESG OVERSIGHT
FNF
is committed to strong governance systems and policies that ensure fair, transparent and efficient business practices. To honor that commitment,
our management team leads our ESG efforts with oversight from the audit committee, which reports our ESG progress and efforts to the board
of directors.
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ESG
DUE DILIGENCE
ESG
is embedded across FNF’s approach to mergers and acquisitions. In order to maximize the value of each of our diverse assets, our
management team takes a holistic approach and reviews ESG practices that are material to a potential investment. We believe that managing
ESG issues in our mergers and acquisitions helps FNF generate stronger returns for our shareholders while improving our impact on the
community.
ESG
RISK MANAGEMENT
FNF
recognizes that ESG risks, including climate change and severe weather conditions, cybersecurity breaches, pandemic diseases, and other
catastrophic events may impact our business. At FNF, we manage material risks, including ESG risks, through our Enterprise Risk Management
(ERM) program. Our ERM program is overseen by our Chief Risk Officer. Our Chief Risk Officer reports to the audit committee of
our board of directors on a regular basis about our ERM and Business Continuity programs. At the management level, FNF manages risk, including
climate risk, through a cross-functional committee of members of senior management known as the Enterprise Risk Steering Committee (ERSC).
The diversity of this group allows for identification of key enterprise risks, from strategic, operational, financial, legal, information
technology and security, and compliance perspectives.
Our
ERM program works diligently to identify, assess, and manage risks. This includes conducting risk assessments on our material risks, including
environmental risks, and reviewing proposed new products and services for possible climate impacts outside of current operations. In 2021,
we conducted our first climate risk assessment to understand climate-related risks that may impact our business and integrated the mitigation
of those risks into our ERM program. In conjunction with its climate risk assessment, FNF enhanced and developed key policies and statements
to further embed consideration of climate risk into business strategy and financial planning. These changes include creation of the Environmental
Policy Statement, modifications to ERM Program Management, and inclusion of climate-risk as a due diligence consideration for acquisitions
and new products and service offerings. FNF also revised its existing Investment Policy to incorporate consideration of material climate
risk as part of its investment strategy. FNF identifies and monitors numerous risks that could have a detrimental impact on its investment
portfolio. These include risks that relate to the changing domestic and global market for energy generation and the related regulatory
environment.
We
maintain a dedicated Business Continuity Office (BCO) that is responsible for the implementation of the BCO program and reports
to the Chief Risk Officer. Our BCO program is part of our ERM program and creates plans for our core products, processes, and services
that include predetermined actions to be taken, resources to be used, and procedures to be followed before, during, and after a disaster.
FNF’s
headquarters are in Jacksonville, Florida, an area at high risk of hurricane and flood damage. We have taken steps to harden our corporate
offices in Jacksonville and have provided the majority of our employees with the tools they need to work from home.
DIVERSITY
We
understand the importance of diversity to FNF’s success. We believe that the diversity of our employees, through the variety of
their ideas, perspectives, and experiences, allows us to offer
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our
customers meaningful and customized products and services. FNF considers inclusivity with respect to all aspects of our business operations;
particularly with respect to hiring, compensation, and growth opportunity. We are committed to being an equal opportunity employer and
enhancing diversity and inclusion efforts across our business.
FNF’s
goal is to foster an inclusive workplace, where each employee receives equal access to opportunities throughout the organization. We prohibit
employment discrimination on the basis of race, color, creed, religion, age, sex/gender, pregnancy, national origin or ancestry, citizenship
status, veteran status, marital status, physical or mental disability, sexual orientation, gender identity or expression (including transgender
status), genetic information and/or any other characteristic protected by applicable federal, state or local laws.
FNF’s
corporate policies, such as its Code of Business Conduct & Ethics, Harassment, Discrimination, and Bullying Policy, Americans with
Disabilities Act Compliance Policy, and Workplace Violence Prevention Policy, prohibit discrimination and harassment. Our Employee Handbook
contains our Equal Employment Opportunity and other non-discrimination statements. Annually, employees must acknowledge our key corporate
non-discrimination policies and complete trainings including: Code of Business Conduct and Ethics Training, and Reporting Harassment:
Everyone’s Responsibility. FNF maintains an open-door culture that encourages both employee feedback and provides employees several
channels through which to report potential violations.
We
have many women in leadership roles throughout our organization. As of January 31, 2023, out of approximately 19,000 U.S.-based FNF employees,
70% are women and 30% are men. Two out of eleven board members are women, 42% percent of the members of FNF’s leadership team are
women and 68% of FNF’s non-executive managers are women. Our annual Women in Leadership Program for female executives, managers,
and future managers is designed to encourage and promote women into more active leadership roles within FNF.
Our
board of directors leads by example in its commitment to diversity. In 2018, our board’s commitment to consider diversity when selecting
new director nominees, including diversity of viewpoints, background, experience, and other demographics such as age, nationality, race,
ethnicity, and sexual orientation, is codified in our Corporate Governance Guidelines. FNF’s corporate governance and nominating
committee is responsible for identifying and nominating future FNF board members. The corporate governance and nominating committee’s
charter requires it to consider the characteristics of directors and director nominees with the goal of maintaining a mix of skills, background,
gender diversity, ethnic diversity, and tenure on the board to support and promote the Company’s strategic vision.
DATA
PRIVACY AND CYBERSECURITY
FNF
is highly dependent on information technology. We are focused on making strategic investments in information security to protect our clients
and our information systems. Our investments include both capital expenditures and operating expenses for hardware, software, personnel
and consulting services. As our primary solutions and services evolve, we apply a comprehensive approach to the mitigation of identified
security risks. We have established policies, including those related to privacy, information security and cybersecurity, and we employ
a broad and diversified set of risk monitoring and risk mitigation techniques.
Internal
audits, external audits, regulatory reviews and self-assessments are conducted to assess the effectiveness and maturity of our Enterprise
Risk Management and Information Security Program
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on
a recurring basis. We maintain Miscellaneous Professional Liability insurance which provides coverage for cybersecurity incidents as part
of our insurance program.
Our
board has a strong focus on cybersecurity. Our approaches to cybersecurity and privacy are overseen by the audit committee. At each regular
meeting of the audit committee of our board of directors, our Chief Risk Officer, Chief Compliance Officer, Chief Information Security
Officer and Chief Internal Auditor provide reports relating to existing and emerging risks, including, as appropriate, risk assessments,
cyber and data security risks and any security incidents. Our audit committee chairman reports on these discussions to our board of directors
on a quarterly basis. In addition, our audit committee chairman and one of our other audit committee members have attended third-party
director education courses on cybersecurity and privacy issues and trends in recent years.
Our
employees are one of our strongest assets in protecting our customers’ information and mitigating risk. We maintain comprehensive
and tailored training programs that focus on applicable privacy, security, legal and regulatory requirements that provide ongoing enhancement
of the security and risk culture at FNF. We continue to provide strong focus on all areas of cybersecurity including threat and vulnerability
management, security monitoring, identity and access management, phishing awareness, risk oversight third-party risk management, disaster
recovery and continuity management. Our employees participate in annual trainings including: Information Security Training, Records Management:
Managing and Safeguarding Records Training and Understanding and Protecting Privacy Training.
THE
BOARD
Our
board is composed of William P. Foley, II (Chairman), Raymond R. Quirk (Executive Vice-Chairman), Douglas K. Ammerman, Halim Dhanidina,
Thomas M. Hagerty, Daniel D. (Ron) Lane, Sandra D. Morgan, Heather H. Murren, John D. Rood, Peter O. Shea, Jr. and Cary H. Thompson.
Our
board met five times in 2022. All directors attended at least 75% of the meetings of the board and of the committees on which they served
during 2022. Our non-management directors also met periodically in executive sessions without management, and our Lead Director presides
over these executive sessions. We do not, as a general matter, require our board members to attend our annual meeting of shareholders,
although each of our directors is invited to attend our 2023 annual meeting. During 2022, none of our board members attended the annual
meeting of shareholders.
MAJORITY
VOTING
Our
board of directors has implemented “majority voting” in uncontested director elections. Pursuant to Section 3.1 of our bylaws,
each director is elected by a majority of the votes cast with respect to the director at any meeting for the election of directors at
which a quorum is present. However, if as of 10 days in advance of the date we file our proxy statement with the SEC the number of director
nominees exceeds the number of directors to be elected in such election (a contested election), the directors are elected by a plurality
of the votes cast.
In
an uncontested election of directors, any incumbent director who does not receive a majority of the votes cast will promptly tender his
resignation to the board of directors. The board will decide, after considering the recommendation of the corporate governance and nominating
committee,
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whether
to accept or reject the tendered resignation, or whether other action should be taken. The director nominee in question will not participate
in the recommendation or decision-making process. We will publicly disclose an explanation by the board of its decision within 90 days
after we publish the election results. If the board determines to accept a director’s resignation, or if a director nominee who
is not an incumbent director is not elected, then the board, in its sole discretion, may fill any resulting vacancy in accordance with
our bylaws.
DIRECTOR
INDEPENDENCE
All
of our directors are non-employees other than Mr. Foley, who serves as Executive Chairman of our majority owned subisidiary F&G since
November 2022, and Mr. Quirk, who served as our Chief Executive Officer until February 1, 2022 when he assumed the role of Executive Vice-Chairman.
The board of directors has determined that Douglas K. Ammerman, Halim Dhanidina, Daniel D. Lane, Sandra D. Morgan, Heather H. Murren,
John D. Rood, Peter O. Shea, Jr. and Cary H. Thompson are independent under the criteria established by the New York Stock Exchange and
our Corporate Governance Guidelines. The board of directors also reviewed the additional New York Stock Exchange (NYSE) independence
considerations applicable to compensation committee members and determined that Messrs. Lane and Thompson and Ms. Murren are independent
for purposes of service on the compensation committee.
In
determining independence, the board considered all relationships that might bear on our directors’ independence from FNF. The board
determined that Mr. Quirk is not independent because he was our Chief Executive Officer and is currently our Executive Vice-Chairman and
an employee of FNF. The board of directors also determined that William P. Foley, II is not independent because he is Executive Chairman
and employee of F&G and a Senior Managing Director of Trasimene Capital Management, LLC (Trasimene), to which we paid a transaction
fee of approximately $27.9 million in 2020 pursuant to a services agreement between us and Trasimene. The board determined that Thomas
M. Hagerty is not independent because Mr. Hagerty is a Managing Director of Thomas H. Lee Partners, L.P. (THL) and FNF paid THL
approximately $90 million in connection with the purchase of THL’s minority interest in ServiceLink Holdings, LLC in July 2020.
For additional information concerning these transactions, see the section titled “Certain Relationships and Related Transactions”
below.
In
considering the independence of Douglas K. Ammerman, Sandra D. Morgan, Heather H. Murren, John D. Rood and Cary H. Thompson, the board
of directors considered the following factors:
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Messrs.
Ammerman and Rood each own a small non-voting minority interest in Black Knight Sports and Entertainment LLC, which owns the Vegas Golden
Knights. Mr. Foley is the majority interest holder, and is Chairman and Chief Executive Officer of Black Knight Sports and Entertainment
LLC. Messrs. Ammerman and Rood each also own minority interests in Black Knight Football and Entertainment, LP (BKFE), which owns
the AFC Bournemouth football club. Mr. Foley is the general partner of BKFE and owns an approximate 25% economic interest in BKFE. |
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Mr.
Thompson is an Executive Vice Chairman of Bank of America Merrill Lynch, and FNF made payments to and received payments from entities
affiliated with Bank of America Merrill Lynch in 2020 and 2021. The board of directors determined that these payments do not impair Mr.
Thompson’s independence because his compensation from Bank of America Merrill Lynch is not dependent on the amount of business Bank
of America Merrill Lynch or its affiliates does with FNF or its subsidiaries. |
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Mr.
Ammerman serves on the board of directors of Dun & Bradstreet Holdings, Inc. (DNB). Mr. Foley serves as Executive Chairman
of the board of directors of DNB, and he and Cannae Holdings, Inc (Cannae), which was split-off from FNF in November 2017, are
significant investors in DNB. |
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Messrs.
Ammerman and Rood serve on the board of directors of majority-owned subsidiary F&G. |
The
board of directors determined that these relationships were not of a nature that would impair their independence.
COMMITTEES
OF THE BOARD
The
board has four standing committees: an audit committee, a compensation committee, a corporate governance and nominating committee and
a related person transaction committee. The charter of each standing committee is available on the Investor Info page of our website at
www.fnf.com.
Each committee reviews its charter annually. Shareholders also may obtain a copy of any of these charters by writing to the Corporate
Secretary at the address set forth under “Available Information” below.
CORPORATE
GOVERNANCE AND NOMINATING COMMITTEE
The
members of the corporate governance and nominating committee are Peter O. Shea, Jr. (Chair), Sandra D. Morgan and John D. Rood. Each of
Messrs. Shea, Rood and Ms. Morgan was deemed to be independent by the board, as required by the New York Stock Exchange. The corporate
governance and nominating committee met one time in 2022.
The
primary functions of the corporate governance and nominating committee, as identified in its charter, are:
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Identifying
individuals qualified to become members of the board and making recommendations to the board regarding nominees for election; |
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Reviewing
the independence of each director and making a recommendation to the board with respect to each director’s independence; |
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Overseeing the
evaluation of the performance of the board and its committees on a continuing basis, including an annual self-evaluation of the performance
of the corporate governance and nominating committee; |
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Developing
and recommending to the board the corporate governance principles applicable to us and reviewing our corporate governance guidelines at
least annually; |
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Making
recommendations to the board with respect to the membership of the audit, compensation and corporate governance and nominating committees; |
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Considering
director nominees recommended by shareholders; and |
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Reviewing
our overall corporate governance and reporting to the board on its findings and any recommendations. |
AUDIT
COMMITTEE
The
members of the audit committee are Douglas K. Ammerman (Chair), Heather H. Murren and John D. Rood. The board has determined that each
of the audit committee members is financially
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literate
and independent as required by the rules of the Securities and Exchange Commission and the New York Stock Exchange, and that each of Mr.
Ammerman, Ms. Murren and Mr. Rood is an audit committee financial expert, as defined by the rules of the Securities and Exchange Commission.
The audit committee met six times in 2022.
The
primary functions of the audit committee include:
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Appointing,
compensating and overseeing our independent registered public accounting firm; |
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Overseeing
the integrity of our financial statements and our compliance with legal and regulatory requirements; |
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Discussing the
annual audited financial statements and unaudited quarterly financial statements with management and the independent registered public
accounting firm; |
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Establishing
procedures for the receipt, retention and treatment of complaints (including anonymous complaints) we receive concerning accounting, internal
accounting controls, auditing matters or potential violations of law; |
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Approving
audit and non-audit services provided by our independent registered public accounting firm; |
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Discussing
earnings press releases and financial information provided to analysts and rating agencies; |
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Discussing
with management our policies and practices with respect to risk assessment and risk management, including those relating to ESG risk,
including human capital management and health and safety risk; |
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Reviewing
any material transaction between our Chief Financial Officer or Chief Accounting Officer that has been approved in accordance with our
Code of Ethics for Senior Financial Officers, and providing prior written approval of any material transaction between us and our Chief
Executive Officer; and |
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Producing
an annual report for inclusion in our proxy statement, in accordance with applicable rules and regulations. |
REPORT
OF THE AUDIT COMMITTEE
The
audit committee of the board of directors submits the following report on the performance of certain of its responsibilities for the year
2022:
The
primary function of our audit committee is oversight of (i) the quality and integrity of our financial statements and related disclosures,
(ii) our compliance with legal and regulatory requirements, (iii) the independent registered public accounting firm’s qualifications
and independence, and (iv) the performance of our internal audit function and independent registered public accounting firm. The audit
committee also oversees ESG risk and is responsible for reporting to the board on FNF’s ESG initiatives. Our audit committee acts
under a written charter, and we review the adequacy of our charter at least annually. Our audit committee is comprised of the three directors
named below, each of whom has been determined by the board of directors to be independent as defined by New York Stock Exchange independence
standards. In addition, our board of directors has determined that each of Mr. Ammerman, Ms. Murren and Mr. Rood is an audit committee
financial expert as defined by the rules of the Securities and Exchange Commission.
In
performing our oversight function, we reviewed and discussed with management and Ernst & Young LLP, or EY, our independent registered
public accounting firm, our audited financial
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statements
as of and for the year ended December 31, 2022. Management and EY reported to us that our consolidated financial statements present fairly,
in all material respects, the consolidated financial position and results of operations and cash flows of FNF and its subsidiaries in
conformity with generally accepted accounting principles. We also discussed with EY matters required to be discussed by the applicable
requirements of the Public Company Accounting Oversight Board and the SEC.
We
have received and reviewed the written disclosures and the letter from EY required by applicable requirements of the Public Company Accounting
Oversight Board regarding the independent accountant’s communications with the audit committee concerning independence and have
discussed with EY their independence. In addition, we have considered whether EY’s provision of non-audit services to us is compatible
with their independence.
Finally,
we discussed with our internal auditors and EY the overall scope and plans for their respective audits. We met with EY at each meeting.
Management was present for some, but not all, of these discussions. These discussions included the results of their examinations, their
evaluations of our internal controls and the overall quality of our financial reporting.
Based
on the reviews and discussions referred to above, we recommended to our board of directors that the audited financial statements referred
to above be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and that EY be appointed independent
registered public accounting firm for FNF for 2023.
In
carrying out our responsibilities, we look to management and the independent registered public accounting firm. Management is responsible
for the preparation and fair presentation of our financial statements and for maintaining effective internal control. Management is also
responsible for assessing and maintaining the effectiveness of internal control over the financial reporting process. The independent
registered public accounting firm is responsible for auditing our annual financial statements and expressing an opinion as to whether
the statements are fairly stated in conformity with generally accepted accounting principles. The independent registered public accounting
firm is also responsible for auditing our internal controls and expressing an opinion as to whether the Company maintained, in all material
respects, effective internal control over financial reporting based on criteria established in Internal Control – Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
The
independent registered public accounting firm performs its responsibilities in accordance with the standards of the Public Company Accounting
Oversight Board. Our members are not professionally engaged in the practice of accounting or auditing, and are not experts under the Securities
Exchange Act of 1934, as amended, in either of those fields or in auditor independence.
The
foregoing report is provided by the following independent directors, who constitute the committee:
AUDIT
COMMITTEE
Douglas
K. Ammerman (Chair)
Heather
H. Murren
John
D. Rood
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COMPENSATION
COMMITTEE
The
members of the compensation committee are Heather H. Murren (Chair), Daniel D. Lane and Cary H. Thompson. Each of Ms. Murren and Messrs.
Lane and Thompson was deemed to be independent by the board, as required by the New York Stock Exchange. The compensation committee met
four times during 2022. The functions of the compensation committee include the following:
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Revewing
and approving corporate goals and objectives relevant to the Chief Executive Officer’s compensation, evaluating his performance
in light of those goals and objectives, and setting the Chief Executive Officer’s compensation level based on this evaluation; |
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Setting salaries
and approving incentive compensation and equity awards, as well as compensation policies, for all other officers who are designated as
Section 16 officers by our board; |
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Producing
an annual report for inclusion in |
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our
proxy statement, in accordance with applicable rules and regulations; |
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Making
recommendations to the board with respect to incentive compensation programs and equity-based plans that are subject to board approval; |
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Granting
any awards under equity compensation plans and annual bonus plans to our Chief Executive Officer and other Section 16 Officers; and |
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Approving
the compensation of our directors. |
For
more information regarding the responsibilities of the compensation committee, please refer to the section of this proxy statement entitled
“Compensation Discussion and Analysis and Executive and Director Compensation” above.
RELATED
PERSON TRANSACTION COMMITTEE
The
members of the compensation committee are Halim Dhanidina (Chair) and Sandra D. Morgan. Each of Judge Dhanidina and Ms. Morgan was deemed
to be independent by the board, as defined by the New York Stock Exchange. The related person transaction committee was established by
our board in August 2022. The functions of the related person transaction committee include the following:
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Reviewing
and considering the approval or ratification of transactions that arise under the Company’s Related Person Transaction Policy (the
RPT Policy); |
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Conducting
an annual review of all Related Person Transactions (as defined in the RPT Policy); and |
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Performing
any other duties or responsibilities expressly delegated to the related person transaction committee by the board from time to time. |
BOARD
LEADERSHIP STRUCTURE
We
have separated the positions of CEO and Chairman of the board of directors in recognition of the differences between the two roles. As
our non-executive Chairman of the board, Mr. Foley, while no longer an executive or involved in the day-to-day operation of FNF, continues
to be the
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driving
force behind the development and execution of our strategic direction. On February 1, 2022, Raymond R. Quirk assumed the role of Executive
Vice-Chairman of our board and Michael J. Nolan assumed the role of Chief Executive Officer. As Executive Vice-Chairman, Mr. Quirk continues
to promote our real estate technology efforts, the expansion of our digital initiatives, and strategic investments in title insurance
and technology related M&A activities. Mr. Nolan, who formerly served as our President, assumed the expanded responsibilities of CEO
and leads all activities related to the growth and expansion of our title insurance related businesses and operations, overall financial
performance, and investor relations.
Douglas
K. Ammerman, one of our independent directors, serves as our Lead Director. The board considers it to be useful and appropriate to designate
a Lead Director to coordinate the activities of the other non-employee directors and to perform such other duties and responsibilities
as the board may determine. Mr. Ammerman has extensive board governance experience and has a deep understanding of the Company’s
business from serving on our board for over 15 years and serving as a partner of KPMG for 18 years. Since commencing service as our Lead
Independent Director, Mr. Ammerman has provided a clear and independent voice on the Board that appropriately balances our leadership
structure. Our Corporate Governance Guidelines define the responsibilities of the Lead Director, which include:
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Preside at meetings
of the board of directors in the absence of, or upon the request of, the Chairman; |
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Review
board meeting agendas and schedules in collaboration with the Chairman and recommend matters for the board to consider and information
to be provided to the board; |
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Serve
as a liaison and supplemental channel of communication between non-employee/ independent directors and the Chairman without inhibiting
direct communications between the Chairman and other directors; |
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Serve
as the principal liaison for consultation and communication between the non-employee/independent directors and shareholders; |
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Advise
the Chairman concerning the retention of advisors and consultants who report directly to the board; and |
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Be
available to major shareholders for consultation and direct communication. |
BOARD
ROLE IN RISK OVERSIGHT
The
board of directors administers its risk oversight function directly and through committees. The audit committee oversees FNF’s financial
reporting process, risk management program, including ESG risk, legal and regulatory compliance, performance of the independent auditor,
internal audit function, and financial and disclosure controls. Management also reports quarterly to the audit committee and the board
of directors regarding claims, and the audit committee receives quarterly reports on compliance matters. Our audit committee also oversees
our environmental sustainability policies and programs.
Our
board has a strong focus on cyber-security. At each regular meeting of the audit committee, our Chief Risk Officer, Chief Compliance Officer,
Chief Information Security Officer and Chief Internal Audit Officer provide reports relating to our cyber and data security practices,
risk assessments, emerging issues and any security incidents. Our audit committee chairman reports on these
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discussions
to our board of directors on a quarterly basis. In addition, Mr. Rood and Mr. Ammerman have attended third-party director education courses
on cyber-security and privacy issues and trends. Judge Dhanidina holds a certificate in Board Governance from the UCLA Anderson School
of Management and certain of our other directors have attended various director continuing education programs.
The
corporate governance and nominating committee considers the adequacy of FNF’s governance structures and policies. The compensation
committee reviews and approves FNF’s compensation and other benefit plans, policies and programs and considers whether any of those
plans, policies or programs creates risks that are likely to have a material adverse effect on FNF. Each committee provides reports on
its activities to the full board of directors.
On
an ongoing basis management identifies strategic risks of FNF and aligns both its disclosure controls and procedures and its annual audit
plan with the identified and addressable risks. Risks are evaluated over all timeframes, however the focus of management’s risk
assessment is on risks to the long term viability of FNF. Risks with the potential for an adverse impact to the Company in the near term
are prioritized to the extent they present a risk to the viability of the Company. Management presents updates on the current year progress
of the Company’s risk management program to the audit committee quarterly.
CONTACTING
THE BOARD
Any
shareholder or other interested person who desires to contact any member of the board or the non-management members of the board as a
group may do so by writing to: Board of Directors, c/o Corporate Secretary, Fidelity National Financial, Inc., 601 Riverside Avenue, Jacksonville,
FL 32204. Communications received are distributed by the Corporate Secretary to the appropriate member or members of the board.
CERTAIN
INFORMATION ABOUT OUR DIRECTORS
DIRECTOR
CRITERIA, QUALIFICATIONS AND EXPERIENCE AND PROCESS FOR SELECTING DIRECTORS
FNF
is a leading provider of title insurance, escrow and other title-related services, including trust activities, trustee sales guarantees,
recordings and reconveyances and home warranty products, as well as transaction services to the real estate and mortgage industries. Title
insurance revenue is closely related to the level of real estate activity which includes sales, mortgage financing and mortgage refinancing.
