You are cordially invited to attend the 2016 Annual Meeting of Shareholders of Citrix Systems, Inc. to be held on Thursday,
June 23, 2016 at 4:00 p.m. Pacific time, at our offices at 4580 Great America Parkway, Santa Clara, California 95054, United States.
At the 2016 Annual
Meeting, the agenda includes: (1) the election of nine directors for one-year terms; (2) the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2016; and (3) an
advisory vote to approve the compensation of our named executive officers. The Board of Directors unanimously recommends that you vote FOR the election of the director nominees and FOR each of the other matters.
All shareholders are cordially invited to attend the 2016 Annual Meeting in person. We are providing proxy material access to our shareholders via the Internet.
Accordingly, you can access proxy materials and vote at
www.proxyvote.com
. Details regarding the matters to be acted upon at this 2016 Annual Meeting are described in the Notice of Internet Availability of Proxy Materials you received in the
mail. Please give the proxy materials your careful attention.
You may vote via the Internet or by telephone by following the instructions on your Notice of
Internet Availability and on that website. In order to vote via the Internet or by telephone, you must have the shareholder identification number which is provided in your Notice. If you have requested a proxy card by mail, you may vote by signing,
voting and returning that proxy card in the envelope provided. If you attend the 2016 Annual Meeting, you may vote in person even if you have previously returned your proxy card or have voted via the Internet or by telephone. Please review the
instructions for each voting option described in the Notice and in this Proxy Statement. Your prompt cooperation will be greatly appreciated.
ANTONIO G. GOMES
Executive Compensation Highlights
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Highlights of Our Compensation Approach
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Approach
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Implementation
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Link senior executives’ annual target compensation directly with company performance
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In 2015, former CEO’s total target compensation (excluding retention and retirement benefits) was 50% variable cash compensation and market performance-based RSUs
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Approximately 45% of the target compensation of our other
Named Executive Officers, on average, was performance based (excluding our Executive Chairman, Interim Chief Executive Officer and President)
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Current President and Chief Executive Officer’s, Kirill
Tatarinov’s, initial total target direct compensation is 57% performance-based compensation
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Our shareholders seek long-term total shareholder return, and our executives should share that
goal
This link to performance has proven effective
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At least 50% of annual equity awards to executive officers are
awarded as market performance-based RSUs that vest based on a relative total shareholder return metric
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The performance period for the market performance-based
restricted stock units granted in 2013, the second year we granted awards having a relative total shareholder return performance metric, ended on December 31, 2015
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During the three-year performance period for these awards, the
Nasdaq Composite Index significantly exceeded our own returns. Based on this comparative performance, no shares vested under these awards, the second consecutive year of no vesting under this program. This significantly impacts our executive
officers’ realizable compensation
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For example, the average realizable equity compensation of our named executive officers, listed in our 2014 Proxy Statement (the year we reported the market performance-based restricted
stock units granted in 2013), was only 57% of the overall value of the 2013 stock awards granted to such named executive officers, and only 64% of the average 2013 total compensation originally reported as shown in the following graphic. We did not
grant discretionary bonuses or awards or make any compensation adjustments to compensate for the awards that failed to vest
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(1)
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Values are calculated using the aggregate grant date fair value of restricted stock unit awards in 2013, the year in which the grant was made, and are as reported in the Summary Compensation Table in our 2014 Proxy
Statement. The values include service-based and market performance-based restricted stock unit awards. The assumptions we used for calculating the grant date fair value are set forth in Note 7 to our consolidated financial statements included in our
Annual Report on Form 10-K for the year ended December 31, 2013, which was filed with the SEC on February 20, 2014. In the case of market performance-based restricted stock units, the fair value reported in the Summary Compensation
Table in our 2014 Proxy Statement was the probable outcome, which was 100% target achievement. No shares vested under these market performance-based awards; and as a result, no value is realizable for these awards.
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Highlights of Our Compensation Approach
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Approach
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Implementation
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Payout opportunity levels for executive variable cash compensation should motivate performance that meets or exceeds our financial plan
objectives
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In 2015, each executive officer’s variable cash compensation plan award was based 100% on the achievement of objective financial operating targets consistent with our annual operating
plan
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Based on 2015 company performance, variable cash compensation
plan awards for 2015 paid 118.4% of the target amount
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Over the past eight years, our variable cash compensation plan awards have paid out between 56.4% and 130.4% and paid above 100% three times
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To account for the speed of the business environment within the software sector, our compensation decisions should be flexible so that it can
be tailored to the specific challenges facing the company at a given time
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To support our strategic and operational initiatives, we implemented an incentive program in 2015 for certain executive officers to recognize the critical role they play in executing upon
these initiatives and maintaining the commitment and engagement of our employees, partners and customers during this process
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Accordingly, in September 2015, we entered into incentive
agreements with certain of our executive officers that provided for a retention equity grant and severance benefits
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See
Individual Executive Compensation Decisions
beginning on page 57 for further details regarding our Named Executive
Officers’ compensation.
Governance Highlights
The following summary of our governance policies and facts highlights our commitment to governance practices that protect shareholder rights:
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ü
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Eliminated classified Board
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ü
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Strong focus on pay-for-performance
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ü
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Lead independent director
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ü
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Stock ownership guidelines for executive officers and directors
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ü
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Annual Board self-assessment process, including peer evaluations
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Policies prohibiting hedging, short selling and pledging of our common stock
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Active shareholder engagement
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Commitment to evolving our Board
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ü
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Majority voting for director elections
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ü
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Long-standing commitment to corporate responsibility
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ü
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Independent directors regularly meet without management present
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ü
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Board oversight of risk management
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Our Board of Directors
The following table provides summary information about each Director nominee and the committees on which they serve. Each Director will be elected for a one-year term.
Ad Hoc Committees Formed In July 2015
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Our Board formed a Search Committee following Mark B. Templeton’s announcement that he intended to retire. In January 2016, after completing our CEO search with the appointment of Kirill Tatarinov, the Search
Committee was disbanded.
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Our Board formed an Operations Committee to work closely with our management team in a comprehensive review of our operations and capital structure, building upon the company’s previously announced initiatives to
drive operating margin expansion through simplification, efficiency and portfolio refinements. In February 2016, the Operations Committee was disbanded following completion of its work to drive our operational review.
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8
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Director Dashboard
Voting Matters
The
proposals to be considered at the 2016 Annual Meeting are as follows:
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Board
recommendation
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See page number
for more detail
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PROPOSAL 1
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Election of Directors
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FOR
each Nominee
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90
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PROPOSAL 2
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Ratification of Appointment of Independent Registered Public Accounting Firm for 2016
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FOR
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91
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PROPOSAL 3
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Non-binding Advisory Vote to Approve the Compensation of our Named Executive Officers (Say-on-Pay)
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FOR
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92
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Part 1 Corporate Governance
Independence of Members of Our Board
Our Board of Directors has determined that seven of our directors (Ms. Caldwell, Mr. Cohn, Mr. Daleo, Mr. Demo, Mr. Sacripanti, Mr. Smith
and Mr. Sullivan) are independent within the meaning of the director independence standards of The Nasdaq Stock Market LLC, or Nasdaq, and the SEC, including Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended. Furthermore,
our Board of Directors has determined that each member of each of our regular standing committees of the Board of Directors is independent within the meaning of Nasdaq’s and the SEC’s director independence standards. In making this
determination, our Board of Directors solicited information from each of our directors regarding whether such director, or any member of his or her immediate family, had a direct or indirect material interest in any transactions involving Citrix,
was involved in a debt relationship with Citrix or received personal benefits outside the scope of such person’s normal compensation. The Board of Directors determined that each of Mr. Calderoni, who is currently serving as our Executive
Chairman, and Mr. Tatarinov, who is currently serving as our President and Chief Executive Officer, is not independent within these definitions. Our Board of Directors considered the responses of our directors, and independently considered the
commercial agreements, acquisitions, and other material transactions entered into by Citrix during 2015.