The levels of real estate activity are primarily affected by the average price of real estate sales, the availability of funds to finance
purchases and mortgage interest rates. As of March 2023, the Mortgage Bankers Association’s (MBA) Mortgage Finance Forecast
predicts residential purchase transactions to decrease in 2022 and 2023 followed by increases in 2024 and 2025. Additionally, the MBA
forecasted residential refinance transactions to dramatically decrease in 2022, followed by a further decrease in 2023 before increasing
in 2024 and 2025. The MBA expects overall mortgage originations to decrease in 2022 and 2023 before increasing in 2024 and 2025.
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We
continually monitor mortgage origination trends and believe that, based on our ability to produce industry-leading operating margins through
all economic cycles, we are well-positioned to adjust our operations for adverse changes in real estate activity and to take advantage
of increased volume when demand increases.
We
are also a provider of annuity and life insurance products through our majority-owned subsidiary F&G. F&G provides a diversification
of our cash and income streams away from title insurance and is expected to provide predictable income that is counter-cyclical that performs
best in a rising long-term interest rate environment through an attractive retirement insurance business with strong growth tailwinds
as demand for retirement insurance products are propelled by an aging demographic.
F&G
is a great example of our long history of making strategic investments and acquisitions in other companies, both within and outside of
our core title business, and driving shareholder value creation through identifying cost savings, undertaking strategy shifts, eliminating
siloed organizational structures and accelerating product expansion.
In
2023, our board and management team will be focused on the organic growth of our core title operations while carefully managing expenses
to address any changes in the mortgage industry as a result of the current economic environment, including rising inflation and interest
rates, and other macro-economic factors. The board and management team, especially Messrs. Foley, Ammerman, Nolan, Quirk and Rood who
serve on the F&G board, will also be focused on the successful execution of F&G’s strategic plan.
Our
board and the corporate governance and nominating committee are committed to including the best available candidates for nomination to
election to our board based on merit. Our board and our corporate governance and nominating committee periodically evaluate our board’s
composition with the goal of developing a board that meets our strategic goals, and one that includes diverse, experienced and highly
qualified individuals.
The
corporate governance and nominating committee does not set specific, minimum qualifications that nominees must meet for the committee
to recommend them to the board, but rather believes that each nominee should be evaluated based on his or her individual merits, taking
into account our needs and the overall composition of the board. In accordance with our Corporate Governance Guidelines, the corporate
governance and nominating committee considers, among other things, the following criteria in fulfilling its duty to recommend nominees
for election as directors:
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Personal
qualities and characteristics, accomplishments and reputation in the business community; |
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Current
knowledge and contacts in the communities in which we do business and, in our industry, or other industries relevant to our business; |
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Ability
and willingness to commit adequate time to the board and committee matters; |
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The
fit of the individual’s skills and personality with those of other directors and potential directors in building a board that is
effective, collegial and responsive to our needs; and |
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Diversity
of viewpoints, background, experience, and other demographics, and all aspects of diversity to enable the Board to perform its duties
and responsibilities effectively, including candidates with a diversity of age, gender, nationality, race, ethnicity, and sexual orientation. |
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Each
year in connection with the nomination of candidates for election to the board, the corporate governance and nominating committee evaluates
the background of each candidate, including candidates that may be submitted by shareholders.
COMPOSITION,
TENURE, RECENT REFRESHMENT AND DIVERSITY
We
believe that the current composition of our board has served us well and that our current directors possess relevant experience, skills
and qualifications that contribute to a well-functioning board that effectively oversees our long-term strategy. As the need arises, we
selectively add new board members who have important skill sets, experience or diversity of viewpoint. For example, in 2020, our board
elected Sandra D. Morgan to serve as a director. Ms. Morgan brings to our board a strong legal and regulatory background as an attorney
and former Chair of the Nevada Gaming Control Board. In 2021, we added the Honorable Halim Dhanidina, who has a strong legal background
and understanding of the regulatory landscape and corporate governance. Both Ms. Morgan and Judge Dhanidina add to the diversity of our
board. Our board is composed of a mix of directors, some of whom have served on our board since our initial public offering and have a
strong understanding of our business, operational and strategic goals, as well as our industry and the risks we face, and others who have
joined our board in more recent years and bring new skills, experience and perspectives to our board. Having directors with a longevity
of service and deep understanding of our business has been critical to our ability to effectively execute on our long-term strategy, but
we have recognized the importance of adding new highly talented directors to broaden the skills and experience of our board as a whole
and add new and diverse viewpoints. In the last six years, we have added three diverse directors to our board.
Our
corporate governance and nominating committee regularly examines ways that it can foster the diversity of our board across many dimensions
to maintain its ability to operate at a high-functioning level and to reflect the board’s commitment to inclusiveness. In connection
with this examination, our Corporate Governance Guidelines expressly include diversity of age, gender, nationality, race, ethnicity, and
sexual orientation as a part of the criteria the committee may consider when selecting nominees for election to the board, all in the
context of the needs of our board at any given point in time. Specifically, the corporate governance and nominating committee is focused
on considering highly qualified women and individuals from minority groups as candidates for nomination as directors.
PROXY
ACCESS
Our
bylaws include a “proxy access” procedure for shareholder director nominations. Pursuant to Section 3.1 of our bylaws, a shareholder,
or a group of up to 25 shareholders, may include in our proxy materials director nominees constituting up to two individuals or 20% of
our board, whichever is greater, provided that:
|
• |
The
nominating shareholder(s) own shares representing 3% or more of the total voting power of the Company’s outstanding shares of capital
stock entitled to vote in the election of directors; |
|
• |
The
nominating shareholder(s) have owned that number of shares continuously for at least three years; and |
|
• |
The
nominating shareholder(s) and their director nominee(s) otherwise satisfy the applicable requirements of Section 3.1 of the amended and
restated bylaws. |
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Fidelity
National Financial, Inc. |
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The
corporate governance and nominating committee considers qualified candidates suggested by current directors, management and our shareholders.
A shareholder who wishes to suggest a qualified candidate for director to the corporate governance and nominating committee but does not
meet the requirements described above may do so by writing to our Corporate Secretary at 601 Riverside Avenue, Jacksonville, Florida 32204.
The submission must provide the information required by, and otherwise comply with the procedures set forth in, Section 3.1 of our bylaws.
Section 3.1 also requires that the nomination notice be submitted by a prescribed time in advance of the meeting. See “Shareholder
Proposals and Nominations” below.
INFORMATION
ABOUT THE DIRECTOR NOMINEES AND CONTINUING DIRECTORS
The
matrix on the next page lists the skills and experience that we consider most important for our directors in light of our current business
and structure. In addition, biographical information concerning our nominees proposed for election at the annual meeting as Class II directors
of the Company, as well as our continuing Class I and Class III directors, including each director’s relevant experience, qualifications,
skills and diversity, is included.
23 |
Fidelity
National Financial, Inc. |
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BOARD
OF DIRECTORS |
Board
Skill or Qualification: |
William
P. Foley II (Chair) |
Raymond
R. Quirk (Executive
Vice-Chairman) |
Douglas
K. Ammerman |
Halim
Dhanidina |
Thomas
M. Hagerty |
Daniel
D. Lane |
Sandra
D. Morgan |
Heather
H. Murren |
John
D. Rood |
Peter
O. Shea, Jr. |
Cary
H. Thompson |
Board
of Directors Experience |
● |
● |
● |
|
● |
● |
● |
● |
● |
● |
● |
Industry
Experience |
● |
● |
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|
|
● |
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● |
● |
|
CEO/Business
Head/Leadership |
● |
● |
|
● |
|
● |
● |
● |
● |
● |
● |
International |
● |
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● |
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● |
Human
Capital Management/Compensation |
● |
● |
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● |
● |
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● |
● |
● |
Finance/Capital
Allocation |
● |
● |
● |
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● |
● |
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● |
● |
● |
● |
Financial
Literacy |
● |
● |
● |
|
● |
● |
● |
● |
● |
● |
● |
Regulatory |
● |
● |
● |
● |
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● |
● |
● |
● |
Real
Estate |
● |
● |
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● |
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● |
● |
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Risk
Management |
● |
● |
● |
● |
● |
● |
● |
● |
● |
● |
● |
Corporate
Governance |
● |
● |
● |
● |
● |
● |
● |
● |
● |
● |
● |
Technology/Systems |
● |
● |
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● |
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Legal |
● |
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● |
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Marketing/Sales |
● |
● |
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● |
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● |
● |
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● |
Demographics |
Race/
Ethnicity |
African
American |
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● |
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Asian
/ Pacific Islander |
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White/Caucasian |
● |
● |
● |
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● |
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● |
Hispanic
/ Latino |
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Native
American |
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Gender |
Male |
● |
● |
● |
● |
● |
● |
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● |
● |
● |
Female |
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● |
● |
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Board
Tenure |
17 |
6 |
17 |
2 |
17 |
17 |
3 |
6 |
9 |
16 |
17 |
Age |
78 |
76 |
71 |
50 |
60 |
88 |
45 |
56 |
68 |
56 |
65 |
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Fidelity
National Financial, Inc. |
24 |
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Nominees
for Class III Directors – Term Expiring 2026 (if elected) |
Name |
Position |
William
P. Foley, II |
Chairman
of the Board |
Douglas
K. Ammerman |
Chairman
of the Audit Committee |
Thomas
M. Hagerty |
Director
|
Peter
O. Shea, Jr. |
Chairman
of the Corporate Governance and Nominating Committee |
William
P. Foley, II. Mr. Foley is a founder
of Fidelity National Financial, Inc. and has served as Chairman of the board of directors of FNF since 1984. He served as Chief Executive
Officer of FNF until May 2007 and as President of FNF until December 1994. Mr. Foley has served as Chairman of Cannae Holdings, Inc. since
July 2017 and non-executive Chairman since May 2018. Mr. Foley is the Managing Member and a Senior Managing Director of Trasimene Capital
Management, LLC, a private company that provides certain management services to CNNE, since 2019. Mr. Foley has also served as non-executive
Chairman of the board of directors of Dun & Bradstreet since February 2019 and as Executive Chairman since February 2022. Mr. Foley
has served as Executive Chairman of F&G since November 2022. Mr. Foley has served as the non-executive Chairman of the board of directors
of Alight, Inc. since April 2021 and served on the board of its predecessor, Foley Trasimene Acquisition Corporation (FTAC) from
May 2020 until April 2021. Mr. Foley served as a director of System1 from January 2022 to March 2023. From January 2014 to June 2021,
Mr. Foley also served as Chairman of the Board of Black Knight, Inc. and its predecessors. He served as non-executive Chairman of the
board of directors of Paysafe and its predecessor, Foley Trasimene Acquisition Corp. II (FTAC II), from March 2020 until March
2022. Mr. Foley formerly served as Co-Chairman of FGL Holdings, as a director of Ceridian HCM Holding Inc. (Ceridian) and as Vice
Chairman of Fidelity National Information Services, Inc. (FIS). Mr. Foley formerly served on the boards of Austerlitz Acquisition
Corporation I (AUS) and Austerlitz Acquisition Corporation II (ASZ) and Trebia Acquisition Corp., which were blank check
companies, but resigned from those boards in April 2021. Mr. Foley formerly served as Chairman of Foley Wines Ltd., a New Zealand company, until March 2023.
Mr.
Foley serves on the boards of various foundations and charitable organizations. Mr. Foley is Executive Chairman and Chief Executive Officer
of Black Knight Sports and Entertainment, LLC, which is the private company that owns the Vegas Golden Knights, a National Hockey League
team.
After
receiving his B.S. degree in engineering from the United States Military Academy at West Point, Mr. Foley served in the U.S. Air Force,
where he attained the rank of captain. Mr. Foley received his Master of Business Administration from Seattle University and his Juris
Doctor from the University of Washington.
Mr.
Foley provides high-value added services to the FNF board. Mr. Foley’s qualifications to serve on the FNF board include more than
30 years as a director and executive officer of Fidelity National Financial, his strategic vision, his experience as a board member and
executive officer of public and private companies in a wide variety of industries, and his strong track record of building and maintaining
shareholder value and successfully negotiating and executing mergers, acquisitions and other strategic transactions.
25 |
Fidelity
National Financial, Inc. |
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Douglas
K. Ammerman. Mr. Ammerman has served
as a director of the Company since 2005. Mr. Ammerman is a retired partner of KPMG LLP, where he became a partner in 1984. Mr. Ammerman
formally retired from KPMG in 2002. He also serves as a director of Stantec Inc. since 2011, where he serves as Chairman, as a director
of F&G since December 2022 and as a director Dun & Bradsteet since February 2019. Mr. Ammerman formerly served on the boards of
El Pollo Loco, Inc., J. Alexander’s Holdings, Inc. and Foley Trasimene Acquistion Corp.
Mr.
Ammerman’s qualifications to serve on the FNF board of directors include his financial and accounting background and expertise,
including his 18 years as a partner with KPMG, and his experience as a director on the boards of other companies.
Thomas
M. Hagerty. Mr. Hagerty has served
as a director of the Company since 2005 and as a director of predecessors of FNF since 2014. Mr. Hagerty is a Managing Director of THL,
which he joined in 1988. Mr. Hagerty has served as a director of Black Knight and its predecessors since January 2014, but announced his
intention to retire from the Black Knight board at its 2023 annual meeting of stockholders. Mr. Hagerty also serves as a director of FleetCor
Technologies since November 2014, Ceridian HCM Holdings, Inc. since September 2013 and Dun & Bradstreet since February 2019. Mr. Hagerty
formerly served on the boards of FTAC, First Bancorp, MoneyGram International and FIS.
Mr.
Hagerty’s qualifications to serve on the FNF board of directors include his managerial and strategic expertise working with large
growth-oriented companies as a Managing Director of THL, a leading private equity firm, and his experience in enhancing value at such
companies, along with his expertise in corporate finance.
Peter
O. Shea, Jr. Mr. Shea has served as
a director of the Company since April 2006. Mr. Shea is the President and Chief Executive Officer of J.F. Shea Co., Inc., a private company
with operations in home building, commercial property development and management and heavy civil construction. Prior to his service as
President and Chief Executive Officer, he served as Chief Operating Officer of J.F. Shea Co., Inc.
Mr.
Shea’s qualifications to serve on the FNF board of directors include his experience in managing multiple and diverse operating companies
and his knowledge of the real estate industry, particularly as President and Chief Executive Officer of J.F. Shea Co., Inc.
Class
I Directors — Term Expiring 2024 |
Name |
Position |
Raymond
R. Quirk |
Executive
Vice-Chairman and Director |
Sandra
D. Morgan |
Member
of the Corporate Governance and Nominating Committee |
Heather
H. Murren |
Member
of the Audit Committee
Chairwoman
of the Compensation Committee |
John
D. Rood |
Member
of the Audit Committee
Member
of the Corporate Governance and Nominating Committee |
|
Fidelity
National Financial, Inc. |
26 |
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Raymond
R. Quirk. Mr. Quirk has served as
Executive Vice-Chairman of our board since February 2022 and formerly served as Chief Executive Officer of FNF since December 2013. He
has served as a director of FNF since February 2017. Previously, he had served as the President of FNF since April 2008. Mr. Quirk served
as Co-President since May 2007 and as Co-Chief Operating Officer of FNF from October 2006 until May 2007. Since joining FNF in 1985, Mr.
Quirk has served in numerous executive and management positions, including Executive Vice President, Division Manager and Regional Manager,
with responsibilities for managing direct and agency operations nationally. Mr. Quirk has also served on the board of directors of F&G
since August 2020 and formerly served on the board of directors of J. Alexander’s Holdings, Inc.
Mr.
Quirk’s qualifications to serve on the FNF board of directors include his more than 35 years of experience with FNF, his deep knowledge
of our business and industry and his strong leadership abilities.
Sandra
D. Morgan. Ms. Morgan has served on
our board since 2020. Ms. Morgan is the President of the Las Vegas Raiders, a member club of the National Football League. She is a past
Chairwoman of the Nevada Gaming Control Board. She was appointed to this role by Governor Steve Sisolak and is the first African-American
to have served as Chair. Ms. Morgan was previously appointed to the Nevada Gaming Commission by Governor Brian Sandoval in April 2018.
While serving as a Commissioner, Ms. Morgan also served as Director of External Affairs for AT&T Services, Inc. from September 2016
to January 2019 and was responsible for managing AT&T’s government and community affairs in Nevada. She previously served as
the City Attorney for the City of North Las Vegas from May 2008 to August 2016 and was the first African-American City Attorney in the
State of Nevada. Prior to her public service with the City of North Las Vegas, Ms. Morgan served as Litigation Attorney for MGM Mirage
(now known as MGM Resorts) from 2005 to May 2008. Ms. Morgan previously served as an Athletic Commissioner on the Nevada State Athletic
Commission and served on the Board of Directors for Jobs for Nevada’s Graduates. Ms. Morgan is currently Of Counsel with Covington
& Burling LLP in multiple practice areas, including gaming, sports and technology, as well as the firm’s regulatory, data privacy
and cybersecurity practice, litigation and investigations and white-collar defense. She also serves on the board of directors of Allegiant
Travel Company since 2021 and formerly served on the board of directors of Caesars Entertainment from November 2021 to July 2022.
Ms.
Morgan’s qualifications to serve on our board include her legal expertise and experience, her governmental and regulatory experience
on the Nevada Gaming Commission, her leadership in both the private and public sectors, and her independence. Our board appointed Ms.
Morgan to serve as Chair of a Special Litigation Committee of our board, which was formed for the purpose of investigating and evaluating
the claims and allegations asserted in a putative derivative action, asserting claims on behalf of the Company, captioned City of Miami
General Employees’ and Sanitation Employees’ Retirement Trust v. William P. Foley, II, et al., and to make a determination
as to how the Company should proceed with respect to such action and the claims and allegations asserted therein.
Heather
H. Murren. Ms. Murren has served on
our board since 2017. Ms. Murren is a private investor. She retired as a Managing Director and group head of Global Securities and Economics
at Merrill Lynch in 2002 after more than a decade on Wall Street. In 2002, Ms. Murren founded the nonprofit Nevada Cancer Institute, a
cancer research and treatment center, where she served as Chairwoman and CEO and then as a board member until the institute merged into
Roseman University in 2013.
27 |
Fidelity
National Financial, Inc. |
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She
was appointed by Congress to serve on the Financial Crisis Inquiry Commission from 2009 to 2011. The Commission’s findings, “The
Financial Crisis Inquiry Report” was listed on the New York Times bestseller list. Ms. Murren was appointed and served as a Commissioner
on the White House Commission on Enhancing National Cybersecurity in 2016. The Commission’s findings were presented to President
Obama in December 2016. She serves on the Board of Trustees of the Johns Hopkins University and Johns Hopkins Medicine and the Chair of
Johns Hopkins University Applied Physics Laboratory. Ms. Murren formerly served on the board of MannKind Corporation.
Ms.
Murren’s qualifications include her strong background in finance gained during her time at Merrill Lynch, her leadership experience
as a group leader at a leading Wall Street firm and as founder, Chair and CEO at various non-profits, and her regulatory and cyber-security
knowledge from serving on the Financial Crisis Inquiry Commission and Commission on Enhancing National Cybersecurity.
John
D. Rood. Mr. Rood has served on our
board of directors since May 2013. Mr. Rood is the founder and Chairman of The Vestcor Companies, a real estate firm with more than 30
years of experience in multifamily development and investment. Mr. Rood has also served on the board of directors of Black Knight since
December 2014 and has served on the board of directors of F&G since December 2022. From 2004 to 2007, Mr. Rood served as the US Ambassador
to the Commonwealth of the Bahamas. He was appointed by Governor Jeb Bush to serve on the Florida Fish and Wildlife Commission where he
served until 2004. He was appointed by Governor Charlie Crist to the Florida Board of Governors, which oversees the State of Florida University
System, where he served until 2013. Mr. Rood was appointed by Mayor Lenny Curry to the JAXPORT Board of Directors, where he served from
October 2015 to July 2016. Governor Rick Scott appointed Mr. Rood to the Florida Prepaid College Board in July 2016, where Mr. Rood serves
as Chairman of the Board. Mr. Rood served on the Enterprise Florida and Space Coast Florida board of directors from September 2016 until
February 2019. He previously served on the board of Alico, Inc. and currently serves on several private boards.
Mr.
Rood’s qualifications to serve on the FNF board of directors include his experience in the real estate industry, his leadership
experience as a United States Ambassador, his financial literacy, his understanding of cyber-security risks gained through director training
programs, and his experience as a director on boards of both public and private companies. Mr. Rood has participated in numerous risk
and audit training programs with KPMG, Booz Allen and the National Association of Corporate Directors, or NACD. He is a Board Leadership
Fellow with NACD.
Class
II Directors – Term Expiring 2025 |
Name |
Position |
Hon.
Halim Dhanidina |
Director |
Daniel
D. (Ron) Lane |
Member
of the Compensation Committee |
Cary
H. Thompson |
Member
of the Compensation Committee |
The
Honorable Halim Dhanidina. Judge Dhanidina
has served as a director of the Company since May 2021. Judge Dhanidina is a retired Associate Justice of the California Court of Appeal
where he served from 2018 until April 2021. He was previously appointed as a Judge of the Los Angeles County Superior Court in 2012, making
him the first Muslim judge in California history.
|
Fidelity
National Financial, Inc. |
28 |
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Judge
Dhanidina has served as a Partner with the firm Werksman, Jackson & Quinn LLP since April 2022. He also teaches law at the University
of California Irvine and Chapman University. He earned a BA in International Relations from Pomona College and a JD from UCLA.
Judge
Dhanidina’s qualifications to sit on our board include his long and distinguished career as a practicing attorney and judge, and
his extensive teaching experience in various areas of law. He also serves as a member of the related person transactions committee of
our board.
Daniel
D. (Ron) Lane. Mr. Lane has served
as a director of the Company since 2005, and as a director of predecessors of FNF since 1989. Since February 1983, Mr. Lane has been a
principal, Chairman and Chief Executive Officer of Lane/Kuhn Pacific, Inc., a corporation comprising several community development and
home building partnerships, all of which are headquartered in Newport Beach, California. Mr. Lane served as a director of CKE Restaurants,
Inc. from 1993 through 2010, and served as a director of Fidelity National Information Services, Inc. (FIS) from February 2006
to July 2008, and as a director of Lender Processing Services, Inc. (LPS) from July 2008 until March 2009. Mr. Lane is also a member
of the Board of Trustees of the University of Southern California.
Mr.
Lane’s qualifications to serve on the FNF board include his extensive experience in and knowledge of the real estate industry, particularly
as Chairman and Chief Executive Officer of Lane/Kuhn Pacific, Inc., his deep knowledge of FNF and our business landscape as a long-time
director, and his experience as a member of the boards of directors of other companies.
Cary
H. Thompson. Mr. Thompson has served
as a director of the Company since 2005, and as a director of predecessors of FNF since 1992. Mr. Thompson currently is Executive Vice
Chairman of Global Corporate and Investment Banking, Bank of America Merrill Lynch, having joined that firm in May 2008. From 1999 to
May 2008, Mr. Thompson was Senior Managing Director and Head of West Coast Investment Banking at Bear Stearns & Co., Inc. Mr. Thompson
served as a director of FIS from February 2006 to July 2008, as a director of Lender Processing Services, Inc. from July 2008 to March
2009, and on the board of managers of Black Knight Financial Services, LLC from January 2014 until April 2015.
Mr.
Thompson’s qualifications to serve on the FNF board include his experience in corporate finance and investment banking, his knowledge
of financial markets, and his expertise in running a large and complex business organization and negotiating and consummating complicated
financial transactions.
29 |
Fidelity
National Financial, Inc. |
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PROPOSAL
NO. 1: ELECTION OF DIRECTORS |
The
certificate of incorporation and the bylaws of the Company provide that our board shall consist of at least one and no more than fourteen
directors. Our directors are divided into three classes. The board determines the number of directors within these limits. The term of
office of only one class of directors expires in each year. The Class III directors elected at this annual meeting will hold office for
their respective terms or until their successors are elected and qualified. The current number of directors is eleven. The board believes
that each of the nominees will stand for election and will serve if elected as a director.
At
this annual meeting, the persons listed below have been nominated to stand for election to the board as Class III directors for a three-year
term expiring in 2026.
William
P. Foley, II
Douglas
K. Ammerman
Thomas
M. Hagerty
Peter
O. Shea, Jr.
THE
BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THE ELECTION OF EACH OF THE LISTED NOMINEES.
CERTAIN
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
The
executive officers of the Company are set forth in the table below, together with biographical information, except for Mr. Quirk, whose
biographical information is included in this proxy statement under the section titled “Certain Information about our Directors–Information
About the Director Nominees and Continuing Directors.”