Board
Leadership Structure
Our Corporate Governance Guidelines provide our Board of Directors with flexibility to select the appropriate leadership structure
based on the specific needs of our business and the best interests of our shareholders. Our Corporate Governance Guidelines set forth our general policy that the positions of Chairperson of the Board of Directors and Chief Executive Officer, will be
held by different persons. In certain circumstances, however, our Board of Directors may determine that it is in our best interests for the same person to hold the positions of Chairperson and Chief Executive Officer, or, in the case of
Mr. Calderoni’s appointment as Executive Chairman in July 2015, for the position of Chairperson to also be an executive role. In such event, the Board of Directors will appoint an independent member of our Board of Directors
as the Lead Independent Director, which is currently Godfrey R. Sullivan. Our general policy is that the position of Chairperson or Lead Independent Director, as the case may be, will be held by
an independent member of our Board of Directors. The Chairperson or Lead Independent Director will preside at executive sessions of the independent directors and will have such further responsibilities as the full Board of Directors may designate
from time to time.
Executive Sessions of Independent Directors
Executive sessions of the independent directors are held at least four times a year following regularly scheduled in-person meetings of our Board of Directors.
Executive sessions do not include Messrs. Calderoni and Tatarinov and the Lead Independent Director of our Board of Directors, Mr. Sullivan, is responsible for chairing the executive sessions.
Executive Succession
Executive succession is regularly reviewed and discussed by our Board of Directors in Board meetings and in executive sessions of the Board of Directors. At least one
Board meeting each year is focused on human capital, including formal reviews of executive talent, organizational structure and succession planning for the role of Chief Executive Officer and other senior executive roles. In these sessions, among
other things, our Board of Directors reviews the assumptions, processes and strategy for various succession events and reviews potential internal and external successor candidates. Potential external candidates may also be identified as part of this
process. The Board of Director’s goal is to have a long-term and continuing program for effective executive development and succession and to be prepared for both short-term unexpected loss of a key leader and permanent transitions.
During 2015, the extraordinary changes facing our business required that our Board of Directors revisit the criteria for the next Chief Executive Officer and look
beyond the established list of internal and external candidates. Our Board formed a Search Committee following Mark B. Templeton’s announcement that he intended to retire. The Search Committee focused on Chief
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Executive Officer succession until January 2016, when it completed its search process with the Board of Director’s
appointment of our new Chief Executive Officer and President, Kirill Tatarinov.
Considerations Governing Director Nominations
Director Qualifications
The Nominating and Corporate Governance Committee of
our Board of Directors is responsible for reviewing with the Board of Directors from time to time the appropriate
qualities, skills and characteristics desired of members of the Board of Directors in the context of the needs of the business and current make-up of our Board of Directors. This assessment
includes consideration of the following minimum qualifications that the Nominating and Corporate Governance Committee believes must be met by all directors:
The Nominating and Corporate Governance Committee also may consider numerous other qualities, skills and characteristics
when evaluating director nominees, such as:
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an understanding of and experience in software, hardware or services, technology, accounting, governance, finance and/or marketing;
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leadership experience with public companies or other major complex organizations;
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experience on another public company board; and
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the specific needs of our Board of Directors and the Committees of our Board of Directors at that time.
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Our Board of Directors believes that a diverse membership with varying perspectives and breadth of experience is an
important attribute of a well-functioning board and will enhance the quality of the Board of Director’s deliberations and decisions. As a result, the Nominating and Corporate Governance Committee will consider the diversity of background and
experience of a director nominee (such as diversity of knowledge, skills, experience and expertise) as well as diversity of personal characteristics (such as diversity of gender, race, ethnicity, culture, thought and geography) among its members in
the overall context of the composition of the Board of Directors. The Nominating and Corporate Governance Committee and the Board of Directors discuss the composition of our Board of Directors, including diversity of background and experience, as
part of the annual Board of Directors evaluation process.
Process for Identifying and Evaluating Director Nominees
Our Board of Directors delegates the selection and nomination process to the Nominating and Corporate Governance Committee, with the expectation that other members of
the Board of Directors, and of management, will be requested to take part in the process as appropriate. Generally, the Nominating and Corporate Governance Committee identifies candidates for director nominees in consultation with management and the
other directors, through the use of search firms or other advisers, through the recommendations submitted by shareholders or through such other methods as the Nominating and Corporate Governance Committee deems to be helpful to identify candidates.