Name |
Position |
Age |
Raymond
R. Quirk |
Executive
Vice-Chairman |
76 |
Michael
J. Nolan |
Chief
Executive Officer |
63 |
Anthony
J. Park |
Executive
Vice President and Chief Financial Officer |
56 |
Peter
T. Sadowski |
Executive
Vice President and Chief Legal Officer |
68 |
Michael
L. Gravelle |
Executive
Vice President, General Counsel and Corporate Secretary |
61 |
|
Fidelity
National Financial, Inc. |
30 |
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Michael
J. Nolan. Mr. Nolan has served as
Chief Executive Officer of the Company since February 2022 and previously served as President of the Company since January 2016. Mr. Nolan
has also served on the board of directors of F&G since August 2020. He served as the Co-Chief Operating Officer from September 2015
until January 2016. Additionally, he has served as President of Eastern Operations for Fidelity National Title Group since January 2013
and Executive Vice President and Division Manager since May 2010. Previously, Mr. Nolan served in various executive and management positions,
including Division Manager and Regional Manager from the time he joined FNF in 1983, with responsibilities for managing direct and agency
operations for the Midwest and East Coast, as well as the Company’s operations in Canada, Fidelity’s 1031 exchange company,
Fidelity’s relocation business, LoanCare and ServiceLink.
Anthony
J. Park. Mr. Park has served as Executive
Vice President and Chief Financial Officer of FNF since October 2005. Prior to being appointed CFO of the Company, Mr. Park served as
Controller and Assistant Controller of FNF from 1991 to 2000 and served as the Chief Accounting Officer of FNF from 2000 to 2005.
Peter
T. Sadowski. Mr. Sadowski has served
as Executive Vice President and Chief Legal Officer of FNF since 2008. Prior to that, Mr. Sadowski served as Executive Vice President
and General Counsel of FNF since 1999. Mr. Sadowski has also served as Executive Vice President and Chief Legal Officer of Cannae since
April 2017. Mr. Sadowski is a Trustee of the Folded Flag Foundation and the Vegas Golden Knights Foundation and the Vegas Silver Knights
Foundation.
Michael
L. Gravelle. Mr. Gravelle has served
as the Executive Vice President, General Counsel and Corporate Secretary of FNF since January 2010. He has served as Corporate Secretary
since April 2008. Mr. Gravelle joined FNF in 2003, serving as Senior Vice President. Mr. Gravelle joined a subsidiary of FNF in 1993.
Mr. Gravelle has also served as Executive Vice President and General Counsel of Black Knight, Inc. and its predecessors since January
2014, where he also served as Corporate Secretary from January 2014 until May 2018. Mr. Gravelle has also served as Executive Vice President,
General Counsel and Corporate Secretary of Cannae since April 2017. Mr. Gravelle previously served as General Counsel and Corporate Secretary
of AUS and ASZ from January 2021 through December 2022, of FTAC II from July 2020 through March 2021 and of FTAC from March 2020 to July
2021.
COMPENSATION
DISCUSSION AND ANALYSIS
The
following discussion and analysis of compensation programs should be read with the compensation tables and related disclosures that follow.
This discussion contains forward-looking statements that are based on our current plans and expectations regarding future compensation
programs. Compensation programs that we adopt in the future may differ materially from the programs summarized in this discussion. The
following discussion may also contain statements regarding corporate performance targets and goals. These targets and goals are disclosed
in the limited context of our compensation programs and should not be understood to be statements of management’s expectations or
estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.
31 |
Fidelity
National Financial, Inc. |
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In
this compensation discussion and analysis, we provide an overview of our approach to compensating our named executive officers in 2022,
including the objectives of our compensation programs and the principles upon which our compensation programs and decisions are based.
Our named executive officers, and their titles, in 2022 were:
|
• |
Michael
J. Nolan, Chief Executive Officer* |
|
• |
Raymond
R. Quirk, Executive Vice-Chairman of our Board* |
|
• |
Anthony
J. Park, Executive Vice President and Chief Financial Officer |
|
• |
Peter
T. Sadowski, Executive Vice President and Chief Legal Officer |
|
• |
Michael
L. Gravelle, Executive Vice President, General Counsel and Corporate Secretary |
|
• |
Roger
S. Jewkes, Executive Vice President** |
|
* |
On
February 1, 2022, Mr. Quirk transitioned from Chief Executive Officer to Executive Vice-Chairman of our Board, and Mr. Nolan became our
Chief Executive Officer. |
|
** |
On
July 1, 2022, Mr. Jewkes transitioned from Executive Vice President and Chief Operating Officer to a role of a non-Section 16 Executive
Vice President. |
EXECUTIVE
SUMMARY
FINANCIAL
HIGHLIGHTS
FNF
has a long history of delivering consistent, industry-leading results, driven by a steadfast focus on our customers and shareholders,
a culture of employee excellence, and an ability to deliver outstanding performance even in a challenging market environment. FNF generated
$12.5 billion of total revenue (excluding $947 million of noncash, valuation losses on investment securities) and $1.2 billion of net
earnings from continuing operations in 2022. Our strong performance is a testament to our experienced leadership team, strong balance
sheet, and diversified business model.
Our
Title business delivered $9.5 billion of total revenue (excluding $386 million of noncash, valuation losses on investment securities)
in 2022, which will be remembered as one of the more volatile years our industry has experienced. Our management team has a proven track
record of operating through varying economic cycles and moved swiftly to adjust our cost structure in 2022 to counteract the dramatic
rise in mortgage rates that suppressed residential and commercial title order volumes. Despite the significant disruption that occurred
in the market, our leadership team’s experience and efforts allowed us to realize an industry best 16.7% adjusted pre-tax title
margin, our third best since 2003.
Our
F&G Segment achieved record gross sales of $11.3 billion, an increase of 18% as compared to 2021, and finished 2022 with nearly $44
billion in assets under management. F&G’s asset growth has been well ahead of our goal, as outlined at the time we acquired
F&G in 2020, of doubling assets under management to $50 billion over five years. F&G’s financial performance positioned
the business for a return to the public markets through its successful listing on the New York Stock Exchange on December 1, 2022 as a
result of the F&G Distribution.
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As
reflected in the following charts, over the past five years, we have delivered consistently strong consolidated revenue and earnings.
We also remain focused on deploying capital to best maximize shareholder value through investments in our business and returning capital
to our shareholders. During the five-year period from January 1, 2018 through December 31, 2022, we returned approximately $2.0 billion
to our shareholders in the form of cash dividends and approximately $1.4 billion through share repurchases.
|
Year
ended December 31, 2022 |
2018 |
2019 |
2020 |
2021 |
2022 |
Total
Revenue Excluding Valuation Gains/Losses (in millions) |
$7,689
|
$8,141
|
$10,210
|
$15,896
|
$12,503
|
Net
Earnings from Continuing Operations (in millions) |
$635
|
$1,076
|
$1,477
|
$2,434
|
$1,152
|
Adjusted
Title Revenue (in millions) |
$7,285 |
$7,933 |
$9,231 |
$11,890 |
$9,549 |
Adjusted
Pre-Tax Margin |
14.8% |
16.3% |
19.6% |
21.7% |
16.7% |
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PAY
FOR PERFORMANCE
Our
compensation committee takes great care to develop and refine an executive compensation program that recognizes our stewardship responsibility
to shareholders while our talent supports a culture of growth, innovation, and performance.
The
primary goal of our executive compensation programs in 2022 was to drive continued growth and successful execution of our strategic business
objectives. We believe our programs achieve this goal by:
|
• |
Tying
material portions of our named executive officers’ compensation to the performance of our core title operations; |
|
• |
Structuring our
performance-based programs to focus our named executive officers on attaining pre-established, objectively determinable key performance
goals that are aligned with and support our key strategic business objectives, which, in turn, are aimed at growing long-term value for
our shareholders; |
|
• |
Recognizing
our executives’ leadership abilities, scope of responsibilities, experience, effectiveness, and individual performance achievements;
and |
|
• |
Attracting,
motivating, and retaining a highly qualified and effective management team that can deliver superior performance and build shareholder
value over the long-term. |
As
in past years, there was a direct correlation between our named executive officers’ pay and our performance in 2022. Here are a
few highlights:
|
• |
We exceeded both
our adjusted title revenue and adjusted pre-tax title margin targets as set by our compensation committee under our annual incentive plan.
Consistent with this strong performance, our named executive officers earned an annual incentive payout equal to 155% of their respective
target annual incentive opportunities. See the “FNF Annual Incentive Performance Measures and Results” section below. |
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• |
We exceeded the
quarterly adjusted pre-tax title margin goals set by our compensation committee as performance criteria for our 2022 restricted stock
awards. As a result, we expect these awards to fully vest, subject to each executive’s continued employment with us to satisfy the
time-based vesting requirements for those awards. |
We
continued to use adjusted pre-tax title margin as the primary performance objective for our 2022 cash-based annual incentive plan, with
75% of the award tied to this objective and the remaining 25% tied to achievement of adjusted title revenue. We also continued to use
adjusted pre-tax title margin as the performance-based vesting condition in our 2022 long-term performance-based restricted stock awards.
Our compensation committee considered whether this measure should be used in both the annual incentive plan and our long-term incentive
awards. In recognition of the fact that it is one of the most important measures to our investors of the financial performance of our
business, the committee determined it should be used in both programs. The committee determined it should be used in our cash-based annual
incentive plan because it is a leading measure of operating performance and efficiency, has a strong correlation to our annual strategic
plan and is directly affected by the actions of our executives in both strong and weak real estate markets. The committee determined it
should be used in our long-term performance-based restricted stock awards because it reflects our ability to convert revenue into operating
profits for shareholders and measures our progress toward achieving our long-term strategy, and therefore can have a significant impact
on our long-term stock price and investor expectations.
Note
that the financial measures used as performance targets for our named executive officers described in this discussion are non-GAAP measures
and differ from the comparable GAAP measures reported in our financial statements. The measures are adjusted to exclude the impact of
certain non-recurring and other items. We explain how we calculate these measures in the “Analysis of Compensation Components”
section below.
SHAREHOLDER
VOTE ON 2021 EXECUTIVE COMPENSATION
At
our 2022 annual meeting of shareholders, we held a non-binding advisory vote, also called a "say on pay" vote, on the compensation of
our named executive officers in 2021 as disclosed in the 2022 proxy statement. Approximately 96% of the votes cast were voted in favor
of our “say-on-pay” proposal. The compensation committee considered these results when evaluating our executive compensation
programs and determined to keep the current executive compensation platform in place without any changes.
SHAREHOLDER
OUTREACH IN 2022
Our
compensation committee is committed to listening and responding to the views of our shareholders in creating and tailoring our executive
compensation programs. Following the 2022 annual meeting of shareholders and the 2021 “say on pay” shareholder vote, our Chief
Executive Officer and Chief Financial Officer met with our investors in break-out sessions at investor conferences, as well as in independent
one-on-one investor meetings, to discuss our business and stock price performance, and to discuss and receive feedback on our compensation
programs. In this regard, we met with investors at seven investor conferences and numerous one-on-one meetings. The investors with whom
we met in 2022 represented approximately 64% of our top 20 active shareholders, who collectively owned more than 27% of our shares as
of December 31, 2022. Generally, our shareholders did not express any concerns about FNF’s executive compensation plans and practices
in 2022.
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GOVERNANCE
AND COMPENSATION BEST PRACTICES
We
periodically review our compensation programs and make adjustments that are believed to be in the best interests of our company and our
shareholders. As part of this process, we review compensation trends and consider current best practices, and make changes in our compensation
programs when we deem it appropriate, all with the goal of continually improving our approach to executive compensation.
Some
of the best practices adopted by our compensation committee or full board of directors include the following:
Things
We Do |
✓ |
Deliver
total compensation predominantly through variable pay |
✓ |
Maintain
robust stock ownership requirements |
✓ |
Maintain
a clawback policy for incentive-based compensation |
✓ |
High
ratio of performance-based compensation to total compensation, and a low ratio for fixed benefits/perquisites (non-performance-based) |
✓ |
Undertake
an annual review of compensation risk |
✓ |
Limit
perquisites |
✓ |
Have
performance-based vesting provision in restricted stock grants to our officers, including our named executive officers |
✓ |
Require
that any dividends or dividend equivalents on restricted stock and other awards are subject to the same underlying vesting requirements
applicable to the awards – that is, no payment of dividends or dividend equivalents are made unless and until the award vests |
✓ |
Have
transparent executive compensation disclosures in our annual proxy statements |
✓ |
Use
a thorough methodology for comparing our executive compensation to market practices |
✓ |
Have
a policy that annual grants of restricted stock will utilize a vesting schedule of not less than three years |
✓ |
Retain
an independent compensation consultant that reports solely to our compensation committee, and that does not provide our compensation committee
services other than executive compensation consulting |
✓ |
Cap
payouts on incentive awards |
✓ |
Use
non-discretionary, pre-established, objectively determinable performance goals for our incentive awards |
Things
We Don’t Do |
X |
Provide
tax gross-ups or reimbursement of taxes |
X |
Have
liberal change in control definitions |
X |
Include
modified single trigger severance provisions – which provide severance upon a voluntary termination of employment following a change
in control – in our executive employment agreements |
X |
Allow
hedging and pledging transactions involving our securities without board approval |
X |
Have
multi-year guarantees for salary increases, non-performance-based bonuses or guaranteed equity compensation in our executive employment
agreements |
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National Financial, Inc. |
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COMPONENTS
OF TOTAL COMPENSATION AND PAY MIX
We
compensate our executive officers primarily through a mix of base salary, annual cash incentives and long-term equity-based incentives.
We also provide our executive officers with the same retirement and employee benefit plans that are offered to our other employees, as
well as limited other benefits, although these items are not significant components of our compensation programs. The following table
provides information regarding the elements of compensation provided to our named executive officers in 2022:
Category
of Compensation |
Type
of Compensation |
Purpose
of the Compensation |
Fixed
Cash Compensation |
Salary |
Salary
provides a level of assured, regularly paid, cash compensation that is competitive and helps attract and retain key employees. |
Short-term
Performance-based Cash Incentives |
Annual
Cash Incentive Tied to Financial Metrics |
Performance-based
cash incentives under our annual incentive plan are designed to motivate our employees to work towards achieving our key annual adjusted
title revenue and adjusted pre-tax title margin goals. |
Long-term
Equity Incentives |
Performance-based
Restricted Stock Tied to Financial Metrics |
Performance-based
restricted stock helps to tie our named executive officers’ long-term financial interests to our adjusted pre-tax title margin and
to the long-term financial interests of our shareholders, as well as to retain key executives through a three-year vesting period and
maintain a market competitive position for total compensation. |
Benefits
& Other |
ESPP,
401(k) Plan, health insurance and other benefits |
Our
named executive officers’ benefits generally mirror our company-wide employee benefit programs. For security safety reasons and
to make travel more efficient and productive for our named executive officers, they are eligible to travel on our corporate aircraft. |
ALLOCATION
OF TOTAL COMPENSATION FOR 2022
The
following chart and table show the average allocation of 2022 Total Compensation reported in the Summary Compensation Table among the
components of our compensation programs:
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2022
COMPENSATION MIX
|
Salary |
Annual
Cash Incentives |
Performance-
based Restricted Stock |
Benefits
and Other |
Total
Compensation |
Performance-
based Compensation |
Michael
J. Nolan |
11.6% |
27.9% |
57.1% |
3.4% |
100% |
85.0% |
Raymond
R. Quirk |
9.9% |
22.3% |
61.6% |
6.2% |
100% |
83.9% |
Anthony
J. Park |
18.2% |
30.0% |
45.1% |
6.7% |
100% |
75.1% |
Peter
T. Sadowski |
18.5% |
30.5% |
44.8% |
6.2% |
100% |
75.3% |
Michael
L. Gravelle |
14.9% |
24.6% |
52.8% |
7.7% |
100% |
77.4% |
Roger
S. Jewkes |
33.3% |
48.4% |
0.0% |
18.3% |
100% |
48.4%
|
As
illustrated above, more than 75% of each named executive officer’s total compensation (other than Mr. Jewkes who transitioned from
being an executive officer in July 2022) is based on performance-based cash and equity incentives that are tied to our financial performance
and stock price.
Our
compensation committee believes this emphasis on performance-based incentive compensation is an effective way to use compensation to help
us achieve our business objectives while directly aligning our executive officers’ interests with the interests of our shareholders.
ANALYSIS
OF COMPENSATION COMPONENTS
BASE
SALARY
Our
compensation committee typically reviews salary levels annually as part of our performance review process, as well as in the event of
promotions or other changes in our named executive officers’ positions or responsibilities. When establishing base salary levels,
our compensation committee considers the peer compensation data provided by its external independent compensation consultants, as well
as a number of qualitative factors, including each named executive officer’s experience, knowledge, skills, level of responsibility
and performance. The compensation committee reviews these factors each year and, rather than providing a merit increase to executives
each year, increases our executives’ base salaries only in years when the committee determines that such an increase is warranted.
In
connection with our CEO transition on February 1, 2022, based on Messrs. Nolan’s and Quirk’s new duties and roles, our compensation
committee increased Mr. Nolan’s base salary by $150,000 and reduced Mr. Quirk’s base salary by $250,000. In addition, in recognition
of their strong individual performance and the Company’s performance and review of market compensation, our compensation committee
approved $50,000 increases to Messrs. Park’s and Sadowski’ base salaries, effective February 1, 2022. On December 1, 2022,
the compensation committee increased Mr. Gravelle’s base salary by $145,000 in recognition of his strong individual performance,
the Company’s performance and a review of market compensation. On July 1, 2022, Mr. Jewkes’s base salary was reduced from
$750,000 to $300,000 in connection with his transition from Executive Vice President and Chief Operating Officer to a non-Section 16 role
of Executive Vice President.
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ANNUAL
PERFORMANCE-BASED CASH INCENTIVES
We
award annual cash incentives based upon the achievement of pre-defined business and financial objectives relating to our title operations,
which are specified in the first quarter of the year. Annual incentives play an important role in our approach to total compensation,
as they motivate participants to achieve key fiscal year objectives by conditioning the payment of incentives on the achievement of defined,
objectively determinable financial performance goals.
In
April 2022, our compensation committee approved our fiscal year business performance objectives and a target incentive opportunity for
each participant, as well as the potential incentive opportunity range for maximum and threshold performance. No annual incentive payments
are payable to a named executive officer if the pre-established, threshold performance levels are not met, and payments are capped at
a maximum performance payout level. The financial performance results are derived from our annual financial statements (as reported in
our Annual Report on Form 10-K filed with the SEC), which are subject to an audit by our independent registered public accounting firm,
Ernst & Young LLP. However, as discussed below, the financial measures used as performance targets for our annual cash incentives
for our named executive officers differ from the comparable GAAP measures reported in our financial statements. Below, we explain how
we calculate the performance measures of our annual cash incentives.
The
target opportunities of our annual cash incentives are expressed as a percentage of the individual’s base salary. In 2022, in connection
with our CEO transition, based on Messrs. Nolan’s and Quirk’s new duties and roles, our compensation committee approved an
increase of Mr. Nolan’s target annual cash incentive opportunity from 130% to 150% of his base salary and a decrease of Mr. Quirk’s
target annual cash incentive opportunity from 175% to 150% of his base salary.
The
amount of the annual cash incentives actually paid depends on the level of achievement of the pre-established goals as follows:
|
• |
If threshold
level of performance is not achieved, no incentive will be paid. |
|
• |
If threshold
level of performance is achieved, the incentive payout will equal 50% of a named executive officer’s target incentive opportunity. |
|
• |
If target level
of performance is achieved, the incentive payout will equal 100% of a named executive officer’s target incentive opportunity. |
|
• |
If maximum level
of performance is achieved, the incentive payout will equal 200% of a named executive officer’s target incentive opportunity. |
|
• |
If performance
falls between two levels, the incentive payout will be interpolated. |
An
important tenet of our pay-for-performance philosophy is to utilize our compensation programs to motivate our executives to achieve performance
levels that reach beyond what is expected of us as a company. The performance targets for our incentive plans are approved by our compensation
committee and are based on discussions between management and our compensation committee. Target performance levels are intended to be
difficult to achieve, but not unrealistic. Maximum performance levels are established to limit short-term incentive awards so as to avoid
excessive compensation while encouraging executives to reach for performance beyond the target levels.
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When
setting the performance targets for our 2022 annual cash incentives, our compensation committee considered the following factors, which
are discussed in more detail below:
|
• |
Our 2022 business plan, including
our underlying assumptions relating to 2022 refinance volumes and residential purchase market projections following consideration of forecasts
of the Mortgage Bankers Association (MBA) and Fannie Mae, projections for the national commercial market based upon forecasts by the Urban
Land Institute, the interest rate environment, housing affordability, and recent and expected industry and company trends; |
|
• |
2022 performance
targets as compared to 2021 performance results; |
|
• |
Alignment of
the 2022 performance targets with the investment community’s published projections for us and our publicly-traded title company
competitors; and |
|
• |
The effect that
achieving the performance targets would have on our growth and margins. |
FNF
Annual Incentive Performance Measures and Results. The
performance goals for our 2022 annual cash incentives were based on adjusted revenue and adjusted pre-tax profit margin, which we refer
to as “adjusted pre-tax title margin,” in each case relating to our title segment. We believe these two performance measures
are among the most important measures to our investors of the financial performance of our business. Title revenue is a leading measure
of growth, market share, customer satisfaction and product strength. Pre-tax margin relating to our title segment is a leading measure
of operating performance and efficiency. Both measures are used by investors and analysts and can have a significant impact on long-term
stock price and the investing community’s expectations. Additionally, when combined with the strong focus on long-term shareholder
return created by our equity-based incentives and our named executive officers’ significant stock ownership, these two measures
analyzed on an annual basis provide a degree of checks and balances, requiring our named executive officers to consider both short-term
and long-term performance of our businesses and investments. Adjusted title revenue and adjusted pre-tax title margin correspond to our
shareholders’ expectations, the performance of our stock price, our annual budget, our long-term financial plan, and our board of
directors’ expectations. Further, both are measures that executives can directly affect.
In
the following table, we explain how we calculate the performance measures and why we use them.
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National Financial, Inc. |
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Performance
Measure |
How
Calculated1 |
Reason
for Use |
Adjusted
Title Revenue |
Adjusted
title revenue is based on GAAP revenue from our title segment as reported in our annual financial statements, excluding recognized gains
and losses. |
Adjusted
title revenue is an important measure of our growth, our ability to satisfy and retain our clients, gain new clients and the effectiveness
of our services and solutions. Adjusted title revenue is widely followed by investors. |
Adjusted
Pre-Tax Title Margin |
Adjusted
pre-tax title margin is determined by dividing the earnings before income taxes and non-controlling interests from our title segment,
excluding recognized gains and losses, purchase accounting amortization and other unusual items, by total revenues of the title segment
excluding recognized gains and losses. |
Adjusted
pre-tax title margin it is a financial measure that is significantly influenced by the performance of our executives, promotes a focus
on operational efficiency and cost management, aligns the executives’ short-term incentive opportunity with one of our key corporate
growth objectives and is commonly used within the title industry. We believe maintaining strong margins is particularly important in a
declining market. The exclusion of income taxes, non-controlling interests, recognized gains and losses, and purchase price amortization
from the calculation of adjusted pre-tax title margin results in a measure that better reflects our continuing operations, which is directly
influenced by the performance of our executives rather than ancillary market and economic factors. |
|
1. |
The adjustments to title revenue and
pre-tax title margin are intended to produce a performance measure that reflects the financial performance of our continuing operations,
which is directly influenced by the performance of our executives, and to exclude the impact of external market and economic factors.
|
The
title insurance business is directly impacted by management’s effectiveness in executing on our business strategy, and macro-economic
factors such as mortgage interest rates, credit availability, job markets, economic growth, and changing demographics. Changes to mortgage
interest rates, in particular, can have a significant impact on our title revenues and title margin.
Our
annual incentive plan targets correlate with our annual strategic financial plans, which are developed in the first quarter based on our
forecasted mortgage originations for the year and the relative mix of purchase versus refinance originations. In setting the threshold,
target and maximum goals relating to the performance measures under our annual incentive plan, our compensation committee considered management’s
expectations for 2022, which were based on a combination of forecasts provided by the MBA and the Urban Land Institute, anticipated changes
in interest rates, as well as recent and expected industry and company trends. When we set our 2022 performance targets in April 2022,
our assumptions included a decline in residential purchase volumes of 19% with an expectation of continued home price appreciation, a
decline in refinance volumes of 63%, a 120 basis point increase in the 30-year fixed mortgage interest rate, and a 25% decrease in the
national commercial market. Our assumptions also included rising home prices making housing less affordable and other recent and expected
industry and company trends. We prepare a base plan as well as upside and downside scenarios, which, taken together, form the strategic
financial plan and the basis of the performance measure targets. To establish
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threshold
and maximum goals, percentage adjustments were applied to the target goals. In light of the expected trends in refinance, residential
purchase and national commercial markets described above coupled with an anticipated rising interest rate environment, our compensation
committee determined to set our 2022 adjusted pre-tax title margin performance target at 15.5%, and our 2022 title revenue target at $9.0
billion. In setting the 2022 performance targets, the compensation committee considered the targets relative to the Company’s performance
in 2021, but determined to set the targets lower than the 2021 results due to the Company’s extraordinary performance in 2021 and
the expected market factors described above. The committee believed achievement of these targets would reflect strong performance by management
in what was expected to be a challenging market environment.
The
adjusted pre-tax title margin threshold and maximum goals were set at 250 basis points below and 250 basis points above the target, respectively,
and title revenue threshold and maximum goals were set at 7.5% below and 7.5% above the target, respectively. Target performance levels
are intended to be difficult to achieve, but not unrealistic. Maximum performance levels are established to limit short-term incentive
awards so as to avoid excessive compensation while encouraging executives to reach for performance beyond the target levels. All of the
goals are subject to review and approval by our compensation committee.
When
calculating adjusted title revenues and adjusted pre-tax title margin, we adjust for recognized gains and losses, acquisitions, divestitures,
major restructuring charges, non-budgeted discontinued operations and other unusual items. These adjustments encourage our executives
to focus on achieving strong financial performance and efficient operation of our continuing businesses during the year to achieve the
performance measures. The adjustments also ensure that our compensation committee is measuring management’s performance at the end
of the annual performance period consistently with our budget for that period so that the measures serve as barometers of management’s
performance in satisfying and retaining our clients, obtaining new clients, and operating the business efficiently. The adjustments also
encourage our executives to focus on the long-term benefit of acquisitions or divestitures regardless of whether they may have a positive
or negative impact on our adjusted revenue or pre-tax title margin in the current year.
Our
2022 results exceeded expectations due to strong performance in a challenging environment and effective cost management by our executives,
including a 7% increase in direct title insurance premiums relative to expectations which resulted from an increase in closed order volumes
and increased fee per file driven by an increase in purchase activity, partially offset by a continued decrease in refinance activity.
Remittances for agency title insurance premiums were 5% higher than expected reflecting an improving residential purchase environment
in many markets throughout the country and a concerted effort by management to increase remittances with existing agents and to cultivate
new relationships with potential new agents. Our executives’ performance directly impacted our ability to effectively manage our
business in response to each of these factors and deliver strong results for our shareholders.
The
following charts set forth the 2022 threshold, target and maximum performance goals, the relative weighting of the performance measures,
and 2022 performance results under our annual incentive plan. Dollar amounts are in millions.
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Fidelity
National Financial, Inc. |
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Performance
Metric |
Weight |
Threshold |
Target |
Maximum |
Results |
Payout
Factor |
Adjusted
Revenue Title
Segment |
25% |
$8,325 |
$9,000 |
$9,675 |
$9,549 |
181% |
Adjusted
Pre-tax Margin Title
Segment |
75% |
13% |
15.5% |
18% |
16.7% |
147% |
The
table below presents a reconciliation of our GAAP total revenue and pre-tax earnings to our adjusted revenue, adjusted pre-tax earnings
and adjusted pre-tax margin for the title segment of the Company. Dollar amounts are in millions.
Twelve
Months Ended December 31, 2022 |
2018 |
2019 |
2020 |
2021 |
2022 |
Total
revenue |
$7,175 |
$8,259 |
$9,374 |
$11,497 |
$9,106 |
Pre-tax
earnings (loss) |
$876 |
$1,536 |
$1,878 |
$2,136 |
$1,090 |
Non-GAAP
adjustments before taxes |
Recognized
(gains) and losses, net |
110 |
(326) |
(143) |
393 |
443 |
Purchase
price amortization |
87 |
86 |
73 |
57 |
60 |
Other
adjustments |
7 |
1 |
1 |
— |
— |
Total
non-GAAP adjustments before taxes |
204 |
(239) |
(69) |
450 |
503 |
Adjusted
revenue |
$7,285 |
$7,933 |
$9,231 |
$11,890 |
$9,549 |
Adjusted
pre-tax earnings (loss) |
$1,080 |
$1,297 |
$1,809 |
$2,586 |
$1,593 |
Adjusted
pre-tax margin |
14.8% |
16.3% |
19.6% |
21.7% |
16.7% |
The
following table shows each named executive officer’s 2022 base salary, target annual incentive opportunity expressed as a percentage
of base salary, and the 2022 annual incentive earned.
Name |
2022
Base Salary* |
2022
Annual Incentive
Target (%) |
2022
Annual Incentive
Target ($) |
2022
Total Incentive
Earned |
Michael
J. Nolan |
$900,000 |
150% |
$1,350,000 |
$2,103,362 |
Raymond
R. Quirk |
$750,000 |
150% |
$1,125,000 |
$1,752,802 |
Anthony
J. Park |
$615,000 |
105% |
$645,750 |
$1,006,108 |
Peter
T. Sadowski |
$600,000 |
105% |
$630,000 |
$981,569 |
Michael
L. Gravelle |
$415,385 |
105% |
$436,154 |
$674,147 |
Roger
S. Jewkes** |
$750,000 |
130% |
$975,000 |
$759,547 |
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* |
Except for Mr. Jewkes, the amounts
reflects base salary effective at the end of 2022. |
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** |
For Mr. Jewkes,
the amount of base salary represents his base salary before he transitioned to a role of non-Section 16 Executive Vice President and the
amount 2022 incentive target represents the amount approved by our compensation committee. Mr. Jewkes’s annual incentive payout
was prorated to 50% of the annual incentive compensation that he would earn if he remained the Executive Vice President and Chief Operating
Officer. |
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LONG-TERM
EQUITY INCENTIVES
On
November 7, 2022, we granted performance-based restricted stock to each of our named executive officers.
We
do not attempt to time the granting of awards to any internal or external events. Our general practice has been for our compensation committee
to grant equity awards during the fourth quarter of each year following the release of our financial results for the third quarter. We
also may grant awards in connection with significant new hires, promotions or changes in duties.
Our
compensation committee’s determinations are not formulaic; rather, in the context of competitive market compensation data and our
stated pay philosophy, our compensation committee determines the share amounts on a subjective basis in its discretion and award amounts
may differ among individual executive officers in any given year. Following is a brief discussion regarding the awards made in 2022.
Performance-based
Restricted Stock. In 2022, the proportion
of the FNF equity awards consisting of performance-based restricted stock remained at 100%. As in recent years, we did not grant stock
options or awards that vest solely based on continued service to our named executive officers.
The
restricted stock awards vest over three years, provided we achieve adjusted pre-tax margin in our title segment of 7.5% in at least two
of the five quarters beginning October 1, 2022. We considered various alternative measures, but we again selected adjusted pre-tax title
margin, which measures our achievements in operating efficiency, profitability and capital management. The committee determined to use
adjusted pre-tax title margin because it reflects our ability to convert revenue into operating profits for shareholders and measures
our progress toward achieving our long-term strategy, and therefore can have a significant impact on our long-term stock price.
When
we set our adjusted pre-tax title margin performance goal in November 2022, the compensation committee considered the MBA’s forecast
of a 9% decline in residential mortgage originations in 2023 and an increase of 40 basis points in the full year average 30-year fixed
mortgage interest rate, which, in particular, can have a significant impact on our title margins. Mortgage rates are a key determinant
in the level of real estate transaction activity, especially in the residential refinance market, and an increase in mortgage rates in
a short amount of time will likely depress both the refinance and purchase markets considerably. Given the surge in refinance orders during
2021 and early 2022 caused by unprecedentedly low mortgage rates, the compensation committee considered MBA’s forecast that refinance
originations would fall by an additional 24% in 2023 compared with 2022 following the 74% decline in 2022 compared with 2021. With respect
to the residential purchase market, the compensation committee considered rising interest rates, the current limited housing supply, increasing
home prices and tight credit markets. The committee considered Urban Land Institute’s forecast of a decline in the commercial real
estate market in 2023 due to potential headwinds arising from inflation, labor and supply-chain disruption, geopolitics, the transition
of many businesses to a work from home model and the rising interest rate environment. The compensation committee balanced these considerations
against management’s historically strong performance in managing expenses during different real estate cycles and ability to drive
industry leading margins.
Based
on these considerations for the performance period, the compensation committee determined to set the performance goal for our 2022 restricted
stock awards at 7.5%, which is 450 basis points lower than the 2021 performance goal of 12% due to the factors described above, in
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order
to encourage management to continue to drive strong expense management and margins in our title business under expected deteriorating
market conditions. Adjusted pre-tax title margin for purposes of the performance-based restricted stock awards is calculated in the same
manner as it is calculated under our annual incentive plan.
Although
we considered using a longer performance period for these awards, we determined that achievement of the criteria in at least two of the
five quarters beginning October 1, 2022, which is the performance period we have historically used with respect to our performance-based
equity awards, was the appropriate performance period because of the difficulty in predicting future performance of the mortgage market,
particularly for a period of more than one year, because it is largely driven by interest rates, which may be volatile over a longer term,
and other economic forces outside of our control, and because of the seasonality inherent in the title business, with the first quarter
typically much weaker than the remaining quarters due to weather conditions and holidays impacting opened order activity in November and
December resulting in fewer closings in the first quarter.
With
respect to all restricted stock awards, credit is provided for dividends paid on unvested shares, but payment of those dividends is subject
to the same vesting requirements as the underlying shares – in other words, if the underlying shares do not vest, the dividends
are forfeited.
BENEFIT
PLANS
Our
named executive officers generally participate in the same compensation programs as our other executives and employees. All employees
in the United States, including our named executive officers, are eligible to participate in our 401(k) plan and our employee stock
purchase plan, or ESPP. In addition, our named executive officers are eligible to participate in broad-based health and welfare plans.
We do not offer pensions or supplemental executive retirement plans for our named executive officers.
401(k)
Plan. We sponsor a defined contribution
savings plan that is intended to be qualified under Section 401(a) of the Internal Revenue Code. The plan contains a cash or deferred
arrangement under Section 401(k) of the Internal Revenue Code. Participating employees may contribute up to 40% of their eligible
compensation, but not more than statutory limits, which were generally $20,500 in 2022. Vesting in matching contributions, if any, occurs
proportionally each year over an employee’s first three years of continuous employment with us.
Deferred
Compensation Plan. We provide our
named executive officers, as well as other key employees, with the opportunity to defer receipt of their compensation under a nonqualified
deferred compensation plan. A description of the plan and information regarding our named executive officers’ interests under the
plan can be found in the Nonqualified Deferred Compensation table and accompanying narrative.
Employee
Stock Purchase Plan. We maintain our
ESPP through which our executives and employees can purchase shares of our common stock through payroll deductions and through matching
employer contributions. At the end of each calendar quarter, we make a matching contribution to the account of each participant who has
been continuously employed by us or a participating subsidiary for the last four calendar quarters. For employees with more than 10 years
of service and officers, including our named executive officers, matching contributions are equal to 1/2 of the amount contributed during
the quarter that is one-year earlier than the
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quarter
in which the matching contribution was made. The matching contributions, together with the employee deferrals, are used to purchase shares
of our common stock on the open market. For information regarding the matching contributions made to our named executive officers in 2022,
see “– Summary Compensation Table.”
Health
and Welfare Benefits. We sponsor various
broad-based health and welfare benefit plans for our employees, including life insurance, and our executives are eligible to participate
in an executive medical plan. The taxable portion of the premiums on this additional life insurance is reflected in the “Summary
Compensation Table” under the column “All Other Compensation” and related footnote. We also offer a program under which
we reimburse our employees escrow and title fees when they use one of our title companies in connection with the closing of their personal
real estate transactions.
Other
Benefits. We provide a few additional
benefits to our executives. In general, the additional benefits provided are intended to help our named executive officers be more productive
and efficient and to protect us and our executives from certain business risks and potential threats. We also provide certain of our named
executive officers with personal use of the corporate aircraft for security and safety reasons. Our compensation and audit committees
regularly review the additional benefits provided to our executive officers and believe they are minimal. Further detail regarding other
benefits in 2022 can be found in the “Summary Compensation Table” under the column “All Other Compensation” and
related footnote.
EMPLOYMENT
AGREEMENTS AND POST-TERMINATION COMPENSATION AND BENEFITS
We
have entered into employment agreements with each of our named executive officers. These agreements provide us and the executives with
certain rights and obligations during and following a termination of employment, and in some instances, following a change in control.
We
believe these agreements are necessary to protect our legitimate business interests, as well as to protect the executives in the event
of certain termination events. For a discussion of the material terms of the agreements, see the narrative following "– Grants of
Plan-Based Awards" and "– Potential Payments Upon Termination or Change in Control."
ROLE
OF COMPENSATION COMMITTEE, COMPENSATION CONSULTANT AND EXECUTIVE OFFICERS
Our
compensation committee is responsible for reviewing, approving and monitoring all compensation programs for our named executive officers.
Our compensation committee is also responsible for administering our annual incentive plan and our Amended and Restated 2005 Omnibus Incentive
Plan (the omnibus incentive plan). In February 2022, our compensation committee conducted a review of its independent compensation consultant.
After review, Strategic Compensation Group LLC (SCG) was chosen as its independent compensation consultant starting in July 2022.
SCG was chosen based on the skills of their proposed team, executive compensation thought leadership, sound governance practices, industry
knowledge, and history of successful engagement with proxy advisors.
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During
2022, our compensation committee engaged Mercer, which served as our independent compensation consultant until August 2022, and SCG, which
served as our independent compensation consultant beginning in August 2022, to conduct an annual review of our compensation programs for
our named executive officers and other key executives and our board of directors. Mercer’s and SCG’s fees and terms of engagement
were approved by our compensation committee. Mercer and SCG reported directly to the compensation committee and received compensation
only for services related to executive compensation issues.
In
2022, the compensation committee reviewed the independence of Mercer and SCG in accordance with the rules of the New York Stock Exchange
regarding the independence of consultants to the compensation committee and affirmed their independence and that no conflicts of interest
existed.
The
compensation consultant provided our compensation committee with relevant market data on compensation, including annual salary, annual
incentives, long-term incentives, other benefits, total compensation and pay mix, and alternatives to consider when making compensation
decisions. SCG also assisted our compensation committee in its annual review of a compensation risk assessment for 2022.
Our
Chairman, Mr. Foley, participated in the 2022 executive compensation process by making recommendations with respect to the compensation
of our Executive Vice-Chairman. Our Executive Vice-Chairman made recommendations with respect to the compensation of our Chief Executive
Officer. Our Chief Executive Officer made recommendations with respect to the compensation of his direct reports, as discussed further
below. In addition, Michael L. Gravelle, our Executive Vice President, General Counsel and Corporate Secretary, coordinated with our compensation
committee members and Mercer and SCG in preparing the committee’s meeting agendas and, at the direction of the compensation committee,
assisted Mercer and SCG in gathering financial information about FNF and stock ownership information for our executives for inclusion
in the consultant’s reports to our compensation committee. Our executive officers do not make recommendations to our compensation
committee with respect to their own compensation.
While
our compensation committee carefully considers the information provided by, and the recommendations of, the compensation consultants and
the individuals who participate in the compensation process, our compensation committee retains complete discretion to accept, reject
or modify any recommended compensation decisions.
ESTABLISHING
EXECUTIVE COMPENSATION LEVELS
Our
compensation committee considered several important qualitative and quantitative factors when determining the overall compensation of
our named executive officers in 2022, including:
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• |
The executive
officer’s experience, knowledge, skills, level of responsibility and potential to influence our company’s performance; |
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• |
The executive
officer’s prior salary levels, annual incentive awards, annual incentive award targets and long-term equity incentive awards; |
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• |
The business environment and our business
objectives and strategy; |
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• |
Our financial performance in the prior
year; |
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The need to retain
and motivate executives (in the current business cycle, it is critical that we not lose key talent and long-term incentives help to retain
key executives); |
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• |
Corporate governance
and regulatory factors related to executive compensation; and |
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• |
Marketplace compensation levels and
practices. |
In
evaluating the compensation of our named executive officers, our compensation committee considers the recommendations of our Chairman
with respect to our Executive Vice-Chairman. Our compensation committee also considers our Executive Vice-Chairman’s recommendations
with respect to our Chief Executive Officer compensation, and considers our Chief Executive Officer’s recommendations with respect
to the compensation of his direct reports. In making their recommendations, our Chairman, Executive Vice-Chairman and Chief Executive
Officer review the performance of the other named executive officers, job responsibilities, importance to our overall business strategy,
and our compensation philosophy. Neither our Chairman, the Executive Vice-Chairman nor our Chief Executive Officer makes a recommendation
to our compensation committee regarding his own compensation. The compensation decisions are not formulaic, and the members of our compensation
committee did not assign precise weights to the factors listed above. Our compensation committee utilized their individual and collective
business judgment to review, assess, and approve compensation for our named executive officers.
To
assist our compensation committee, in February 2022 and in November 2022, the compensation consultants conducted marketplace reviews of
the compensation we pay to our executive officers. They gathered marketplace compensation data on total compensation, which consists of
annual salary, annual incentives, long-term incentives, executive benefits, executive ownership levels, overhang and dilution from our
omnibus incentive plan, compensation levels as a percent of revenue, pay mix and other key statistics. This data is collected and analyzed
twice during the year, once in the first quarter with respect to base salary and target bonus, and again in the fourth quarter with respect
to total compensation and long-term incentive values. The marketplace compensation data provides a point of reference for our compensation
committee, but our compensation committee ultimately makes subjective compensation decisions based on all the factors described above.
The
compensation consultants used two marketplace data approaches: (1) two general executive compensation surveys with a specific focus on
companies with revenues of between $5 billion and $20 billion, and (2) compensation information for a group of 16 companies, or the FNF
peer group. The compensation consultants recommended, and our compensation committee approved, removing CNO Financial Group, Inc.
(as it falls outside of the target revenue range), and Aon plc (as it was the only insurance brokerage business our prior peer group),
adding Equitable Holdings, Inc., a similarly sized peer with which the Company competes for industry talent, and adding two larger corporations,
Aflac Incorporated and The Hartford Financial Services Group, Inc., to account for FNF’s growth. Our peer group was based on a size
range of approximately 1/2 to 2 times that of FNF’s revenue, and we are positioned near the median for revenue, net income and market
capitalization. When selecting the peer group, we consider a combination of factors including revenues, assets, and market capitalization,
industry focus (generally the insurance industry based on Global Industry Classification Standard (GICS) Code, nature and complexity of
operations, standards used by ISS for identifying peer groups for public companies, and whether the company competes with us for business
and/or executive talent.
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The
2022 peer group consisted of:
Aflac Incorporated |
First American Financial Corporation |
American Financial Group |
Lincoln National Corp. |
Arch Capital Group Ltd. |
Loews Corporation |
Assurant Inc. |
Old Republic International |
Athene Holdings, Inc. |
Principal Financial Group, Inc. |
Cincinnati Financial Corporation |
The Hartford Financial Services Group, Inc. |
CNA Financial Corporation |
Unum Group |
Equitable Holdings, Inc. |
W.R. Berkley Corporation |
Our
named executive officers’ 2022 total direct compensation (consisting of base salaries, annual performance-based cash incentives
and long-term equity incentives) generally fell within a range between the 50th and 75th percentiles of the peer group data, with base
salaries falling slightly below the 50th percentile. This approach aligns with our philosophy of emphasizing variable performance-based
compensation over fixed compensation.
While
the compensation decisions of our compensation committee ultimately were subjective judgments, our compensation committee also considered
the following factors in making compensation decisions for our named executive officers. In determining the total compensation for Mr.
Quirk, our compensation committee considered his more than 35 years of experience with FNF, his new role as Executive Vice-Chairman in
continuing to promote our real estate technology efforts, the expansion of our digital initiatives, and strategic investments in title
insurance and technology related mergers and acquisitions, and his importance to the continued successful operation of FNF. In determining
the total compensation for Mr. Nolan, our compensation committee considered his new role and responsibility as Chief Executive Officer,
his involvement in our investor relations, as well as his more than 35 years of experience with FNF. In determining the total compensation
for Mr. Park, our compensation committee considered his role and responsibility for accounting and financial reporting matters, his involvement
in engaging with our investors, as well as his 30 years of experience with FNF. In determining the total compensation for Mr. Sadowski,
our compensation committee considered his role and responsibility for legal, underwriting and litigation matters, as well as his more
than 30 years of experience with FNF. In determining the total compensation for Mr. Gravelle, our compensation committee considered his
role and responsibility for legal, mergers and acquisitions, and corporate governance matters, as well as his more than 20 years
of experience with FNF and its predecessor companies. In determining the total compensation for Mr. Jewkes, our compensation committee
considered his role and responsibility for oversight of our day-to-day title operations, as well as his more than 35 years of experience
with FNF and its predecessor companies.
The
marketplace compensation information in this discussion is not deemed filed or a part of this compensation discussion and analysis for
certification purposes.
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OUR
NAMED EXECUTIVE OFFICERS HAVE SIGNIFICANT OWNERSHIP STAKES
We
have formal stock ownership guidelines for all corporate officers, including our named executive officers and members of our board of
directors. The guidelines were established to encourage such individuals to hold a multiple of their base salary (or annual retainer)
in our common stock and thereby align a significant portion of their own economic interests with those of our shareholders. Further,
the award agreements for our 2022 restricted stock awards provide that our executives who do not hold shares of our stock with a value
sufficient to satisfy the applicable stock ownership guidelines must retain 50% of the shares acquired as a result of the lapse of
vesting restrictions (excluding shares withheld in satisfaction of tax withholding obligations) until the executive satisfies the applicable
stock ownership guideline. The ownership levels are shown in the “Security Ownership of Management and Directors” table below.
The guidelines call for the executive or director to reach the ownership multiple within four years. Shares of restricted stock count
toward meeting the guidelines. The guidelines, including those applicable to non-employee directors, are as follows:
Position |
Minimum
Aggregated Value |
Chairman
of the Board |
10
x annual cash retainer |
Chief
Executive Officer |
5
x base salary |
Other
Officers |
2
x base salary |
Members
of the Board |
5
x annual cash retainer |
Our
named executive officers and our board of directors maintain significant long-term investments in our company. As of December 31, 2022,
each of our named executive officers’ and non-employee directors’ holdings of our stock exceeded these stock ownership guidelines.
Collectively, as reported in the table “Security Ownership of Management and Directors,” our named executive officers and
directors beneficially own an aggregate of 14.7 million shares of our common stock as of April 21, 2023, which represents approximately
5.4% of our outstanding common stock with a value of approximately $520 million based on the closing price of our common stock on that
date. The fact that our executives and directors hold such a large investment in our shares is part of our culture and our compensation
philosophy. Management’s sizable investment in our shares aligns their economic interests directly with the interests of our shareholders,
and their wealth will rise and fall as our share price rises and falls. This promotes teamwork among our management team and strengthens
the team’s focus on achieving long-term results and increasing shareholder return.
HEDGING
AND PLEDGING POLICY
In
order to more closely align the interests of our directors and executive officers with those of our shareholders and to protect against
inappropriate risk-taking, we maintain a hedging and pledging policy, which prohibits our executive officers and directors from engaging
in hedging or monetization transactions with respect to our securities, engaging in short-term or speculative transactions in our securities
that could create heightened legal risk and/or the appearance of improper or inappropriate conduct or holding FNF securities in margin
accounts or pledging them as collateral for loans without our approval. None of our executives or directors had outstanding hedges of
our securities as of December 31, 2022.
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CLAWBACK
POLICY
We
have a policy to clawback and recover incentive-based compensation paid to our executive officers if we are required to prepare an accounting
restatement due to material noncompliance with financial reporting requirements. Under the policy, in the event of such a restatement
we will clawback any incentive-based compensation paid during the preceding three-year period to the extent it would have been lower had
the compensation been based on the restated financial results. No clawbacks were made in 2022. We intend our policy to comply with the
NYSE listing rules regarding recoupment of incentive compensation when those rules become effective.
TAX
AND ACCOUNTING CONSIDERATIONS
Our
compensation committee considers the impact of tax and accounting treatment when determining executive compensation.
Section
162(m) of the Internal Revenue Code places a limit of $1,000,000 on the amount that can be deducted in any one year for compensation paid
to certain executive officers. The Company’s principal executive officer and principal financial officer serving at any time during
the taxable year, its three other most highly compensated executive officers employed at the end of the taxable year and any employee
who was covered under Section 162(m) for any earlier tax year that began after December 31, 2016 will be covered by Section 162(m). While
our compensation committee considers the deductibility of compensation as one factor in determining executive compensation, the compensation
committee also looks at other factors in making its decisions, as noted above, and retains the flexibility to award compensation that
it determines to be consistent with the goals of our executive compensation program even if the awards are not deductible for tax purposes.
Our
compensation committee also considers the accounting impact when structuring and approving awards. We account for share-based payments
in accordance with ASC Topic 718, which governs the appropriate accounting treatment of share-based payments under generally accepted
accounting principles (GAAP).
COMPENSATION
COMMITTEE REPORT
The
compensation committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with
management, and the compensation committee recommended to the board that the Compensation Discussion and Analysis be included in this
proxy statement.
THE
COMPENSATION COMMITTEE
Heather
H. Murren, Chair
Daniel
D. (Ron) Lane
Cary
H. Thompson
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EXECUTIVE
COMPENSATION
The
following table contains information concerning the cash and non-cash compensation awarded to or earned by our named executive officers
for the years indicated.