Once candidates have been identified, the Nominating and Corporate Governance Committee confirms that the candidates meet all of the minimum qualifications for director nominees established by the Nominating and Corporate Governance Committee.
The Nominating and Corporate Governance Committee gathers information about the candidates through interviews, detailed questionnaires, comprehensive background checks
or any other means that the Nominating and Corporate Governance Committee deems to be helpful in the evaluation process. The Nominating and Corporate Governance Committee then meets as a group to discuss and evaluate the qualities and skills of each
candidate, both on an individual basis and taking into account the overall composition and needs of our Board of Directors. Based on the results of the evaluation process, the Nominating and Corporate Governance Committee
recommends candidates for the Board of Director’s approval as director nominees for election to our Board of Directors. The Nominating and Corporate Governance Committee also recommends
candidates to the Board of Directors for appointment to the committees of the Board of Directors.
The Executive Chairman assists the Nominating and Corporate
Governance Committee with Board composition and evolution planning, including review of committee memberships.
Board Evaluation Program
Our Board of Directors annually undertakes a formal evaluation process consisting of an overall Board evaluation, committee evaluations, and peer evaluations
by each member. As part of the evaluation process, our Board of Directors assesses its structure, processes, culture and effectiveness. The evaluation process also includes consideration of the appropriate Board size, committee composition and the
functional, business and organizational skills that may be required of future Board members. Also, in 2015, our Board of Directors, with the assistance of an outside adviser, conducted one-on-one open-ended interview discussions to help assess the
Board’s performance.
Procedures for Recommendation of Director Nominees by Shareholders
The Nominating and Corporate Governance Committee will consider director nominee candidates who are recommended by our shareholders. Shareholders, in submitting
recommendations to the Nominating and Corporate Governance Committee for director nominee candidates, shall follow the procedures described below.
Generally, the
Nominating and Corporate Governance Committee must receive any such recommendation for nomination not later than the close of business on the 120th day nor earlier than the close of business on the 150th day prior to the first anniversary of the
date the Proxy Statement was delivered to shareholders in connection with our preceding year’s annual meeting.
All recommendations for nomination must be in
writing and include the following:
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name and address of the shareholder making the recommendation, as they appear on our books and records, and of such record holder’s beneficial owner;
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number of shares of our capital stock that are owned beneficially and held of record by such shareholder and such beneficial owner;
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name of the individual recommended for consideration as a director nominee;
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all other information relating to the recommended candidate that would be required to be disclosed in solicitations of proxies for the election of directors or is otherwise required, in each case pursuant to Regulation
14A under the Securities Exchange Act of 1934, as amended, including the recommended candidate’s written consent to being named in the Proxy Statement as a nominee and to serving as a director if approved by our Board of Directors and elected;
and
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a written statement from the shareholder making the recommendation stating why such recommended candidate meets Citrix’s criteria and would be able to fulfill the duties of a director.
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Nominations must be sent to the attention of our Secretary by one of the two methods listed below:
By U.S. mail (including courier or expedited delivery service) to:
Citrix Systems, Inc.
851 West Cypress Creek
Road
Fort Lauderdale, FL 33309
Attn:
Secretary of Citrix Systems, Inc.
By facsimile to: (954) 229-6209
Attn: Secretary of Citrix Systems, Inc.
Our Secretary will
promptly forward any such nominations to the Nominating and Corporate Governance Committee. As a requirement for being considered for nomination to our Board of Directors, a candidate will need to comply with the following minimum procedural
requirements:
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a candidate must undergo a comprehensive private investigation background check by a qualified firm of our choosing;
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a candidate must complete a detailed questionnaire regarding his or her experience, background and independence;
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a candidate must submit to the Board of Directors his or her written consent to serve as director if elected; and
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a candidate must submit to our Board of Directors a statement to the effect that (1) if elected, he or she will
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tender promptly following his or her election an irrevocable resignation effective upon his or her failure to receive the required vote for re-election at the next meeting at which he or she
would face re-election, and (2) upon acceptance of his or her resignation by our Board of Directors, in accordance with our Corporate Governance Guidelines, he or she shall resign as a member of the Board of Directors.
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Once the Nominating and Corporate Governance Committee receives the nomination of a candidate and the candidate has complied with the minimum procedural requirements
above, such candidacy will be evaluated and a recommendation with respect to such candidate will be delivered to our Board of Directors.
Policy Governing Director Attendance at Annual Meetings of Shareholders
We conduct an annual meeting of shareholders, and all directors are offered the
opportunity to attend at our expense. No members of our Board of Directors attended our annual meeting of shareholders held in 2015.
Code of Ethics
We have adopted a “code of ethics,” as defined by regulations promulgated under the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, which we refer to as our Code of Business Conduct and which applies to all of our directors and employees worldwide, including our principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions. A current copy of our Code of Business Conduct is available in the Corporate Governance section of our website at
http://www.citrix.com/about/governance.html
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A copy of our Code of Business Conduct may also be obtained, free of charge, upon a request directed to: Citrix Systems, Inc., 851 West Cypress Creek Road, Fort
Lauderdale, Florida 33309, Attention: Investor Relations. We intend to disclose any amendment to or waiver of a provision of our Code of Business Conduct, to the extent required by rules and regulations, that applies to our principal executive
officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, by posting such information on our website, available at
http://www.citrix.com/about/governance.html
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For more corporate governance information, you are invited to access the Corporate Governance section of our website
available at
http://www.citrix.com/about/governance.html
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Risk Oversight
Assessing and managing risk is the responsibility of Citrix’s management. Our Board of Directors oversees and reviews certain aspects of our risk management
efforts.
Our Board of Directors is involved in risk oversight through direct decision-making authority with respect to significant matters and the oversight of
management by the Board of Directors and its committees. Among other areas, the Board of Directors is directly involved in overseeing risks related to our overall corporate strategy, including product, go-to-market and sales strategy, executive
officer succession, cybersecurity, business continuity, crisis preparedness and competitive and reputational risks.
The committees of the Board of Directors
execute their oversight responsibility for risk management as follows:
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The Audit Committee has responsibility for overseeing our internal financial and accounting controls, work performed by our independent registered public accounting firm and our internal audit function. As part of its
oversight function, the Audit Committee regularly reviews the policies and processes by which our exposure to certain significant areas of risk is assessed and managed. The Audit Committee also regularly discusses with management and our independent
registered public accounting firm our major financial and controls-related risk exposures and steps that management has taken to monitor and control such exposures. The Audit Committee also oversees cybersecurity risks and reports to the full Board
of Directors on such matters. In addition, we have, under the supervision of the Audit Committee, established procedures available to all employees for the anonymous and confidential submission of complaints relating to any matter to encourage
employees to report questionable activities directly to our senior management and the Audit Committee.
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The Finance Committee is responsible for overseeing risks related to our investments, financing activities, capital allocation strategies and world-wide insurance programs.
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The Compensation Committee is responsible for ensuring that our compensation practices are consistent
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with our overall philosophy and drive the intended outcomes, overseeing risks related to our cash and equity-based compensation programs and practices as well as for evaluating whether our
compensation plans encourage participants to take excessive risks that are reasonably likely to have a material adverse effect on Citrix. For a detailed discussion of our efforts to manage compensation related risks, see
Compensation Related Risk
Assessment
below.
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The Nominating and Corporate Governance Committee is responsible for overseeing risks related to the composition and structure of our Board of Directors and its committees, our corporate governance and certain areas of
regulatory compliance. In this regard, the Nominating and Corporate Governance Committee conducts an annual evaluation of the Board of Directors and its committees, plans for Board member and executive officer succession, reviews transactions
between Citrix and our officers, directors, affiliates of officers and directors, or other related parties for conflicts of interest, and annually reviews our most significant compliance policies and compliance training program. The Nominating and
Corporate Governance Committee also periodically reviews reputational, intellectual property and litigation-related risks with management.
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We
maintain a risk management program to identify, scope, communicate and manage risks across Citrix. As part of this program, our Internal Audit team, acting with executive sponsorship, facilitates a cross-functional engagement process that assesses
and prioritizes risks that we face and monitors certain of our risk management programs. The Audit Committee receives a report concerning our risk management efforts on an annual basis.