SUMMARY
COMPENSATION TABLE
Name
and Principal Position |
Fiscal
Year |
Salary
($)1 |
Bonus
($)2 |
Stock
Awards ($)3 |
Non-Equity
Incentive Plan Compensation ($) 4 |
All
Other Compensation ($)5 |
Total
($) |
Michael
J. Nolan Chief Executive Officer* |
2022 |
871,731 |
— |
4,476,678 |
2,103,362 |
259,070 |
7,710,841 |
2021 |
756,731 |
— |
2,090,000 |
1,950,000 |
238,670 |
5,035,401 |
2020 |
628,215 |
1,768,000 |
1,900,000 |
— |
217,142 |
4,513,357 |
Raymond
R. Quirk Executive Vice-Chairman, Former
Chief
Executive Officer* |
2022 |
778,846 |
— |
5,026,678 |
1,752,802 |
491,825 |
8,050,151 |
2021 |
1,038,462 |
— |
5,390,000 |
3,500,000 |
529,459 |
10,457,921 |
2020 |
888,077 |
3,500,000 |
4,900,000 |
— |
428,791 |
9,716.868 |
Anthony
J. Park Executive Vice President and Chief Financial Officer |
2022 |
610,192 |
— |
1,510,000 |
1,006,108 |
225,478 |
3,351,778 |
2021 |
586,731 |
— |
1,410,860 |
1,186,500 |
213,395 |
3,397,486 |
2020 |
521,973 |
1,186,500 |
1,282,600 |
— |
197,303 |
3,188,376 |
Peter
T. Sadowski Executive Vice President and Chief Legal Officer |
2022 |
595,192 |
— |
1,445,000 |
981,569 |
200,788 |
3,222,549 |
2021 |
571,154 |
— |
1,347,500 |
1,155,000 |
184,417 |
3,258,071 |
2020 |
508,115 |
1,155,000 |
1,225,000 |
— |
171,473 |
3,059,588 |
Michael
L. Gravelle Executive Vice President, General Counsel and Corporate Secretary** |
2022 |
409,481 |
— |
1,445,000 |
674,147 |
210,676 |
2,739,304 |
Roger
S. Jewkes Executive Vice President*** |
2022 |
522,115 |
— |
— |
759,547 |
287,655 |
1,569,317 |
2021 |
709,308 |
— |
1,842,500 |
1,950,000 |
259,860 |
4,761,668 |
2020 |
628,215 |
1,768,000 |
1,675,000 |
— |
241,362 |
4,312,577 |
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* |
Mr.
Quirk transitioned to the role of Executive Vice-Chairman of our board and Mr. Nolan transitioned to the role of Chief Executive Officer
on February 1, 2022. |
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** |
Mr.
Gravelle was not a named executive officer in 2020 or 2021. |
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*** |
Mr.
Jewkes transitioned from Executive Vice President and Chief Operating Officer to a role of a non-Section 16 Executive Vice President on
July 1, 2022. |
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1. |
Amounts
shown are not reduced to reflect the named executive officers’ elections, if any, to defer receipt of salary into our 401(k) plan,
ESPP, or deferred compensation plans. |
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2. |
Represents
discretionary bonuses earned in 2020 under our annual incentive plan by each executive. |
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3. |
Represents the grant
date fair value of the restricted stock awards computed in accordance with ASC Topic 718, excluding forfeiture assumptions. See the Grants
of Plan-Based Awards table for details regarding each award. Assumptions used in the calculation of these amounts are included in Note
U to our audited financial statements for the fiscal year ended December 31, 2022 included in our Annual Report on Form 10-K filed with
the Securities and Exchange Commission on February 27, 2023. The restricted stock awards are performance-based. |
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4. |
Represents performance-based
compensation earned under our annual incentive plan by each executive. For Mr. Jewkes, the amount represents 50% of the performance-based
compensation that Mr. Jewkes would earn if he remained the Executive Vice President and Chief Operating Officer. |
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5. |
Amounts shown include
matching contributions to our ESPP; life insurance premiums paid by us; health insurance fees paid by us under the executive medical plan;
personal use of a company airplane; reimbursement of escrow expenses; automobile allowance; and matching contributions to our 401(k) plan
as reflected in the table below. |
|
Nolan
($) |
Quirk
($) |
Park
($) |
Sadowski
($) |
Gravelle
($) |
Jewkes
($) |
ESPP
Matching Contributions |
18,010 |
50,000 |
42,375 |
41,250 |
30,000 |
54,029 |
Dividends
on Restricted Stock Awards |
146,588 |
378,959 |
97,284 |
94,650 |
94,650 |
129,275 |
Life
Insurance Premiums |
594 |
321 |
387 |
1,143 |
594 |
594 |
Personal
Airplane Use |
8,446 |
— |
— |
8,446 |
— |
— |
Executive
Medical |
76,282 |
53,395 |
76,282 |
53,395 |
76,282 |
70,120 |
Company
Match – 401(k) |
9,150 |
9,150 |
9,150 |
1,904 |
9,150 |
9,150 |
Escrow
Expense Reimbursement |
— |
— |
— |
— |
— |
18,487 |
Automobile
Allowance |
— |
— |
— |
— |
— |
6,000 |
GRANTS
OF PLAN-BASED AWARDS
The
following tables set forth information concerning awards granted to the named executive officers during the fiscal year ended December
31, 2022.
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Estimated
Future Payouts Under Non Equity Incentive Plan Awards(1) |
Estimated
Future Payouts Under
Equity Incentive Plan Awards(2) |
(J)
Grant Date Fair Value of Stock and Option Awards ($)(3) |
(A)
Name |
(B)
Grant Date |
(C)
Award Type |
(D)
Threshold ($) |
(E)
Target ($) |
(F)
Maximum ($) |
(G)
Threshold (#) |
(H)
Target (#) |
(I)
Maximum (#) |
Michael
J. Nolan |
12/1/2022 |
FG
Performance Based Restricted Stock |
— |
— |
— |
— |
9,175 |
— |
176,678 |
11/10/2022 |
Performance
Based Restricted Stock |
— |
— |
— |
— |
105,315 |
— |
4,134,667 |
4/27/2022 |
Annual
Incentive Plan |
675,000 |
1,350,000 |
2,700,000 |
— |
— |
— |
— |
Raymond
R. Quirk |
12/1/2022 |
FG
Performance Based Restricted Stock |
— |
— |
— |
— |
9,175 |
— |
176,678 |
11/10/2022 |
Performance
Based Restricted Stock |
— |
— |
— |
— |
118,786 |
— |
4,663,538 |
4/27/2022 |
Annual
Incentive Plan |
562,500 |
1,125,000 |
2,250,000 |
— |
— |
— |
— |
Anthony
J. Park |
11/10/2022 |
Performance
Based Restricted Stock |
— |
— |
— |
— |
36,983 |
— |
1,451,953 |
4/27/2022 |
Annual
Incentive Plan |
322,875 |
645,750 |
1,291,500 |
— |
— |
— |
— |
Peter
T. Sadowski |
11/10/2022 |
Performance
Based Restricted Stock |
— |
— |
— |
— |
35,391 |
— |
1,389,451 |
4/27/2022 |
Annual
Incentive Plan |
315,000 |
630,000 |
1,260,000 |
— |
— |
— |
— |
Micheal
L. Gravelle |
11/10/2022 |
Performance
Based Restricted Stock |
— |
— |
— |
— |
35,391 |
— |
1,389,451 |
4/27/2022 |
Annual
Incentive Plan |
216,344 |
432,688 |
865,375 |
— |
— |
— |
— |
Roger
S. Jewkes |
4/27/2022 |
Annual
Incentive Plan |
487,500 |
975,000 |
1,950,000 |
— |
— |
— |
— |
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1. |
With respect to
the annual incentive plan, the amount shown in column (D) is 50% of the target amount shown in column (E), and the amount shown in column
(F) is 200% of the target amount shown in column (E). |
|
2. |
The amounts shown
in column (H) reflect the number of shares of performance-based restricted stock granted to each named executive officer under our omnibus
plan. |
|
3. |
The amounts shown
in column (J) represent the grant date fair value of each restricted stock award based upon a $39.26 per share grant date fair value of
FNF common stock and a $19.26 per share grant date fair value of FG common stock. |
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OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
The
following table sets forth certain information with respect to outstanding equity awards held by our named executive officers at December
31, 2022.
|
Stock
Awards1 |
Name |
Grant
Date |
Number
of Shares or Units of Stock That Have Not Vested (#) |
Market
Value of Shares or Units of Stock that Have Not Vested ($) |
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($) |
Michael
J. Nolan |
11/6/2020 |
18,963 |
713,388 |
— |
— |
11/4/2021 |
28,860 |
1,085,713 |
— |
— |
11/10/2022 |
— |
— |
105,315 |
3,961,950 |
12/1/2022 |
— |
— |
9,175 |
183,592 |
Raymond
R. Quirk |
11/6/2020 |
48,903 |
1,839,731 |
— |
— |
11/4/2021 |
74,428 |
2,799,981 |
— |
— |
11/10/2022 |
— |
— |
118,786 |
4,468,729 |
12/1/2022 |
— |
— |
9,175 |
183,592 |
Anthony
J. Park |
11/6/2020 |
12,801 |
481,574 |
— |
— |
11/4/2021 |
19,482 |
732,913 |
— |
— |
11/10/2022 |
— |
— |
36,983 |
1,391,300 |
Peter
T. Sadowski |
11/6/2020 |
12,226 |
459,942 |
— |
— |
11/4/2021 |
18,608 |
700,033 |
— |
— |
11/10/2022 |
— |
— |
35,391 |
1,331,409 |
Michael
L. Gravelle |
11/6/2020 |
12,226 |
459,942 |
— |
— |
11/4/2021 |
18,608 |
700,033 |
— |
— |
11/10/2022 |
— |
— |
35,391 |
1,331,409 |
Roger
S. Jewkes |
11/6/2020 |
16,717 |
628,894 |
— |
— |
11/4/2021 |
25,442 |
957,128 |
— |
— |
|
1. |
We
made the November 2020, November 2021 and November 2022 stock awards under the omnibus incentive plan. The November 2020 grants vest in
equal installments over a period of three years on each anniversary of the grant date provided that we achieve title operating margin
of 9.5% in our title segment in at least two of the five quarters beginning October 1, 2020. The November 2021 grants vest in equal installments
over a period of three years on each anniversary of the grant date provided that we achieve title operating margin of 12% in our title
segment in at least two of the five quarters beginning October 1, 2021. Market |
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values
are based on the December 31, 2021 closing price of $52.18 per share. The November 2022 grants vest in equal installments over a period
of three years on each anniversary of the grant date provided that we achieve title operating margin of 7.5% in our title segment in at
least two of the five quarters beginning October 1, 2022. Market values are based on the December 31, 2022 closing price of $37.62 per
share of FNF common stock and $20.01 per share of FG common stock.
OPTION
EXERCISES AND STOCK VESTED
The
following table sets forth information concerning each exercise of stock options, stock appreciation rights and similar instruments, and
each vesting of stock, including restricted stock, restricted stock units and similar instruments, during the fiscal year ended December
31, 2022 for each of the named executive officers on an aggregated basis:
|
Option
Awards |
Stock
Awards |
|
Number
of Shares Acquired on |
Value
Realized |
Number
of Shares Acquired on |
Value
Realized |
Name |
Exercise
(#) |
on
Exercise ($) |
Vesting
(#) |
on
Vesting ($) |
Michael
J. Nolan |
— |
— |
46,496 |
1,835,020 |
Raymond
R. Quirk |
200,273 |
3,346,562 |
120,111 |
4,740,305 |
Anthony
J. Park |
— |
— |
31,021 |
1,224,312 |
Peter
T. Sadowski |
— |
— |
30,008 |
1,184,299 |
Michael
L. Gravelle |
— |
— |
30,008 |
1,184,299 |
Roger
S. Jewkes |
— |
— |
41,000 |
1,618,113 |
EMPLOYMENT
AGREEMENTS
We
have entered into employment agreements with all of our named executive officers. Additional information regarding post-termination benefits
provided under these employment agreements can be found in the "Potential Payments upon Termination or Change in Control" section.
RAYMOND
R. QUIRK
In
connection with Mr. Quirk’s transition from Chief Executive Officer to Executive Vice-Chairman of our Board, we entered into a three-year
Amended and Restated Employment Agreement with Mr. Quirk effective as of February 1, 2022, with a provision for automatic annual extensions
beginning on the first anniversary of the Effective Date and continuing thereafter unless either party provides timely notice that the
term should not be extended. Pursuant to the terms of Mr. Quirk’s new employment agreement, his minimum annual base salary is $750,000
with an annual cash incentive target of 150% of his annual base salary, with amounts payable depending on performance relative to targeted
results. Mr. Quirk and his eligible dependents were entitled to medical and other insurance coverage we provide to our other top executives
as a group. Mr. Quirk is also eligible to receive equity grants under our equity incentive plans, as determined by our compensation committee.
Mr.
Quirk's employment agreement contains provisions related to the payment of benefits upon certain termination events. The details of these
provisions are set forth in the "Potential Payments upon Termination or Change in Control" section.
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MICHAEL
J. NOLAN
In
connection with Mr. Nolan’s transition from President to Chief Executive Officer, we entered into a three-year Amended and Restated
Employment Agreement effective as of February 1, 2022 with a provision for automatic annual extensions beginning on the first anniversary
of the Effective Date and continuing thereafter unless either party provides timely notice that the term should not be extended. Pursuant
to the terms of Mr. Nolan’s new employment agreement, Mr. Nolan is entitled to an annual base salary of $900,000 and an annual incentive
target of 150% of his annual base salary, with amounts payable depending on performance relative to targeted results. Mr. Nolan and his
eligible dependents are entitled to medical and other insurance coverage we provide to our other top executives as a group. Mr. Nolan
is also eligible to receive equity grants under our equity incentive plans, as determined by our compensation committee.
Mr.
Nolan’s employment agreement contained provisions related to the payment of benefits upon certain termination events. The details
of these provisions are set forth in the "Potential Payments upon Termination or Change in Control" section.
ANTHONY
J. PARK
We
entered into a three-year amended and restated employment agreement with Mr. Park, effective October 10, 2008 with a provision for automatic
annual extensions beginning on the first anniversary of the effective date and continuing thereafter unless either party provides timely
notice that the term should not be extended. Under the terms of the 2008 agreement, Mr. Park’s minimum annual base salary is $375,000,
with an annual cash incentive target equal to at least 100% of his annual base salary, with amounts payable depending on performance relative
to targeted results. Mr. Park is entitled to supplemental disability insurance sufficient to provide at least 2/3 of his pre-disability
base salary, and Mr. Park and his eligible dependents are entitled to medical and other insurance coverage we provide to our other top
executives as a group. Mr. Park is also entitled to, but does not receive, the payment of initiation and membership dues in any social
or recreational clubs that we deem appropriate to maintain our business relationships, and he is eligible to receive equity grants under
our equity incentive plans, as determined by our compensation committee.
Mr.
Park’s employment agreement contains provisions related to the payment of benefits upon certain termination events. The details
of these provisions are set forth in the "Potential Payments upon Termination or Change in Control" section.
PETER
T. SADOWSKI
We
entered into a three-year amended and restated employment agreement with Mr. Sadowski, effective July 23, 2008 with a provision for automatic
annual extensions beginning on the first anniversary of the effective date and continuing thereafter unless either party provides timely
notice that the term should not be extended. Under the terms of the 2008 agreement, Mr. Sadowski’s minimum annual base salary is
$460,000, with an annual cash incentive target of 105% his annual base salary, with amounts payable depending on performance relative
to targeted results. Mr. Sadowski is entitled to supplemental disability insurance sufficient to provide at least 2/3 of his pre-disability
base salary, and Mr. Sadowski and his eligible dependents are entitled to medical and other insurance coverage we provide to our other
top executives as a group. Mr. Sadowski is also entitled to, but does not receive, the payment of initiation and membership dues in any
social or recreational clubs that we deem appropriate to maintain our business relationships, and he is eligible to receive equity grants
under our equity incentive plans, as determined by our compensation committee.
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Mr.
Sadowski’s employment agreement contains provisions related to the payment of benefits upon certain termination events. The details
of these provisions are set forth in the "Potential Payments upon Termination or Change in Control" section.
MICHAEL
L. GRAVELLE
We
entered into a three-year amended and restated employment agreement with Mr. Gravelle, effective January 1, 2010, to serve as our Executive
Vice President, General Counsel and Corporate Secretary, with a provision for automatic annual extensions beginning on the first anniversary
of the effective date and continuing thereafter unless either party provides timely notice that the term should not be extended. Under
the terms of the agreement as amended effective November 1, 2019, Mr. Gravelle’s minimum annual base salary is $326,375 with, an
annual cash incentive target equal to at least 105% of his base salary with a maximum of up to 210% of his target opportunity, with amounts
payable depending on performance relative to targeted results. Mr. Gravelle is entitled to purchase supplemental disability insurance
sufficient to provide at least 60% of his pre-disability base salary, and Mr. Gravelle and his eligible dependents are entitled to medical
and other insurance coverage we provide to our other top executives as a group. Mr. Gravelle is also entitled to, but does not receive,
the payment of initiation and membership dues in any social or recreational clubs that we deem appropriate to maintain our business relationships,
and he is eligible to receive equity grants under our equity incentive plans, as determined by our compensation committee.
Mr.
Gravelle’s employment agreement contains provisions related to the payment of benefits upon certain termination events. The details
of these provisions are set forth in the "Potential Payments upon Termination or Change in Control" section.
ROGER
S. JEWKES
In
connection with Mr. Jewkes’s transition from Executive Vice President, Chief Operating Officer to a role of non-Section 16 Executive
Vice President, we entered into a three-year amended and restated employment agreement with Mr. Jewkes, effective July 1, 2022 with a
provision for annual extensions beginning on the third anniversary of the effective date upon mutual agreement. Under the terms of the
2022 agreement, Mr. Jewkes is entitled to a minimum annual base salary of $300,000. Mr. Jewkes and his eligible dependents are entitled
to medical and other insurance coverage we provide to our other top executives as a group. Mr. Jewkes’ employment agreement contains
provisions related to the payment of benefits upon certain termination events. The details of these provisions are set forth in the "Potential
Payments upon Termination or Change in Control" section.
ANNUAL
INCENTIVE AWARDS
In
April 2022, our compensation committee approved performance-based cash incentive opportunities for our named executive officers. The performance-based
cash incentive opportunities are determined by multiplying base salary by the named executive officer’s applicable percentage approved
by our compensation committee based on the level of performance that we achieved. More information about the annual incentive awards,
including the targets and criteria for determining the amounts payable to our named executive officers, can be found in the “Compensation
Discussion and Analysis” section.
LONG-TERM
EQUITY INCENTIVE AWARDS
In
November 2022, our compensation committee approved grants of performance-based restricted stock to all our named executive officers. The
performance element applicable to the performance-
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based
restricted stock is based upon achievement of adjusted pre-tax title margin of 7.5% in at least two of the five quarters beginning October
1, 2022. The restricted stock also vests proportionately each year over three years based on continued employment with us. More information
about the long-term equity incentive awards can be found in the "Compensation Discussion and Analysis" section.
NONQUALIFIED
DEFERRED COMPENSATION
Under
our nonqualified deferred compensation plan, which was amended and restated effective January 1, 2009, participants, including our named
executive officers, can defer up to 75% of their base salary and 100% of their monthly, quarterly and annual incentives. Deferral elections
are made during specified enrollment periods. Deferrals and related earnings are not subject to vesting conditions.
Participants’
accounts are bookkeeping entries only and participants’ benefits are unsecured. Participants’ accounts are credited or debited
daily based on the performance of hypothetical investments selected by the participant and may be changed on any business day.
Upon
retirement, which generally means separation of employment after attaining age 60, an individual may elect either a lump-sum withdrawal
or installment payments over 5, 10 or 15 years. Similar payment elections are available for pre-retirement survivor benefits. In the event
of a termination prior to retirement, distributions are paid over a 5-year period. Account balances less than the applicable Internal
Revenue Code Section 402(g) limit will be distributed in a lump sum. Participants can elect to receive in-service distributions in a plan
year designated by the participant and these amounts will be paid within two and one-half months from the close of the plan year in which
they were elected to be paid. The participant may also petition us to suspend elected deferrals, and to receive partial or full payout
under the plan, in the event of an unforeseeable financial emergency, provided that the participant does not have other resources to meet
the hardship.
Plan
participation continues until termination of employment. Participants will receive their account balance in a lump-sum distribution if
employment is terminated within two years after a change in control.
In
2004, Section 409A of the Internal Revenue Code was passed. Section 409A changed the tax laws applicable to nonqualified deferred compensation
plans, generally placing more restrictions on the timing of deferrals and distributions. The deferred compensation plan contains amounts
deferred before and after the passage of Section 409A.
For
amounts subject to Section 409A, which in general terms includes amounts deferred after December 31, 2004, a modification to a participant’s
payment elections may be made upon the following events:
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• |
Retirement:
Participants may modify the distribution
schedule for a retirement distribution from a lump-sum to annual installments or vice versa, however, a modification to the form of payment
requires that the payment(s) commence at least five years after the participant’s retirement, and this election must be filed with
the administrator at least 12 months prior to retirement. |
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• |
In-service Distributions:
Participants may modify each in-service
distribution date by extending it by at least five years; however, participants may not accelerate the in-service distribution date and
this election must be filed with the administrator at least 12 months prior to the scheduled in-service distribution date. |
Deferral
amounts that were vested on or before December 31, 2004 are generally not subject to Section 409A and are governed by more liberal distribution
provisions that were in effect prior to the passage of Section 409A. For example, a participant may withdraw these grandfathered amounts
at any time, subject to a withdrawal penalty of ten percent, or may change the payment elections for these grandfathered amounts if notice
is timely provided.
The
table below describes the contributions and distributions made with respect to the named executive officers’ accounts under our
nonqualified deferred compensation plan. Only Mr. Gravelle and Mr. Jewkes deferred 2022 compensation under the plan. Mr. Quirk does not
have a balance in the nonqualified deferred compensation plan.
Name |
Executive
Contributions in Last FY ($) |
Registrant
Contributions in Last FY ($) |
Aggregate
Earnings in Last FY ($) |
Aggregate
Withdrawals/ Distributions ($) |
Aggregate
Balance at Last FYE ($) |
Michael
J. Nolan |
— |
— |
(4,444) |
— |
24,548 |
Anthony
J. Park |
— |
— |
(105,305) |
— |
490,003 |
Peter
T. Sadowski |
— |
— |
(109,330) |
— |
531,874 |
Michael
L. Gravelle |
61,422 |
— |
(214,009) |
— |
983,935 |
Roger
S. Jewkes |
97,500 |
— |
(409,608) |
— |
2,329,945 |
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
In
this section, we discuss the nature and estimated value of payments and benefits we would provide to our named executive officers in the
event of termination of employment or a change in control. The amounts described in this section reflect amounts that would have been
payable under (i) our plans, and (ii) where applicable, their employment agreements if their employment had terminated on December 31,
2022.
The
types of termination situations include a voluntary termination by the executive, with or without good reason, a termination by us either
for cause or not for cause and termination in the event of disability or death. We also describe the estimated payments and benefits that
would be provided upon a change in control without a termination of employment. The actual payments and benefits that would be provided
upon a termination of employment would be based on the named executive officers’ compensation and benefit levels at the time of
the termination of employment and the value of accelerated vesting of share-based awards would be dependent on the value of the underlying
stock.
For
each type of employment termination, the named executive officers would be entitled to benefits that are available generally to our domestic
salaried employees, such as distributions under our 401(k) savings plan, certain disability benefits and accrued vacation. We have not
described or provided an estimate of the value of any payments or benefits under plans or arrangements that do not discriminate in scope,
terms or operation in favor of a named executive officer and that
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are generally
available to all salaried employees. In addition to these generally available plans and arrangements, certain of our named executive officers
would be entitled to benefits under our nonqualified deferred compensation plan, as described above in the "Nonqualified Deferred Compensation"
table and accompanying narrative.
POTENTIAL
PAYMENTS UNDER EMPLOYMENT AGREEMENTS
As discussed
above, we have entered into employment agreements with our named executive officers. The agreements contain provisions for the payment
of severance benefits following certain termination events. Below is a summary of the payments and benefits that the named executive officers
would receive in connection with various employment or service termination scenarios if their terminations had occurred on December 31,
2022 based on their employment agreements in effect at that time. None of our named executive officers would receive payments upon a change
of control without a related termination of employment.
Termination
Payment |
Without
Cause or by the
Executive for Good Reason |
Death
or Disability1 |
For
Cause or Without Good Reason |
Accrued
obligations (earned unpaid base salary, annual bonus payments relating to the prior year, and any unpaid expense reimbursements) |
✓ |
✓ |
✓ |
Prorated
Annual Bonus based on the actual incentive the named executive officer would have earned for the year of termination2 |
✓ |
✓ |
✕ |
Lump-sum
Payment equal to a percentage of the sum of the executive’s (a) annual base salary and (b) the target bonus opportunity in the
year in which the termination of employment occurs3 |
✓ |
✕ |
✕ |
Right
to convert any life insurance provided by us into an individual policy, plus a lump-sum cash payment equal to 36 months
of premiums |
✓ |
✕ |
✕ |
COBRA
coverage (so long as the executive pays the premiums) for a period of three years or, if earlier, until eligible for comparable benefits
from another employer, plus a lump-sum cash payment equal to the sum of monthly COBRA premium payments |
✓ |
✕ |
✕ |
Vesting
of all stock option, restricted stock and other equity-based incentive awards, unless the equity incentive awards are based upon satisfaction
of performance criteria and not based solely on the passage of time, which vest pursuant to the terms of the award |
✓ |
✓ |
✕ |
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1. |
Messrs. Park’s, Sadowski’s and Gravelle’s employment agreements
provide for supplemental disability insurance sufficient to provide at least 2/3 of the executive’s pre-disability base salary (or
in the case of Mr. Gravelle, 60% of his pre-disability base salary). An executive will be deemed to have a “disability” if
he is entitled to receive long-term disability benefits under our long-term disability plan. |
|
2. |
The prorated annual bonus is based on the following: |
|
• |
In the event of a termination without Cause or by the executive
for Good Reason, the actual incentive the named executive officer would have earned for the year of termination and the fraction of the
year the executive was employed by us. |
|
• |
In the event of a termination for death or disability, the
target annual bonus opportunity in the year in which the termination occurs or the prior year if no target annual bonus opportunity has
yet been determined and (b) the fraction of the year the executive was employed. |
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3. |
The percentage for the lump sum payment for each executive is as follows: Mr.
Quirk 200%, Mr. Nolan 200%, Mr. Park 200%, Mr. Sadowski 200%, and Mr. Gravelle 100%. For Messrs. Park, Sadowski and Gravelle, the bonus
used for the lump-sum payment is the higher of (1) the target bonus opportunity for the year of termination or (2) the highest annual
bonus paid to the executive within the preceding three years. |
Definition:
Cause. The following table shows for each of the named executive officers the reasons that the Company may terminate the executive’s
employment for “Cause.”
Definition
of “Cause” includes: |
Quirk |
Park |
Nolan |
Sadowski |
Gravelle |
Jewkes |
Persistent
failure to perform duties consistent with a commercially reasonable standard of care |
✓ |
✓ |
✓ |
✓ |
✓ |
✓ |
Willful
neglect of duties |
✓ |
✓ |
✓ |
✓ |
✓ |
✓ |
Conviction
of, or pleading nolo contendere to, criminal or other illegal activities involving dishonesty |
✓ |
✓ |
✓ |
✓ |
✓ |
✓ |
Material
breach of the employment agreement |
✓ |
✓ |
✓ |
✓ |
✓ |
✓ |
Impeding
or failing to materially cooperate with an investigation authorized by our board of directors |
✓ |
✓ |
✓ |
✓ |
✓ |
✓ |
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Definition:
Good Reason. The table below shows for each of the named executive officers the reasons that each executive may terminate his employment
for "Good Reason."
Definition
of “Good Reason” includes: |
Quirk |
Park |
Nolan |
Sadowski |
Gravelle4 |
Jewkes |
Material
diminution in the executive’s title1 |
✓ |
✓ |
✓ |
✓ |
✓ |
✓ |
Material
diminution of the executive’s base salary or annual bonus opportunity2 |
✓ |
✓ |
✓ |
✓ |
✓ |
✓ |
Material
breach of any of our obligations under the employment agreement |
✓ |
✓ |
✓ |
✓ |
✓ |
✓ |
Within
six months immediately preceding or within two years immediately following a change of control:3
• A
material adverse change in the executive’s status, authority or responsibility;
• A
material adverse change in the position to whom the executive reports or to the executive’s service relationship as a result of
such reporting structure change, or a material diminution in the authority, duties or responsibilities of the position to whom the executive
reports;
• A
material diminution in the budget over which the executive has managing authority; or
• A
material change in the geographic location of the executive’s place of employment. |
✓
|
✓
|
✓
|
✓
|
✕
|
✕
|
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1. |
For purposes of Messrs. Park’s, Sadowski’s and
Gravelle’s employment agreements, this also includes a material diminution in the executive’s position or the assignment of
duties to the executive that are materially inconsistent with the executive’s position or title. |
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2. |
For purposes of Mr. Jewkes’s employment agreements,
this does not include a diminution of the executive’s annual bonus opportunity. |
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3. |
For purposes of our executives’ employment agreements,
a "change of control" includes (1) an acquisition by an individual, entity or group of more than 50% of our voting power; (2) a merger
in which we are not the surviving entity, unless our shareholders immediately prior to the merger hold more than 50% of the combined voting
power of the resulting corporation after the merger; (3) a reverse merger in which we are the surviving entity but in which more than
50% of the combined voting power is transferred to persons different from those holding the securities immediately prior to such merger;
(4) during any period of two consecutive years during the employment term, a change in the majority of our board, unless the changes are
approved by 2/3 of the directors then in office; (5) a sale, transfer or other disposition of our assets that have a total fair market
value equal to or more than 1/3 of the total fair market value of all of our assets immediately before the sale, transfer or disposition,
other than a sale, transfer or disposition to an entity (i) which immediately after the sale, transfer or disposition owns 50% of our
voting stock or (ii) 50% of the voting stock of which is owned by us after the sale, transfer or disposition; or (6) our shareholders
approve a plan or proposal for the liquidation or dissolution of our Company. |
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4. |
For Mr. Gravelle’s employment agreement, "Good Reason"
also includes (1) a material adverse change in the position to whom Mr. Gravelle reports or a material diminution in the authority, duties
or responsibilities of the position to whom Mr. Gravelle reports and (2) a material change in the geographic location of Mr. Gravelle’s
place of employment. |
The agreements
also contain provisions relating to the excess parachute payment excise tax under Sections 280G and 4999 of the Internal Revenue Code.
The agreements provide that if any payments or benefits to be paid to the named executive officer would be subject to the excise tax on
excess parachute payments, then the executive may elect for such payments to be reduced to one dollar less than the amount that would
constitute a “parachute payment” under Section 280G of the Internal Revenue Code. If the executive does not elect to have
such payments so reduced, the
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executive
is responsible for payment of any excise tax resulting from such payments. None of the agreements provide for a gross-up payment for the
excise tax.
POTENTIAL
PAYMENTS UNDER THE OMNIBUS INCENTIVE PLAN
In addition
to the post-termination rights and obligations set forth in the employment agreements of our named executive officers, our omnibus incentive
plan provides for the potential acceleration of vesting and/or payment of equity awards in connection with a change in control. Under
our omnibus incentive plan, except as otherwise provided in a participant’s award agreement, upon the occurrence of a change in
control any and all outstanding options and stock appreciation rights will become immediately exercisable, any restriction imposed on
restricted stock, restricted stock units and other awards will lapse, and any and all performance shares, performance units and other
awards with performance conditions will be deemed earned at the target level, or, if no target level is specified, the maximum level.
For purposes
of our omnibus plan, the term “change in control” means the occurrence of any of the following events:
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• |
An acquisition by an individual, entity or group of 25%
or more of our voting power (except for acquisitions by us or any of our employee benefit plans); |
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• |
During any period of two consecutive years, a change
in the majority of our board, unless the change is approved by 2/3 of the directors then in office; |
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• |
A reorganization, merger, share exchange, consolidation
or sale or other disposition of all or substantially all of our assets; excluding, however, a transaction pursuant to which we retain
specified levels of stock ownership and board seats; or |
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• |
Our shareholders approve a plan or proposal for our liquidation
or dissolution. |
ESTIMATED
CASH PAYMENTS UPON TERMINATION OF EMPLOYMENT
The
table below includes the cash severance amounts that would have been payable to each executive in the event of a termination of employment
by us not for cause or a termination by the executive for good reason. None of our executives would have received a termination payment
if their employment had been terminated on December 31, 2022 for cause or without good reason by the executive, or due to death or disability.
Our estimate of the cash severance amounts that would be provided to each executive assumes that their employment terminated on December
31, 2022. The severance amounts do not include a prorated 2022 annual incentive since the named executive officers would have been paid
based on their service through the end of the year and therefore would have received the annual incentive whether or not the termination
occurred.
Reason
for Termination Payment: |
Quirk |
Park |
Nolan |
Sadowski |
Gravelle |
Jewkes |
Termination
by Company without Cause |
$5,197,745 |
$3,853,824 |
$6,130,255 |
$3,705,657 |
$1,512,502 |
$1,188,239 |
Termination
by Executive for Good Reason |
$5,197,745 |
$3,853,824 |
$6,130,255 |
$3,705,657 |
$1,512,502 |
$1,188,239 |
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ESTIMATED
EQUITY PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE IN CONTROL
The table
below includes the estimated values of the FNF restricted stock awards held by the named executive officers that would vest upon a change
of control, or upon the termination of their employment without cause or by the executive for good reason, in each case assuming such
event occurred on December 31, 2022. None of our executives’ restricted stock awards would have vested in the event of their termination
with cause or by the executive without good reason. The amounts below were determined based upon the number of unvested shares of restricted
stock held by each executive as of December 31, 2022 (as set forth in the Outstanding Equity Awards at Fiscal Year End table above), multiplied
by $37.62 per share, which was the closing price of our common stock on December 31, 2022. None of our named executive officers held any
unvested stock options as of December 31, 2022.
Reason
for Payment: |
Quirk |
Park |
Nolan |
Sadowski |
Gravelle |
Jewkes |
Termination
without Cause or by Executive for Good Reason |
$4,984,650 |
$1,304,777 |
$1,932,855 |
$1,246,213 |
$1,246,213 |
$746,806 |
Death |
$9,506,833 |
$2,712,720 |
$5,942,198 |
$2,593,548 |
$2,593,548 |
$1,703,934 |
Disability |
$9,506,833 |
$2,712,720 |
$5,942,198 |
$2,593,548 |
$2,593,548 |
$1,703,934 |
Change
in Control |
$9,506,833 |
$2,712,720 |
$5,942,198 |
$2,593,548 |
$2,593,548 |
$1,703,934 |
In connection
with certain change in control transactions, our named executive officers may require ServiceLink to purchase their ServiceLink profits
interest awards for an amount equal to the fair market value of the interests.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The compensation
committee is currently composed of Heather H. Murren (Chair), Daniel D. (Ron) Lane and Cary H. Thompson. During 2022, Mr. Lane served
as Chair of the compensation committee and Ms. Murren served as a member. During fiscal year 2022, no member of the compensation committee
was a former or current officer or employee of FNF or any of its subsidiaries. In addition, during fiscal year 2022, none of our executive
officers served (i) as a member of the compensation committee or board of directors of another entity, one of whose executive officers
served on our compensation committee, or (ii) as a member of the compensation committee of another entity, one of whose executive officers
served on our board.
DISCUSSION
OF OUR COMPENSATION POLICIES AND PRACTICES AS THEY RELATE TO RISK MANAGEMENT
We reviewed
our compensation policies and programs for all employees, including our named executive officers, and determined that our compensation
programs are not reasonably likely to have a material adverse effect on our company. In conducting the analysis, we reviewed the structure
of our executive, non-officer and sales commission incentive programs and the internal controls and risk abatement processes that are
in place for each program. We also reviewed data compiled across our direct title operations, agency title operations, ServiceLink, F&G
and corporate operations relative to total revenue, total pre-tax profits, total compensation expenses and incentive program expenses
(including as a percentage of both revenue and total compensation expenses).
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We believe
that several design features of our executive compensation program mitigate risk. We set base salaries at levels that provide our employees
with assured cash compensation that is appropriate to their job duties and level of responsibility and that, when taken together with
incentive awards, motivate them to perform at a high level without encouraging inappropriate risk-taking to achieve a reasonable level
of secure compensation.
With respect
to our executives’ incentive opportunities, we believe that our use of measurable corporate financial performance goals, multiple
performance levels and minimum, target and maximum achievable payouts, together with the compensation committee’s discretion to
reduce awards, serve to mitigate excessive risk-taking. The risk of overstatement of financial figures to which incentives are tied is
mitigated by the compensation committee’s review and approval of the awards and payments under the awards, our ability to recover
any incentive-based compensation pursuant to our clawback policy and the internal and external review of our financials. We also believe
that our use of restricted stock and multi-year vesting schedules in our long-term incentive awards encourages recipients to deliver incremental
value to our shareholders and aligns their interests with our sustainable long-term performance, thereby mitigating risk. In addition,
we have market competitive stock ownership requirements for some executives and we include stock retention requirements in our executives’
restricted stock awards, both of which help to align our executives’ interests with our long-term performance and mitigate risk.
With respect
to our non-officer incentive program, we believe that our use of clearly communicated performance goals and close monitoring by our corporate
accounting group, corporate underwriting group and senior management serve to mitigate excessive risk-taking. Our sales commission incentive
program is based on revenue generation, which is critical to our performance. We have controls in place that mitigate the risk that transactions
might be recommended or executed to earn short-term, commission-based incentive compensation, including operational management oversight
and approval, management reporting, and detailed underwriting guidelines and approval escalation.
CEO PAY
RATIO
As required
by the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing the following information about the relationship of
the annual total compensation of our CEO and the annual total compensation of our employees for 2022, which we refer to as the CEO
pay ratio. Our CEO pay ratio information is a reasonable good faith estimate calculated in a manner consistent with Item 402(u) of
Regulation S-K.
The
ratio of the annual total compensation of our CEO, calculated as described above, to the median of the annual total compensation of all
employees for 2022 was 99 to 1. This ratio was based on the following:
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• |
The annual total compensation of our CEO, determined as
described above, was $7,739,110; and |
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• |
The median of the annual total compensation of all employees
(other than our CEO), determined in accordance with SEC rules, was $78,331. |
Methodology
for Determining Our Median Employee. For purposes of the above CEO pay ratio
disclosure, we are required to identify a median employee based on our worldwide workforce, without regard to their location, compensation
arrangements, or employment status (full-time versus part-time). The median employee is determined by identifying the employee whose compensation
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is
at the median of the compensation of our employee population (other than our CEO). Accordingly, to identify the median of the compensation
of our employee population, the methodology and the material assumptions and estimates that we used were as follows:
Employee
Population. We determined that, as
of November 30, 2020, the date we selected to identify the median employee, our total global employee population consisted of approximately
26,200 individuals working for FNF.
Compensation
Measure Used to Identify the Median Employee. Given
the geographical distribution of our employee population, we use a variety of pay elements to structure the compensation arrangements
of our employees. Consequently, for purposes of measuring the compensation of our employees to identify the median employee, rather than
using annual total compensation, we selected base salary/wages and overtime pay, plus paid incentive bonus through November 30, 2020 as
the compensation measure.
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• |
We annualized
the compensation of employees to cover the full calendar year, and also annualized any new hires in 2020 as if they were hired at the
beginning of the fiscal year, as permitted by SEC rules, in identifying the median employee. |
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• |
We did not make any cost-of-living
adjustments in identifying the median employee. |
Annual
Total Compensation of Median Employee. To
determine the annual total compensation of the median employee, we identified and calculated the elements of that employee’s compensation
for 2022 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation in the amount
of $78,331.
Annual
Total Compensation of Chief Executive Officer. We
are providing the following information about the relationship of the median annual total compensation of our employees and the total
compensation of Mr. Michael Nolan, our Chief Executive Officer as of February 1, 2022, pursuant to the SEC’s pay ratio disclosure
rules set forth in Item 402(u) of Regulation S-K. Because we had two CEOs during 2022, SEC rules allow us the option of calculating the
compensation provided to each CEO during 2022 for the time each served as CEO and combine those amounts, or for the CEO serving in that
position on the date we selected to identify the median employee and annualize that CEO’s compensation. Accordingly, and because
Mr. Nolan is our current CEO, we determined it was appropriate to annualize the compensation Mr. Nolan received during his role as Chief
Executive Officer. The pay ratio is calculated in a manner consistent with the SEC’s pay ratio disclosure rules.
PAY
VERSUS PERFORMANCE
As
required by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation
actually paid and certain financial performance of the Company. For further information concerning the Company’s variable pay-for-performance
philosophy and how the Company aligns executive compensation with the Company’s performance, refer to “Executive Compensation
– Compensation Discussion and Analysis.”
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Year | Summary Compensation Table Total for PEO (Michael J. Nolan) ($)1 | Compensation Actually Paid to PEO (Michael J. Nolan) ($)2 | Summary Compensation Table Total for PEO (Raymond R. Quirk) ($)1 | Compensation Actually Paid to PEO (Raymond R. Quirk) ($)3 | Average Summary Compensation Table Total for Non-PEO NEOs ($)5 | Average Compensation Actually Paid to Non-PEO NEOs ($)6 | Value of Initial Fixed $100 Investment Based On: | Net Income (millions) ($)9 | Adjusted Pre-Tax Title Margin ($)10 |
Total Shareholder Return ($)7 | Peer Group Total Shareholder Return ($)8 |
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | ( j) | (k) |
2022 | 7,710,841 | 6,458,623 | 8,050,151 | 5,028,454 | 2,720,737 | 1,895,590 | (33.04) | (55.30) | 1,136 | 16.7% |
2021 | — | — | 10,457,921 | 13,611,443 | 4,113,156 | 5,087,504 | 42.41 | 61.03 | 2,422 | 21.7% |
2020 | — | — | 9,716,868 | 7,994,932 | 3,768,475 | 3,244,234 | (12.37) | (4.97) | 1,427 | 19.6% |
2019 | — | — | 9,646,148 | 13,264,537 | 4,223,123 | 5,379,749 | 40.55 | 24.71 | 1,062 | 16.3% |
2018 | — | — | 9,078,682 | 6,842,561 | 3,724,760 | 3,257,939 | (17.14) | (15.30) | 628 | 14.8% |
| 1. | The dollar amounts reported in column (b) are the amounts of total compensation reported for Mr. Nolan (our Chief Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation – Summary Compensation Table.” |
| 2. | The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. Nolan, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Nolan during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Nolan’s total compensation for each year to determine the compensation actually paid: |
Year | Reported Summary Compensation Table Total for PEO (Michael J. Nolan) ($) | Reported Value of Equity Awards ($)(a) | Equity Award Adjustments ($)(b) | Compensation Actually Paid to PEO (Michael J. Nolan) ($) |
2022 | 7,710,841 | 4,476,678 | (1,252,219) | 6,458,623 |
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(a) |
The grant date fair value of equity
awards represents the total of the amounts reported in the “Stock Awards” column in the Summary Compensation Table for the
applicable year. We did not award any options to our executives in 2022, 2021 or 2020. |
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(b) |
The equity award adjustments for
each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity
awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the
end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding
and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value
as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of
the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail
to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of
the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year
prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total
compensation for the applicable year. The valuation assumptions used to calculate fair value did not materially differ from those disclosed
at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
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Year | Year End Fair Value of Equity Awards ($) | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | Value of Dividends or Other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | Total ($) |
2022 | 5,944,643 | 3,545,363 | — | (568,228) | — | 247,324 | (1,252,219) |
| 3. | Mr. Quirk ceased to be our Chief Executive Officer and transited to Executive Vice-Chairman of our Board as of February 1, 2022. The dollar amounts reported in column (d) are the amounts of total compensation reported for Mr. Quirk for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation – Summary Compensation Table.” |
| 4. | The dollar amounts reported in column (e) represent the amount of “compensation actually paid” to Mr. Quirk, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Quirk during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Quirk’s total compensation for each year to determine the compensation actually paid: |
Year | Reported Summary Compensation Table Total for PEO (Raymond R. Quirk) ($) | Reported Value of Equity Awards ($)(a) | Equity Award Adjustments ($)(b) | Compensation Actually Paid to PEO (Raymond R. Quirk) ($) |
2022 | 8,050,151 | 5,026,678 | (3,021,697) | 5,028,454 |
2021 | 10,457,921 | 5,390,000 | 3,153,522 | 13,611,443 |
2020 | 9,716,868 | 4,900,000 | (1,721,936) | 7,994,932 |
2019 | 9,646,148 | 4,675,038 | 3,618,389 | 13,264,537 |
2018 | 9,078,682 | 4,674,991 | (2,236,122) | 6,842,561 |
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(a) |
The grant date fair value of equity
awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary
Compensation Table for the applicable year. |
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(b) |
The equity award adjustments for
each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity
awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the
end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding
and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value
as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of
the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail
to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of
the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year
prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total
compensation for the applicable year. The valuation assumptions used to calculate fair value did not materially differ from those disclosed
at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
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Year | Year End Fair Value of Equity Awards ($) | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | Value of Dividends or Other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | Total ($) |
2022 | 9,292,033 | 3,104,517 | — | (1,467,893) | — | 368,357 | (3,021,697) |
2021 | 12,213,485 | 7,259,086 | — | 1,244,730 | — | 39,707 | 3,153,522 |
2020 | 9,882,937 | 4,815,150 | — | (1,645,829) | — | 8,743 | (1,721,936) |
2019 | 10,482,318 | 6,299,120 | — | 1,994,465 | — | (158) | 3,618,389 |
2018 | 8,610,381 | 3,321,314 | — | (964,648) | — | 82,203 | (2,236,122) |
| 5. | The dollar amounts reported in column (f) represent the average of the amounts reported for our named executive officers (NEOs) as a group (excluding for 2022 Mr. Nolan who has served as our Chief Executive Officer since February 1, 2022 and Mr. Quirk who served as our Chief Executive Officer through January 31, 2022, and excluding Mr. Quirk for 2021, 2020, 2019 and 2018) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Messrs. Nolan and/or Quirk, as applicable) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2022, Anthony J. Park, Peter T. Sadowski, Michael L. Gravelle and Roger S. Jewkes; (ii) for 2021 and 2020, Michael J. Nolan, Roger S. Jewkes, Anthony J. Park and Peter T. Sadowski; (iii) for 2019, Michael J. Nolan, Roger S. Jewkes, Anthony J. Park, Peter T. Sadowski and Brent B. Bickett; and (iv) for 2018, Michael J. Nolan, Roger S. Jewkes, Anthony J. Park and Brent B. Bickett. |
| 6. | The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Messrs. Nolan and Quirk for 2022 and excluding Mr. Quirk for 2021, 2020, 2019 and 2018), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Messrs. Nolan and Quirk for 2022 and excluding Mr. Quirk for 2021, 2020, 2019 and 2018) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Messrs. Nolan and Quirk for 2022 and excluding Mr. Quirk for 2021, 2020, 2019 and 2018) for each year to determine the compensation actually paid, using the same methodology described above in Note 2: |
Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs ($) | Average Reported Value of Equity Awards ($) | Average Equity Award Adjustments ($) (a) | Average Reported Change in the Actuarial Present Value of Pension Benefits ($) | Average Pension Benefit Adjustments ($) (b) | Average Compensation Actually Paid to Non-PEO NEOs ($) |
2022 | 2,720,737 | 1,100,000 | (825,147) | — | — | 1,895,590 |
2021 | 4,113,156 | 1,672,715 | 974,347 | — | — | 5,087,504 |
2020 | 3,768,475 | 1,520,650 | (524,240) | — | — | 3,244,234 |
2019 | 4,223,123 | 1,144,817 | 1,156,626 | — | — | 5,379,749 |
2018 | 3,724,760 | 1,541,123 | (466,821) | — | — | 3,257,939 |
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(a) |
The
amounts deducted or added in calculating the total average equity award adjustments are as follows: |
Year | Average Year End Fair Value of Equity Awards ($) | Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards ($) | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | Average Value of Dividends or Other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | Total Average Equity Award Adjustments ($) |
2022 | 2,293,644 | 586,485 | — | (403,400) | — | 91,769 | (825,147) |
2021 | 3,783,119 | 2,250,979 | — | 383,148 | — | 12,935 | 974,347 |
2020 | 3,048,549 | 1,497,298 | — | (503,788) | — | 2,900 | (524,240) |
2019 | 2,981,659 | 1,669,774 | — | 637,098 | — | (5,428) | 1,156,626 |
2018 | 2,859,592 | 1,089,630 | — | (39,155) | — | 23,826 | (466,821) |
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7. |
Cumulative
TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment,
and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s
share price at the beginning of the measurement period. |
| 8. | Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is First American Financial Corporation and Stewart Information Services Corp. |
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9. |
The
dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable
year. |
| 10. | Adjusted Pre-tax Title Margin is calculated by dividing the earnings before income taxes and non-controlling interests from our title segment, excluding recognized gains and losses, purchase accounting amortization and other unusual items, by total revenues of the title segment excluding recognized gains and losses. |
Tabular
List of Financial Performance Measures. As
described in greater detail in “Executive Compensation – Compensation Discussion and Analysis,” the Company’s
executive compensation program reflects a variable pay-for-performance philosophy. The metrics that the Company uses for both our long-term
and short-term incentive awards are selected based on an objective of incentivizing our NEOs to increase the value of our enterprise for
our shareholders. The most important financial performance measures used by the Company to link executive compensation actually paid to
the Company’s NEOs, for the most recently completed fiscal year, to the Company’s performance are as follows:
| • | Adjusted Pre-Tax Title Margin |
Analysis
of the Information Presented in the Pay versus Performance Table. As
described in more detail in the section “Executive Compensation – Compensation Discussion and Analysis,” the Company’s
executive compensation program reflects a variable pay-for-performance philosophy. The Company utilizes two performance measures to align
executive compensation with Company performance, both of which are presented in the Pay versus Performance table. Moreover, the Company
generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures
with compensation that is actually paid (as computed
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in
accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, the Company is
providing the following descriptions of the relationships between information presented in the Pay versus Performance table.