Compensation Related Risk Assessment
We believe that our executive officer and employee compensation plans are appropriately structured so as not to incent excessive risk taking and are not reasonably
likely to have a material adverse effect on our business. In particular, the Compensation Committee considered the following aspects of our compensation plans and policies when evaluating these areas:
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Our base salary component of compensation does not encourage risk taking because it is a fixed amount.
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Our Board of Directors annually approves a corporate operating plan with goals that it believes are appropriate
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14
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and reasonable in light of past performance and current market opportunities. Our annual operating plan is the basis for the performance targets in our annual variable cash compensation plans.
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For our executive variable cash compensation plans, awards are based on the achievement of at least two objective performance measures, thus diversifying the risk associated with any single indicator of performance.
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For our variable cash compensation plans, we select performance measures that we believe are less susceptible to manipulation (for example, non-GAAP operating margin) than other performance measures that we could select
(for example, non-GAAP earnings per share).
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We model amounts payable under proposed variable cash compensation plan structures against various scenarios and assess those payouts as a percentage of non-GAAP earnings per share, non-GAAP corporate operating income
and other variables to ensure that our framework appropriately balances pay versus return to shareholders.
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All of our executive and corporate variable cash compensation plans are capped at 200% of target awards so as to prevent award payments in excess of specific returns to the business and our shareholders, even if we
dramatically exceed our performance or financial targets.
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Assuming achievement of a threshold level of performance, payouts under our performance-based plans if target performance metrics are not achieved result in compensation at levels below full target achievement, rather
than an “all-or-nothing” approach, which could engender excessive risk taking.
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We have implemented a market performance-based restricted stock unit program, which has awarded our executive officers with restricted stock units based on the total return to our shareholders over a three-year period
compared to the return on the Nasdaq Composite Total Return Index, thereby providing executive officers with strong incentives to increase shareholder value over the long-term. This program has been capped at 200% of target awards to prevent
excessive compensation even if we dramatically outperform the Index.
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No opportunities for non-qualified deferrals of compensation were offered in 2015 and none will be offered in 2016.
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The Compensation Committee, or in the case of our Executive Chairman and President and Chief Executive Officer, the independent members of our Board of Directors, determine achievement levels under our variable cash
compensation plan and performance-vesting restricted stock unit awards after reviewing the company’s performance.
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Our executive stock ownership policy requires executives to hold significant levels of stock, which aligns an appropriate portion of their personal wealth to our long-term performance.
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Shareholder Outreach And Engagement
Our Board of Directors welcomes the views and insights of our shareholders and has historically conducted an annual outreach effort to connect with large shareholders
in order to ensure open lines of communication. Our leaders regularly engage with shareholders to better understand their perspective on a wide range of issues. Such discussions may address a broad range of topics, including governance issues such
as executive compensation, board composition, and executive succession planning. Shareholders may also wish to discuss business strategy or operational performance. In such discussions, Citrix may be represented by a member of senior management
and/or a member of our Board of Directors. We believe it is important to maintain ongoing conversations outside of the annual meeting process so that we may shape our policies and practices with an informed point of view.
Our Board of Directors provides to every security holder the ability to communicate with the Board of Directors as a whole and with individual directors on the Board
of Directors through an established process for security holder communication as follows:
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For communications directed to our Board of Directors as a whole, shareholders may send such communications to the attention of the Executive Chairman of the Board of Directors by one of the two methods listed below:
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By U.S. mail (including courier or expedited delivery service) to:
Citrix Systems, Inc.
851 West Cypress Creek
Road
Fort Lauderdale, FL 33309
Attn:
Chairperson of the Board of Directors, c/o Secretary
By facsimile to: (954) 229-6209
Attn: Chairperson of the Board of Directors, c/o Secretary
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For shareholder communications directed to an individual director in his or her capacity as a member of our Board of Directors, shareholders may send such communications to the attention of the individual director by
one of the two methods listed below:
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By U.S. mail (including courier or expedited delivery service) to:
Citrix Systems, Inc.