Compensation
Actually Paid and Cumulative TSR. As
demonstrated by the following graph, the amount of compensation actually paid to Mr. Quirk in 2018, 2019, 2020 and 2021, the average compensation
paid to Messrs. Quirk and Nolan for 2022, and the average amount of compensation actually paid to the Company’s NEOs as a group
(excluding Messrs. Nolan and Quirk for 2022 and excluding Mr. Quirk for 2021, 2020, 2019 and 2018) is generally aligned with the Company’s
cumulative TSR over the five years presented in the table. The alignment of compensation actually paid with the Company’s cumulative
TSR over the period presented is because a significant portion of the compensation actually paid to Messrs. Nolan and Quirk and to the
other NEOs is comprised of equity awards.
Compensation
Actually Paid and Net Income. As
demonstrated by the following table, the amount of compensation actually paid to our principal executive officer and the average amount
of compensation actually paid to the Company’s NEOs as a group (excluding Messrs. Nolan and Quirk for 2022 and excluding Mr. Quirk
for 2021, 2020, 2019 and 2018) is generally aligned with the Company’s net income over the five years presented in the table. While
the Company does not use net income as a performance measure in the overall executive compensation program, the measure of net income
is correlated with the measure Adjusted Pre-tax Margin, which the company does use for when setting goals in the Company’s annual
incentive plan and the performance-based restricted stock awards that are granted to the NEOs.
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Compensation
Actually Paid and Adjusted Pre-tax Title Margin. As
demonstrated by the following graph, the amount of compensation actually paid to our principal executive officer and the average amount
of compensation actually paid to the Company’s NEOs as a group (excluding Messrs. Nolan and Quirk for 2022 and excluding Mr. Quirk
for 2021, 2020, 2019 and 2018) is generally aligned with the Adjusted Pre-tax Title Margin of our title segment over the five years presented
in the table. As described above, Adjusted Pre-tax Title Margin is determined by dividing the earnings before income taxes and non-controlling
interests from our title segment, excluding recognized gains and losses, purchase accounting amortization and other unusual items, by
total revenues of the title segment excluding recognized gains and losses. The Company has determined that Adjusted Pre-tax Title Margin
is the financial performance measure that, in the Company’s assessment, represents the most important performance measure (that
is not otherwise required to be disclosed in the table) used by the Company to link compensation actually paid to the company’s
NEOs, for the most recently completed fiscal year, to Company performance. The Company utilizes Adjusted Pre-tax Title Margin when setting
goals in the Company’s annual incentive plan, as well as for setting goals for the performance-based restricted stock awards granted
to the NEOs.
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National Financial, Inc. |
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Cumulative
TSR of the Company and Cumulative TSR of the Peer Group. As
demonstrated by the following graph, the Company’s cumulative TSR over the five-year period presented in the table was 20%, while
the cumulative TSR of the peer group presented for this purpose, First American Financial Corporation and Stewart Information Services
Corp., was 10% over the five years presented in the table. The Company’s cumulative TSR generally outperformed the First American
Financial Corporation and Stewart Information Services Corp. during the five years presented in the table, representing the Company’s
superior financial performance as compared to the companies comprising the First American Financial Corporation and Stewart Information
Services Corp. peer group. For more information regarding the Company’s performance and the companies that the Compensation Committee
considers when determining compensation, refer to “Executive Compensation – Compensation Discussion and Analysis.”
DIRECTOR
COMPENSATION
COMPENSATION
OF OUR NON-EXECUTIVE CHAIRMAN
Our
compensation consultant reviews the compensation paid to our directors, including Mr. Foley, on a regular basis, and then makes recommendations
on any changes to our director compensation practices. Our compensation committee discusses the compensation consultant’s recommendations
and determines whether to make any changes to our director compensation in that year.
With
respect to Mr. Foley’s compensation in 2022, our directors discussed the critical role Mr. Foley plays in the formation and execution
of our long-term strategic vision. Mr. Foley founded FNF in 1984 and transformed it into a leading provider of title insurance, escrow
and other title-related services. Under Mr. Foley’s leadership, FNF, through our title insurance underwriters, issues more title
insurance policies than any other title company in the United States. In addition to the incredible value Mr. Foley has created at FNF,
he led the teams that created additional value for FNF’s shareholders through strategic transactions such as:
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• |
The
spin-off of Fidelity National Information Services, Inc. in 2006, which, under Mr. Foley’s continued leadership from 2006 to 2016,
became a global leader in financial services technology. As of December 31, 2022, FIS had a market capitalization of $40.1 billion. |
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National Financial, Inc. |
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• |
FNF’s
acquisition of Lender Processing Services, Inc. (LPS), where Mr. Foley unlocked the value of technology, data and analytics businesses
by separating the businesses of Black Knight, Inc. (Black Knight) from LPS’ transaction services businesses that are now part of
ServiceLink and led the management team through a process of maximizing operational efficiencies and creating a culture of cross-selling.
At December 31, 2022, Black Knight had a market capitalization of $9.7 billion. |
|
• |
The split-off
of our non-core businesses which formerly comprised our FNF Ventures Group into Cannae Holdings, Inc. (Cannae). At December 31, 2022,
Cannae had a market capitalization of $1.6 billion. |
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• |
Distribution
to our shareholders, on a pro rata basis, of approximately 15% of the common stock of F&G Annuities & Life, Inc., our subsidiary
that holds the F&G businesses. At December 31, 2022, F&G had a market capitalization of $2.5 billion. Since our acquisition of
F&G in June 2020, F&G’s assets under management has increased by 65% to $43.6 billion. |
While
Mr. Foley is no longer an executive or involved in the day-to-day operation of FNF, he continues to be the driving force behind the development
and execution of our strategic direction.
In
light of the high value Mr. Foley brings to our board and our shareholders and his responsibilities as Chairman of our board, the compensation
committee determined that it was important to continue to compensate Mr. Foley at a level that was aligned with the compensation paid
to non-executive board chairs at similarly sized organizations while recognizing the time he spends performing his duties as Chairman
and the significance of his contributions to our continued success. In recognition of Mr. Foley’s superior service, strategic input
and high value to FNF and its stakeholders and FNF’s superior financial performance, Mr. Foley receives an annual cash retainer
of $500,000 and an annual equity award of $500,000.
Under
the terms of Mr. Foley’s director services agreement, if his service is terminated by us for any reason other than for cause, due
to death or disability, by him for good reason or if he is not nominated to run for re-election as Chairman of the board, is nominated,
but does not receive enough votes to be re-elected to the board, or is removed as Chairman of the board for reasons other than cause,
then he is entitled to receive:
|
• |
Any accrued
obligations, and |
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• |
Immediate vesting
and/or payment of all FNF equity awards. |
If
we terminate Mr. Foley’s service for cause or he resigns without good reason our only obligation is the payment of any accrued obligations.
For
purposes of Mr. Foley’s agreement, "cause" includes Mr. Foley’s persistent failure to perform duties consistent with a commercially
reasonable standard of care, willful neglect of duties, conviction of, or pleading nolo contendere to, criminal or other illegal activities
involving dishonesty,
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National Financial, Inc. |
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material
breach of his agreement, or impeding or failing to materially cooperate with an investigation authorized by our board. The term “good
reason” is defined in the agreement to include a material diminution in his position or title or the assignment of duties to him
that are materially inconsistent with his position or title, a material diminution of his annual retainer, within six months immediately
preceding or within two years immediately following a change in control, (1) a material adverse change in this status, authority or responsibility,
(2) a material adverse change in the position to whom he reports or to his service relationship as a result of such reporting structure
change, or a material diminution in the authority, duties or responsibilities of the position to whom he reports, our material breach
of any of our obligations under the agreement, or election of a new director to the board of directors who he did not consent to or vote
for.
COMPENSATION
OF MR. FOLEY AS EXECUTIVE CHAIRMAN OF F&G
In
connection with our spin-off of 15% of F&G, effective as of November 18, 2022, Mr. Foley also serves as Executive Chairman of our
publicly traded subsidiary F&G. Since our acquisition of F&G in June 2020, Mr. Foley has led the development of F&G’s
diversification growth strategy and his continued service and focus on F&G is integral to F&G’s continued execution on that
strategy and its financial performance. As Executive Chairman of F&G, upon the spin-off of F&G Mr. Foley received a performance-based
restricted stock award of 412,845 shares of F&G common stock. Mr. Foley’s F&G restricted stock award vests in three equal
installments on each of the first three anniversaries of the date of grant, subject to F&G’s achievement of certain performance
criteria set in the first quarter of 2023 by F&G’s compensation committee. The compensation paid by F&G to Mr. Foley for
his service as Executive Chairman of F&G is included in these discussions and the tables that follow because FNF owns a majority of
F&G’s outstanding common stock.
As
shown in the table below, which reflects the compensation earned by Mr. Foley as (1) non-executive Chairman of FNF, and (2) as Executive
Chairman of F&G, only approximately 11% of Mr. Foley's compensation disclosed in the discussion above and tables that follow was earned
in his role as non-executive Chairman of FNF with the remaining 89% earned with respect to services provided as Executive Chairman of
F&G. Compensation earned by Mr. Foley as non-executive chairman of FNF represents 12% of the total compensation earned by our Chief
Executive Officer, Mr. Nolan, in 2022 as reported in the Summary Compensation Table. Details relating to the compensation Mr. Foley earned
as Executive Chairman of F&G can be found in F&G’s Annual Report on Form 10-K filed with the Securities and Exchange Commission
on February 27, 2023, as amended on April 27, 2023.
Name |
Fees
Earned or Paid in Cash ($) |
Stock
Awards ($) |
All
Other Compensation ($) |
Total
($) |
Mr.
Foley’s Compensation as Non- Executive Chairman of FNF |
397,500 |
480,778 |
41,100 |
878,278 |
Mr.
Foley’s Compensation as Executive Chairman of F&G |
— |
7,949,950 |
— |
7,949,950 |
Total |
397,500 |
8,430,728 |
41,100 |
8,869,328 |
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Fidelity
National Financial, Inc. |
76 |
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COMPENSATION
OF OUR OTHER DIRECTORS
Mr.
Quirk received no additional compensation for services as a member of our board in 2022. In 2022, all non-employee directors other than
Mr. Foley received an annual retainer of $80,000, payable quarterly. The chairman and each member of the audit committee received an additional
annual fee (payable in quarterly installments) of $100,000 and $35,000, respectively, for their service on the audit committee. The chairman
and each member of the compensation committee received an additional annual fee (payable in quarterly installments) of $25,000 and $15,000,
respectively, for their service on such committee. The chairman and each member of the corporate governance and nominating committee received
an additional annual fee (payable in quarterly installments) of $20,000 and $10,000, respectively, for their service on such committee.
The chairman and each member of the related person transaction committee (formerly the special litigation committee) received an additional
annual fee (payable in quarterly installments) of $25,000 and $15,000, respectively, for their service on the related person transaction
committee. Mr. Ammerman, who serves as our Lead Independent Director, did not receive any additional compensation for that role in 2022.
In November 2022, the compensation committee approved an annual Lead Director fee of $25,000 (payable in quarterly installments).
In
addition, in 2022 each non-employee director other than Mr. Foley received a long-term incentive award of 6,491 shares of restricted stock.
Mr. Foley received a long-term incentive award of 12,246 shares of restricted stock. These restricted stock awards were granted under
our omnibus plan and vest proportionately each year over three years from the date of grant based upon continued service on our board.
In December 2022, in consideration of their service on the board of directors of S&G, Mr. Ammerman and Mr. Rood also received a long-term
incentive award of 9,175 restricted shares of FG common stock. The F&G restricted stock awards vest over a period of three years from
the grant date.
We
also reimburse each non-employee director for all reasonable out-of-pocket expenses incurred in connection with attendance at board and
committee meetings and director education programs. Each non-employee member of our board is eligible to participate in our deferred compensation
plan to the extent he or she elects to defer any board or committee fees. Mr. Ammerman, Ms. Morgan, Mr. Rood and Mr. Shea each deferred
some or all of the fees they earned in 2022 for their service on the board and the committees on which they serve.
The
following table sets forth information concerning the compensation of our non-employee directors for the fiscal year ending December 31,
2022.
Name |
Fees
Earned or Paid in Cash ($)1 |
Stock
Awards ($)2 |
All
Other Compensation ($)3 |
Total
($) |
William
P. Foley, II |
397,500 |
8,430,728 |
41,100 |
8,869,328 |
Douglas
K. Ammerman |
67,500 |
431,515 |
17,448 |
516,463 |
Halim
Dhanidina |
140,326 |
254,837 |
4,785 |
399,948 |
Thomas
M. Hagerty |
80,000 |
254,837 |
17,448 |
352,285 |
Daniel
D. (Ron) Lane |
105,000 |
254,837 |
17,448 |
377,285 |
77 |
Fidelity
National Financial, Inc. |
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Name |
Fees
Earned or Paid in Cash ($)1 |
Stock
Awards ($)2 |
All
Other Compensation ($)3 |
Total
($) |
Sandra
D. Morgan |
150,701 |
254,837 |
15,199 |
420,737 |
Heather
H. Murren |
153,750 |
254,837 |
17,448 |
426,035 |
John
D. Rood |
— |
431,515 |
17,448 |
448,963 |
Peter
O. Shea, Jr. |
25,000 |
254,837 |
17,448 |
297,285 |
Cary
H. Thompson |
95,000 |
254,837 |
17,448 |
367,285 |
|
1. |
Represents
the cash portion of annual board and committee retainers and meeting fees earned for services as a FNF director in 2022 for all directors.
Amounts shown are not reduced to reflect directors’ elections, if any, to defer receipt of retainers into our deferred compensation
plan. |
|
2. |
Amounts shown
for all directors represent the grant date fair value of a restricted stock award granted in 2022, computed in accordance with FASB ASC
Topic 718. The awards vest over a period of three years from the grant date. Assumptions used in the calculation of the amounts of the
FNF awards are included in Note U to our audited financial statements for the fiscal year ended December 31, 2022 included in our Annual
Report on Form 10-K filed with the SEC on February 27, 2023. Restricted stock awards granted for the fiscal year ended December 31, 2022
for each director were as follows: Mr. Foley 12,246; Mr. Ammerman 6,491; Mr. Dhanidina 6,491; Mr. Hagerty 6,491; Mr. Lane 6,491; Ms. Morgan
6,491; Ms. Murren 6,491; Mr. Rood 6,491; Mr. Shea 6,491; and Mr. Thompson 6,491. The fair value of the awards as shown above is based
on a per share fair value of $39.26 for each director. As of December 31, 2022, FNF restricted stock awards outstanding for each director
were as follows: Mr. Foley 22,295; Mr. Ammerman 12,174; Mr. Dhanidina 12,078; Mr. Hagerty 12,174; Mr. Lane 12,174; Ms. Morgan 13,683;
Ms. Murren 12,174; Mr. Rood 12,174; Mr. Shea 12,174; and Mr. Thompson 12,174. For Mr. Foley, Mr. Ammerman and Mr. Rood, the amount also
includes the grant date fair value of their respective F&G performance-based restricted stock awards granted in December 2022, computed
in accordance with FASB ASC Topic 718. The F&G restricted stock awards vest over a period of three years from the grant date. Assumptions
used in the calculation of the amounts of Mr. Foley’s F&G restricted stock award are included in Note O of F&G’s Annual
Report on Form 10-K filed with the SEC on February 27, 2023. |
|
3. |
Amounts
shown for all directors reflect dividends paid with respect to restricted stock that vested in 2022, which were withheld during the period
of restriction and paid upon vesting. |
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National Financial, Inc. |
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PROPOSAL
NO. 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION |
We
believe that our compensation programs are structured to appropriately balance guaranteed base salary and performance-based at-risk annual
and long-term incentives so as to incent our executives to drive strong short and long-term performance while providing enough assured
annual compensation in the form of base salary to discourage excessive risk-taking. We believe that the success of this approach is evidenced
by our long history of delivering consistent, industry-leading operating results and investment returns to our shareholders. FNF continued
to outperform the industry in 2022 as we generated $12.5 billion of total revenue (excluding $947 million of noncash, valuation gains
on investment securities) and $1.2 billion of net earnings from continuing operations, driven by strong mortgage origination activity.
As
reflected in the following charts, over the previous five years, we have delivered consistently strong revenue and earnings. Our consistent
operating results have translated to strong returns for our shareholders. During the five-year period from January 1, 2018 through December
31, 2022, we returned approximately $2.0 billion to our shareholders in the form of cash dividends.
|
Year
ended December 31, 2022 |
2018 |
2019 |
2020 |
2021 |
2022 |
Total
Revenue Excluding Valuation Gains/Losses (in millions) |
$7,689 |
$8,141 |
$10,210 |
$15,896 |
$12,503 |
Net
Earnings from Continuing Operations (in millions) |
$635 |
$1,076 |
$1,477 |
$2,434 |
$1,152 |
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National Financial, Inc. |
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We
currently hold our “say on pay” vote every year. A majority of our shareholders approved our “say on pay” proposal
in 2022, with approximately 96% of the votes cast voted in favor of the proposal.
Our
compensation committee is committed to listening and responding to the views of our shareholders in creating and tailoring our executive
compensation programs. Following the 2022 annual meeting of shareholders and the 2021 "say on pay" shareholder vote, our Chief Executive
Officer and Chief Financial Officer met with our investors in break-out sessions at investor conferences, as well as in independent one-on-one
investor meetings, to discuss our business and stock price performance, and to discuss and receive feedback on our compensation programs.
In this regard, we met with investors at seven investor conferences and numerous one-on-one meetings. The investors with whom we met in
2022 represented over 64% of our top 20 active shareholders, who collectively owned more than 27% of our shares as of December 31, 2022.
Generally, our shareholders did not express any concerns about FNF’s executive compensation plans and practices in 2022.
We
urge our shareholders to read the "Compensation Discussion and Analysis" section of this proxy statement, which describes in detail our
compensation philosophy and how our compensation programs operate and are designed to achieve our business and compensation objectives,
as well as the “Summary Compensation Table” and other related compensation tables and disclosures, which provide detailed
information on the compensation of our named executive officers.
We
ask our shareholders to vote on the following resolution at the annual meeting:
RESOLVED, that the Company’s shareholders approve, on an advisory basis, the
compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2023 Annual Meeting of Shareholders
pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis
and executive and Director Compensation section, the compensation tables and related narrative. ![](https://content.edgar-online.com/edgar_conv_img/2023/04/27/0001104659-23-051332_tm231872d1_def14aimg015.jpg)
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National Financial, Inc. |
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The
vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation
of our named executive officers, as described in this proxy statement in accordance with the compensation disclosure rules of the Securities
and Exchange Commission. Approval of this resolution requires the affirmative vote of a majority of the shares of our common stock represented
and entitled to vote. However, as this is an advisory vote, the results will not be binding on the Company, the board or the compensation
committee, and will not require us to take any action. The final decision on the compensation of our named executive officers remains
with our compensation committee and the board, although the compensation committee and the board will consider the outcome of this vote
when making compensation decisions.
THE
BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS,
AS DISCLOSED IN THIS PROXY STATEMENT.
81 |
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National Financial, Inc. |
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PROPOSAL
NO. 3: ADVISORY VOTE ON THE FREQUENCY OF ADVISORY VOTES ON EXECUTIVE COMPENSATION |
In
accordance with the requirements of Section 14A of the Exchange Act and Rule 14a-21(b) promulgated thereunder, we are asking our shareholders
to cast a non-binding advisory vote on whether future advisory votes to approve the compensation paid to our named executive officers
(commonly referred to as a "say-on-pay vote") should be held annually, biennially or triennially.
Our
board believes that our shareholders should have the opportunity to vote on the compensation of our named executive officers annually.
Our executive compensation program is designed to support long-term value creation. While we believe that many of our shareholders think
that the effectiveness of such programs cannot be adequately evaluated on an annual basis, the board believes that at present it should
receive advisory input from our shareholders each year. The board believes that allowing our shareholders to provide us with their input
on our executive compensation philosophy, policies and practices as disclosed in our proxy statement every year is a good corporate governance
practice that is consistent with holding the board of directors accountable to our shareholders and is in the best interests of our shareholders.
Shareholders
may vote on their preferred voting frequency by selecting the option of One Year, Two Years, Three Years or Abstain on the proxy card
when voting on this Proposal No. 3. Please note that when casting a vote on this proposal, shareholders will not be voting to approve
or disapprove the board’s recommendation.
RESOLVED,
that the option of once every one year, two years, or three years that receives the highest number of votes cast for this resolution will
be determined to be the preferred frequency with which the Company is to hold a shareholder vote to approve the compensation of the named
executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission. ![](https://content.edgar-online.com/edgar_conv_img/2023/04/27/0001104659-23-051332_tm231872d1_def14aimg015.jpg)
THE
BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR A FREQUENCY OF "ANNUAL" (EVERY ONE YEAR) FOR FUTURE ADVISORY VOTES ON THE COMPENSATION
PAID TO OUR NAMED EXECUTIVE OFFICERS.
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Fidelity
National Financial, Inc. |
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PROPOSAL
NO. 4: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
GENERAL
INFORMATION ABOUT ERNST & YOUNG LLP
Although
shareholder ratification of the appointment of our independent registered public accounting firm is not required by our bylaws or otherwise,
we are submitting the selection of Ernst & Young LLP (EY) to our shareholders for ratification as a matter of good corporate
governance practice. Even if the selection is ratified, our audit committee in its discretion may select a different independent registered
public accounting firm at any time if it determines that such a change would be in the best interests of the Company and our shareholders.
If our shareholders do not ratify the audit committee’s selection, the audit committee will take that fact into consideration, together
with such other factors it deems relevant, in determining its next selection of our independent registered public accounting firm.
In
choosing our independent registered public accounting firm, our audit committee conducts a comprehensive review of the qualifications
of those individuals who will lead and serve on the engagement team, the quality control procedures the firm has established, and any
issue raised by the most recent quality control review of the firm. The review also includes matters required to be considered under the
Securities and Exchange Commission rules on “Auditor Independence,” including the nature and extent of non-audit services
to ensure that they will not impair the independence of the accountants.
Representatives
of EY are expected to be present at the annual meeting. These representatives will have an opportunity to make a statement if they so
desire and will be available to respond to appropriate questions.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
The
audit committee has appointed EY to audit the consolidated financial statements of the Company for the 2023 fiscal year. EY has continuously
acted as our independent registered public accounting firm since August 2, 2017. For services rendered to us during or in connection with
our years ended December 31, 2022 and December 31, 2021, we were billed the following fees by EY:
|
2022 (In
thousands) |
2021 (In
thousands) |
Audit
Fees |
$8,706 |
$7,480 |
Audit-Related
Fees |
$440 |
$451 |
Tax
Fees |
$134 |
$270 |
All
Other Fees |
$7 |
$7 |
83 |
Fidelity
National Financial, Inc. |
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Audit
Fees. Audit fees consisted principally
of fees for the audits, registration statements and other filings related to the Company’s 2022 and 2021 financial statements, and
audits of the Company’s subsidiaries required for regulatory reporting purposes, including billings for out-of-pocket expenses incurred.
Audit-Related
Fees. Audit-related fees in
2022 and 2021 consisted principally of fees for Service Organization Control Reports.
Tax
Fees. Tax fees for 2022 and
2021 consisted principally of fees for tax compliance, tax planning and tax advice.
All
Other Fees. All other fees for
2022 and 2021 consisted principally of fees associated with the use of EY’s accounting research product.
APPROVAL
OF ACCOUNTANTS’ SERVICES
In
accordance with the requirements of the Sarbanes-Oxley Act of 2002, all audit and audit-related work and all non-audit work performed
by EY is approved in advance by the audit committee, including the proposed fees for such work. Our pre-approval policy provides that,
unless a type of service to be provided by EY has been generally pre-approved by the audit committee, it will require specific pre-approval
by the audit committee. In addition, any proposed services exceeding pre-approved maximum fee amounts also require pre-approval by the
audit committee. Our pre-approval policy provides that specific pre-approval authority is delegated to our audit committee chairman, provided
that the estimated fee for the proposed service does not exceed a pre-approved maximum amount set by the committee. Our audit committee
chairman must report any pre-approval decisions to the audit committee at its next scheduled meeting.
THE
BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THE RATIFICATION OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE 2023 FISCAL YEAR.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND EXECUTIVE OFFICERS
The
number of our common shares beneficially owned by each individual or group is based upon information in documents filed by such person
with the Securities and Exchange Commission, other publicly available information or information available to us. Percentage ownership
in the following tables is based on 272,191,238 shares of our common stock outstanding as of April 21, 2023. Unless otherwise indicated,
each of the shareholders has sole voting and investment power with respect to the shares of our common stock beneficially owned by that
shareholder. The number of shares beneficially owned by each shareholder is determined under rules issued by the Securities and Exchange
Commission.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The
following table sets forth information regarding beneficial ownership of our common stock by each shareholder who is known by the Company
to beneficially own 5% or more of such class:
|
Fidelity
National Financial, Inc. |
84 |
|
|
|
|
|
|
Name |
Shares
Beneficially Owned1 |
Percent
of Series2 |
BlackRock,
Inc. 55 East 52nd Street,
New York, NY 10022 |
35,515,436 |
13.0% |
The
Vanguard Group 100 Vanguard
Boulevard, Malvern, PA 19355 |
28,815,996 |
10.6% |
|
1. |
Based
on information as of December 31, 2022 that has been publicly filed with the SEC. |
|
2. |
Applicable
percentages based on shares of our common stock outstanding as of April 21, 2023. |
SECURITY
OWNERSHIP OF MANAGEMENT AND DIRECTORS
The
following table sets forth information regarding beneficial ownership as of April 21, 2023 of our common stock by:
|
• |
Each
of our directors and nominees for director; |
|
• |
Each
of the named executive officers as defined in Item 402(a)(3) of Regulation S-K promulgated by the Securities and Exchange Commission;
and |
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of our executive officers and directors as a group. |
Name1 |
Number
of Shares |
Percent
of Total |
Douglas
K. Ammerman |
131,860 |
* |
Halim
Dhanidina |
14,870 |
* |
William
P. Foley, II2 |
9,195,797 |
3.4% |
Micheal
L. Gravelle |
217,366 |
* |
Thomas
M. Hagerty |
332,031 |
* |
Roger
Jewkes3 |
602,454 |
* |
Daniel
D. (Ron) Lane |
271,325 |
* |
Sandra
D. Morgan |
21,867 |
* |
Heather
H. Murren |
24,915 |
* |
Michael
J. Nolan4 |
395,700 |
* |
Anthony
J. Park5 |
429,433 |
* |
Raymond
R. Quirk6 |
2,248,828 |
* |
John
D. Rood |
231,058 |
* |
Peter
T. Sadowski7 |
229,827 |
* |
Peter
O. Shea, Jr.8 |
252,427 |
* |
Cary
H. Thompson |
57,426 |
* |
All
directors and officers (15 persons) |
14,657,183 |
5.4% |
|
* |
Represents less than 1% of our common stock. |
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1. |
The business address of each beneficial
owner is c/o Fidelity National Financial, Inc., 601 Riverside Avenue, Jacksonville, Florida 32204. |
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2. |
Includes 2,245,122 shares of our common stock held by Folco
Development Corporation, of which Mr. Foley and his spouse are the sole shareholders; 708,106 shares of our common stock owned by the
Foley Family Charitable Foundation, and 1,265,826 shares held by Bilcar LLC. Includes 2,300,000 directly owned shares and 1,700,000 shares
owned by Folco Development Corporation that are pledged as security in accordance with a previously granted waiver to our hedging and
pledging policy. |
|
3. |
Information as of August 5, 2022. Includes
496,040 shares held by the Jewkes Family Trust. |
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4. |
Includes 11,085 shares held by the Michael
J. Nolan Trust. |
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5. |
Includes 272,759 shares owned by the Anthony
J. Park and Deborah L. Park Living Trust. |
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6. |
Includes 1,390,002 shares held by the
Quirk 2002 Trust, and 47,193 shares held by the Raymond Quirk 2004 Trust. |
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7. |
Includes 94,908 shares held by the Sadowski
Living Trust and 473 shares held in an individual retirement arrangement account. |
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8. |
Includes 15,101 shares held by the Peter
O. Shea, Jr. Family Trust, 3,773 shares held by the Sarah H. Shea Trust, 3,773 shares held by the Selva Family Trust, 18,874 shares held
by Siam II Partners and 3,773 shares held by Toyopa Partners, LP. |
SECURITIES
AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The
following table provides information as of December 31, 2022 about our common stock which may be issued under our equity compensation
plans:
Plan
Category |
Number
of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights |
Weighted
Average Exercise Price of Outstanding Options, Warrants and Rights |
Number
of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities to be Issued
Upon Exercise of Outstanding Options, Warrants and Rights) |
Equity
compensation plans approved by security holders |
— |
$0.00 |
10,263,2611 |
Equity
compensation plans not approved by security holders |
1,172,607 |
$35.15 |
1,533,4172 |
Total |
1,172,607 |
$35.15 |
11,796,6781 |
|
1. |
In
addition to being available for future issuance upon exercise of options and SARs under the FNF omnibus plan, these shares of common stock
may be issued in connection with new awards of restricted stock, restricted stock units, performance shares, performance units, options
or other stock-based awards. |
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2. |
1,533,417
shares may be issued under the FNF FGL Holdings 2017 Omnibus Incentive Plan, which was assumed and amended by FNF in connection with the
acquisition of F&G. In accordance with New York Stock Exchange Rules, no stockholder approval was required for the listing of the
shares under the plan or for the assumption and amendment of the plan by FNF. Awards under the plan may be made to employees, directors
and consultants of FNF and its subsidiaries, other than individuals who were employed or providing services to FNF or any of its subsidiaries
immediately prior to date of the merger, June 1, 2020. No awards may be made under the plan after July 24, 2027. |
CERTAIN
RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
AGREEMENTS
WITH CANNAE
On
November 17, 2017 we completed the split-off, which we refer to as the Split-Off, of our former wholly-owned subsidiary Cannae Holdings,
Inc., or Cannae, which consists of the businesses,
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assets and
liabilities formerly attributed to our FNF Ventures Group, or FNF Group, including Ceridian Holding, LLC, American Blue Ribbon
Holdings, LLC and T-System Holding LLC. As a result of the Split-Off, FNF and Cannae operate separately. In connection with the Split-Off,
our title insurance underwriters Fidelity National Title Insurance Company, Chicago Title Insurance Company and Commonwealth Land Title
Insurance Company contributed an aggregate of $100 million to Cannae in exchange for 5,706,134 shares of Cannae common stock. In order
to maintain the tax-free treatment of the November 17, 2017 split-off of Cannae Holdings, Inc., we were required to dispose of these
shares by November 17, 2022. In the year ended December 31, 2022, and prior to November 17, 2022, Cannae repurchased all of the shares
previously held by our underwriters for $108.7 million (the Cannae Share Repurchase). FNF no longer holds any shares of Cannae common
stock and Cannae is no longer considered a related party.
We and Cannae
have overlapping executive officers and directors. William P. Foley, II, our non-executive Chairman, also serves as non-executive Chairman
and is a director of Cannae; and Michael L. Gravelle, our Executive Vice President, General Counsel and Corporate Secretary, serves as
Executive Vice President, General Counsel and Corporate Secretary of Cannae. In order to govern certain of the ongoing relationships
between us and Cannae and to provide mechanisms for an orderly transition, we entered entered into certain agreements with Cannae, the
terms of which are summarized below.
VOTING
AGREEMENT
In connection
with the Split-Off and the issuance of the FNF Cannae shares, we entered into a voting agreement with Cannae (the voting agreement),
pursuant to which we agreed to cause our Cannae shares to be counted as present at any meeting of the stockholders of Cannae for the
purpose of establishing a quorum. Additionally, under the voting agreement, we agreed to vote all of our Cannae shares in the same manner
as, and in the same proportion to, all shares voted by holders of Cannae common stock (other than FNF and our subsidiaries) until the
date on which FNF and our subsidiaries no longer beneficially own shares of Cannae common stock. In addition, we agreed that we would
not deposit any of our Cannae shares into a voting trust or grant any proxies or enter into a voting agreement, power of attorney or
voting trust with respect to any of our Cannae shares, or take any action that would have the effect of preventing or materially delaying
us from performing any of our obligations under the voting agreement. As a result of the Cannae Share Repurchase, we no longer have any
obligations under the Voting Agreement.
TAX
MATTERS AGREEMENT
We have
also entered into a tax matters agreement with Cannae that governs our respective rights, responsibilities and obligations with respect
to taxes, the filing of tax returns, the control of audits and other tax matters. Under the tax matters agreement, the parties agreed
to indemnify one another for certain agreed specified losses incurred by the other.
CORPORATE
SERVICES AGREEMENT
We entered
into a corporate services agreement with Cannae (the corporate services agreement) pursuant to which we provide Cannae with certain specified
services, including insurance administration and risk management; other services typically performed by our legal, tax, human resources,
accounting and internal audit departments; and such other similar services that Cannae may from time-to-time request or require. The
corporate services agreement was to continue in effect until the earlier of (i) the date on which the corporate services agreement is
terminated
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by mutual
agreement of Cannae and FNF and (ii) the third anniversary of the date on which the corporate services agreement was entered into. On
October 7, 2020, we entered into an Extension of Corporate Services Agreement (the Extension) with Cannae that extended the corporate
services agreement for two years until November 17, 2022.
During the
initial three-years, we provided these corporate services at no cost, other than reimbursement for reasonable out-of-pocket costs and
expenses incurred by us in connection with providing such services to Cannae. Under the Extension, FNF will provide certain of the corporate
services at a standard allocated cost plus 10%. The Extension will automatically renew for successive one-year terms unless FNF and Cannae
mutually agree to terminate the agreement. Pursuant to the Extension, we received $1.7 million from Cannae in consideration of services
provided by us under the corporate services agreement during 2022.
REGISTRATION
RIGHTS AGREEMENT
FNF’s
title insurance underwriter subsidiaries that own Cannae shares (the Registration Rights Agreements parties) entered into registration
rights agreements with Cannae. The registration rights agreements provided the Registration Rights Agreements parties, and their permitted
transferees, with the right to require Cannae, at its expense, to register shares of Cannae common stock that the Registration Rights
Agreements parties hold. The registration rights agreement also included certain demand rights, shelf-registration obligations and piggy-back
registration rights that could require Cannae to take certain actions to register its securities if requested. The agreements also provided
that Cannae will pay certain expenses of the electing holders relating to such registrations and indemnify them against certain liabilities
that may arise under the Securities Act. Neither we nor Cannae have any further obligations under the registration rights agreement as
a result of the Cannae Share Repurchase.
REVOLVER
NOTE
We entered
into a revolver note with Cannae, which allows Cannae to borrow revolving loans from us from time to time in an aggregate amount not
to exceed $100 million. The revolving loans accrue interest at Term SOFR plus 450 basis points and mature on November 17, 2025. The maturity
date is automatically extended for additional five-year terms unless notice of non-renewal is otherwise provided by either FNF or Cannae,
in their sole discretion. On May 15, 2022, we entered into an amended and restated revolver note with Cannae (the Amended Cannae Revolver)
which limited the use of proceeds from borrowings to the repurchase of Cannae common stock from us. Cannae completed the repurchase of
common stock from us in the second quarter of 2022.
As of December
31, 2022, there was an outstanding balance of $84.7 million under the Amended Cannae Revolver. In fiscal year 2022, Cannae paid $3.5
million of interest to us related to borrowings under the Amended Cannae Revolver.
OFFICE
SPACE
We paid
$320,000 of rent in 2022 to Cannae with respect to our continued use of office space in Cannae’s corporate headquarters in Las
Vegas, Nevada.
OTHER
RELATED PARTY TRANSACTIONS
During 2022,
we paid, in the ordinary course of business, amounts to certain companies owned in whole or part by Mr. Foley including: $569,250 to
Rock Creek Cattle Company, Ltd. and affiliated
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companies
and $303,765 to Wharekauhau Country Estate Limited related primarily to hosting Company events, $1,067,856 to Black Knight Sports and
Entertainment, LLC related primarily to the purchase of season tickets and other tickets used for client entertainment and employee recognition,
$274,394 to Foley Family Wines for wine purchases related to employee recognitions, and $235,068 to Mr. Foley’s other affiliated
companies primarily for travel to and hosting Company events. We believe the amounts charged to us in the foregoing transactions were
fair and reasonable and represent market rates that would be charged to unaffiliated third-party customers for the same types of services.
We believe that FNF receives intangible business benefits as a result of these activities as they foster increased loyalty to the Company.
On
November 1, 2019, we entered into a services agreement with Trasimene Capital Management, LLC (Trasimene) pursuant to which Trasimene
will provide certain advisory services to us, including but not limited to ongoing tax and finance services and investment advisory services
with respect to potential acquisitions, divestitures and other corporate transactions. In consideration of the services provided by Trasimene
to FNF, the services agreement provides that we will pay Trasimene a mutually agreed upon fee in connection with any acquisitions, divestitures,
financings or liquidity events, which fee shall be consistent with market rates. No fees were paid to Trasimene under the services agreement
in 2022.
In
2022, we accrued expenses of $735,741 payable to Trasimene related to aircraft use. Also in 2022, in connection with the settlement of
a stockholder derivative lawsuit styled, City of Miami General Employees’ and Sanitation Employees’ Retirement Trust v. Fidelity
National Financial, et al., Trasimene paid us approximately $7.5 million. Mr. Foley is the Managing Member and a Senior Managing Director
and holds a controlling interest in Trasimene.
Sara
Larkin, the daughter-in-law of Mr. Quirk, is an attorney who is employed by a subsidiary of the Company as underwriting counsel. In 2022,
Ms. Larkin’s gross earnings were $1,090,876, which is consistent with other employees holding similar titles at the Company. She
also received health and other benefits customarily provided to similarly situated employees.
Our
audit committee has reviewed and approved each of the transactions described above in accordance with the terms of our Code of Conduct
prior to the board’s adoption of the RPT Policy and the establishment of the related person transaction committee in August 2022.
Related party transactions entered into since August 2022 are approved by the related person transaction committee in accordance with
our RPT Policy, which is described below.
REVIEW,
APPROVAL OR RATIFICATION OF TRANSACTIONS WITH RELATED PERSONS
Pursuant
to our codes of ethics, a “conflict of interest” occurs when an individual’s private interest interferes or appears
to interfere with our interests, and can arise when a director, officer or employee takes actions or has interests that may make it difficult
to perform his or her work objectively and effectively. Anything that would present a conflict for a director, officer or employee would
also likely present a conflict if it were related to a member of his or her family. Our code of ethics states that clear conflict of
interest situations involving directors, executive officers and other employees who occupy supervisory positions or who have discretionary
authority in dealing with any third party specified below may include the following:
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Any significant ownership interest in any supplier
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Any
consulting or employment relationship with any customer, supplier or competitor; and |
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Selling
anything to us or buying anything from us, except on the same terms and conditions as comparable directors, officers or employees
are permitted to so purchase or sell. |
Our
policy has been to review all relationships and transactions in which we and our directors or executive officers (or their immediate
family members) are participants to determine whether the director or officer in question has or may have a direct or indirect material
interest. Our Chief Compliance Officer, together with our legal staff, is primarily responsible for developing and implementing procedures
to obtain the necessary information from our directors and officers regarding transactions to/from related persons. Any material transaction
or relationship that could reasonably be expected to give rise to a conflict of interest must be discussed promptly with our Chief Compliance
Officer. The Chief Compliance Officer, together with our legal staff, then reviews the transaction or relationship, and considers the
material terms of the transaction or relationship, including the importance of the transaction or relationship to us, the nature of the
related person’s interest in the transaction or relationship, whether the transaction or relationship would likely impair the judgment
of a director or executive officer to act in our best interest, and any other factors such officer deems appropriate. After reviewing
the facts and circumstances of each transaction, the Chief Compliance Officer, with assistance from the legal staff, determines whether
the director or officer in question (or their immediate family member) has a direct or indirect material interest in the transaction
and whether to approve the transaction in question.
With
respect to our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, our codes of ethics require that each such
officer must:
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• |
Discuss
any material transaction or relationship that could reasonably be expected to give rise to a conflict of interest with our General
Counsel; |
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• |
In
the case of our Chief Financial Officer and Chief Accounting Officer, obtain the prior written approval of our General Counsel for
all material transactions or relationships that could reasonably be expected to give rise to a conflict of interest; and |
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• |
In
the case of our Chief Executive Officer, obtain the prior written approval of the audit committee for all material transactions that
could reasonably be expected to give rise to a conflict of interest. |
In
the case of any material transactions or relationships involving our Chief Financial Officer or our Chief Accounting Officer, the General
Counsel must submit a list of any approved material transactions semiannually to the audit committee for its review.
Under
Securities and Exchange Commission rules, certain transactions in which we are or will be a participant and in which our directors, executive
officers, certain shareholders and certain other related persons had or will have a direct or indirect material interest are required
to be disclosed in this related person transactions section of our proxy statement. In addition to the procedures above, our audit committee
has reviewed and approved or ratified any such transactions that are required to be disclosed. The committee makes these decisions based
on its consideration of all relevant factors. The review may be before or after the commencement of the transaction. If a transaction
is reviewed and not approved or ratified, the committee may recommend a course of action to be taken.
In
August 2022, our board adopted the RPT Policy setting forth the policies and procedures for the
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reporting,
review and approval or ratification of transactions with Related Persons covered by the RPT Policy. The RPT policy covers any transaction,
arrangement or series of transactions or arrangements in which the Company or any of its subsidiaries participates (whether or not we
are a party) and a Related Person has or will have a direct or indirect material interest in such transaction and the amount involved
exceeds $120,000 (a Related Person Transaction). Related Persons under the RPT Policy are (i) our directors, director nominees or executive
officers, (ii) any beneficial owner of more than 5% of our common stock or any immediate family member of such holder, or (iii) any firm,
corporation or entity in which any director or executive officer is a partner, principal, managing member, executive officer or who holds
a 50% or greater beneficial ownership interest. The Policy is overseen by our related person transaction committee. The Chief Legal Officer
or General Counsel (together with the Chair of the related person transaction committee) will review reported transactions to determine
if they could be a Related Person Transaction. Any Related Person Transaction will be reported to the related person transaction committee
with a summary of material facts for review and approval or ratification. Under the RPT Policy, in reviewing any Related Person Transaction,
our related person transaction committee considers the relevant facts and circumstances, and whether the transaction is in, or not inconsistent
with, the best interests of the Company.
In
addition to the RPT Policy, the provisions of the Company’s Code of Business Conduct and Ethics and the Code of Ethics for Senior
Financial Officers may apply to potential conflict of interest situations.
DELINQUENT
SECTION 16(a) REPORTS
Section
16 of the Securities Exchange Act of 1934 requires the Company’s executive officers and directors to file reports of their ownership,
and changes in ownership, of the Company’s common stock with the Securities and Exchange Commission. Executive officers and directors
are required by the Securities and Exchange Commission’s regulations to furnish the Company with copies of all forms they file
pursuant to Section 16 and the Company is required to report in this Annual Report on Form 10-K any failure of its directors and executive
officers to file by the relevant due date any of these reports during fiscal year 2022. Based solely upon a review of these reports,
we believe that Daniel D. Lane had one late filing in 2022 due to an administrative oversight. All other directors and executive officers
of the Company complied with the requirements of Section 16(a) in 2022.
SHAREHOLDER
PROPOSALS AND NOMINATIONS
Any
proposal that a shareholder wishes to be considered for inclusion in the proxy and proxy statement relating to the Annual Meeting of
Shareholders to be held in 2024, including submissions of shareholder director nominations in accordance with the proxy access procedures
set forth in our bylaws, must be received by the Company no later than December 29, 2023. Any other proposal or director nomination that
a shareholder wishes to bring before the 2024 Annual Meeting of Shareholders without inclusion of such matter in the Company’s
proxy materials must also be received by the Company no later than December 29, 2023. All proposals and nominations must comply with
the applicable requirements or conditions established by the Securities and Exchange Commission and the Company’s bylaws, which
require among other things, certain information to be provided in connection with the submission of shareholder proposals. All proposals
and nominations must be directed to the Secretary of the Company at 601 Riverside Avenue, Jacksonville, Florida 32204. The persons designated
as proxies by the Company in connection with the 2023 Annual Meeting of Shareholders will have discretionary voting authority with respect
to any shareholder proposal for which the Company does not receive
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timely
notice.
In
addition to satisfying the foregoing requirements, to comply with the universal proxy rules, shareholders who intend to solicit proxies
in reliance on the SEC’s universal proxy rule for director nominees must provide notice that sets forth the information required
by Rule 14a-19 under the Exchange Act of 1934, as amended, no later than April 15, 2024 and must comply with the additional requirements
of Rule 14a-19(b).
OTHER
MATTERS
The
Company knows of no other matters to be submitted at the meeting. If any other matters properly come before the meeting, your proxy card
confers discretionary authority on the persons named in your proxy card to vote as they deem appropriate on such matters. It is the intention
of the persons named in your proxy card to vote the shares in accordance with their best judgment. persons named in your proxy card to
vote the shares in accordance with their best judgment.
AVAILABLE INFORMATION
The
Company files Annual Reports on Form 10-K with the Securities and Exchange Commission. A copy of the Annual Report on Form 10-K for the
fiscal year ended December 31, 2022 (except for certain exhibits thereto), including our audited financial statements and financial statement
schedules, may be obtained, free of charge, upon written request by any shareholder to Fidelity National Financial, Inc., 601 Riverside
Avenue, Jacksonville, Florida 32204, Attention: Investor Relations. Copies of all exhibits to the Annual Report on Form 10-K are available
upon a similar request, subject to reimbursing the Company for its expenses in supplying any exhibit.
By
Order of the Board of Directors
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Michael J.
Nolan
Chief Executive
Officer
Dated:
April 27, 2023
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FIDELITY
NATIONAL FINANCIAL, INC.
601 RIVERSIDE
AVENUE
JACKSONVILLE,
FLORIDA 32204
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Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. V14971-P90300 ! ! ! For All Withhold All For All Except For Against Abstain For Against Abstain ! ! ! To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. FIDELITY NATIONAL FINANCIAL, INC. 601 RIVERSIDE AVE. JACKSONVILLE, FL 32204 Nominees: 01) William P. Foley, II 02) Douglas K. Ammerman 03) Thomas M. Hagerty 04) Peter O. Shea, Jr. 1. Election of Class III directors to serve until the 2026 annual meeting of shareholders. FIDELITY NATIONAL FINANCIAL, INC. The Board of Directors recommends you vote FOR ALL for Proposal 1: Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. 2. Approval of a non-binding advisory resolution on the compensation paid to our named executive officers. 3. Selection, on a non-binding advisory basis, of the frequency (annual or "1 Year," biennial or "2 Years," triennial or "3 Years") with which we solicit future non-binding advisory votes on the compensation paid to our named executive officers. 4. Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the 2023 fiscal year. The Board of Directors recommends you vote FOR Proposals 2, 4 and 1 YEAR on Proposal 3: NOTE: To transact such other business as may properly come before the meeting or any postponement or adjournment thereof. 1 Year 2 Years 3 Years Abstain ! ! ! ! ! ! ! VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on June 13, 2023 for shares held directly and by 11:59 p.m. Eastern Time on June 11, 2023 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/FNF2023 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on June 13, 2023 for shares held directly and by 11:59 p.m. Eastern Time on June 11, 2023 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. SCAN TO VIEW MATERIALS & VOTEw |
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V14972-P90300 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. Fidelity National Financial, Inc. Meeting Information 2023 Annual Meeting of Shareholders June 14, 2023 10:00 a.m. Eastern Time www.virtualshareholdermeeting.com/FNF2023 FIDELITY NATIONAL FINANCIAL, INC. THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF FIDELITY NATIONAL FINANCIAL, INC. FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 14, 2023 The undersigned hereby appoints the Chief Executive Officer, Corporate Secretary and Assistant Corporate Secretary of Fidelity National Financial, Inc. ("FNF"), and each of them, as Proxies, each with full power of substitution, and hereby authorizes each of them to represent and to vote, as designated on the reverse side, all the shares of common stock held of record by the undersigned as of April 21, 2023, at the Annual Meeting of Shareholders to be held at 10:00 a.m., Eastern Time, or any postponement or adjournment thereof. The meeting will be held virtually at www.virtualshareholdermeeting.com/FNF2023. This instruction and proxy card is also solicited by the Board of Directors of FNF for use at the Annual Meeting of Shareholders on June 14, 2023 at 10:00 a.m., Eastern Time, or any postponement or adjournment thereof, from persons who participate in the Fidelity National Financial, Inc. 401(k) Profit Sharing Plan (the "401(k) Plan"). By signing this instruction and proxy card, the undersigned hereby instructs Delaware Charter Guarantee & Trust Company, doing business as Principal Trust Company (the "Trustee" for the 401(k) Plan), to exercise the voting rights relating to any shares of common stock allocable to his or her account(s) as of April 21, 2023. For shares voted by mail, this instruction and proxy card is to be returned to the tabulation agent (Fidelity National Financial, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717). All voting instructions for shares in the 401(k) Plan, whether voted by mail, telephone or internet, must be received by 11:59 p.m., Eastern Time, on June 11, 2023. The Trustee will tabulate the votes from all 401(k) Plan participants received by the deadline and will determine the ratio of votes for and against each item. The Trustee will then vote all shares held in the 401(k) Plan according to these ratios. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO SUCH DIRECTION IS MADE, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. Continued and to be signed on reverse side |