851 West Cypress Creek
Road
Fort Lauderdale, FL 33309
Attn:
Secretary of Citrix Systems, Inc.
By facsimile to: (954) 229-6209
Attn: Secretary of Citrix Systems, Inc.
We will forward any
such security holder communication to the Chairperson of the Board of Directors, as a representative of the Board of Directors, or to the director to whom the communication is addressed, on a periodic basis. We will forward such communications by
certified U.S. mail to an address specified by each director and the Chairperson of the Board of Directors for such purposes or by secure electronic transmission.
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16
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Part 2 Board of Directors
Our Directors
The
following table sets forth our current directors, who are being nominated for re-election at the 2016 Annual Meeting. In April 2016, we announced that Thomas F. Bogan and Francis A. deSouza would not be standing for re-election at the 2016 Annual
Meeting. All nine directors are nominated for re-election to one-year terms at the 2016 Annual Meeting.
The biographical description below for each director
nominee includes the specific experience, qualifications, attributes and skills that led to the conclusion by our Board of Directors that such person should serve as a director of Citrix.
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Name
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Position(s) with Citrix
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Robert M. Calderoni
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Executive Chairman and Director
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Nanci E. Caldwell
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Director
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Jesse A. Cohn
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Director
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Robert D. Daleo
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Director
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Murray J. Demo
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Director
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Peter J. Sacripanti
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Director
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Graham V. Smith
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Director
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Godfrey R. Sullivan
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Lead Independent Director
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Kirill Tatarinov
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Director, President and Chief Executive Officer
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Director Nominees
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Robert M. Calderoni
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Executive Chairman of Citrix; Former Interim Chief Executive Officer and President of Citrix; Former Chairman and Chief Executive Officer of Ariba, Sunnyvale, CA (Software and IT services
company)
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Age
:
56
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Director Since
:
June 2014
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Executive Chairman Since
:
July 2015
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Other Boards
:
Since 2003, Mr. Calderoni has served on the Board of Directors of Juniper Networks,
Inc., a publicly-traded networking company; and since 2007, he has served on the Board of Directors of KLA-Tencor, a publicly-traded semiconductor equipment company.
Key Director Qualifications
:
Mr. Calderoni served as Chairman and Chief Executive Officer of Ariba, Inc., a cloud applications and business
network company, from October 2001 until it was acquired by SAP, a publicly-traded software and IT services company, in October 2012, and then continued as Chief Executive Officer of Ariba following the acquisition until January 2014.
Mr. Calderoni also served as a member of the global managing board at SAP AG between November 2012 and January 2014 and as President SAP Cloud at SAP AG from June 2013 to January 2014. Mr. Calderoni has also held senior finance roles at
Apple and IBM and served as Chief Financial Officer of Avery Dennison Corporation, a publicly-traded packaging and labelling solutions company. From October 2015 to January 2016, Mr. Calderoni served as the Interim Chief Executive Officer and
President of Citrix. Mr. Calderoni was named Executive Chairman of Citrix in July 2015. The Board believes Mr. Calderoni’s qualifications to sit on our Board include his extensive leadership and business development experience as
leader of a publicly-traded software-as-a-service company and his deep financial, accounting, corporate finance and operations expertise, including turnaround situations, gleaned through his experience in managing large scale global enterprises.
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Nanci E. Caldwell
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Former Executive Vice President and Chief Marketing Officer of PeopleSoft, Pleasanton, California (Human resources management software company)
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Age
:
58
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Director Since
:
July 2008
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Committees
:
Compensation (Chair), Nominating and Corporate Governance
|
Other Boards
:
Since December 2015, Ms. Caldwell has served on the Board of Directors of Equinix, Inc., a
publicly traded IT data center company.
Key Director Qualifications
:
Since 2005, Ms. Caldwell has served as a member of a number of
Boards of both public and private technology companies, including Deltek, Inc., a publicly-traded enterprise management software company from 2005 to 2012; Network General, now NetScout Inc., a publicly-traded provider of integrated network
performance management solutions from 2005 to 2007; and Hyperion Solutions Corporation, a publicly-traded provider of performance management software acquired by Oracle in 2007, from 2006 to 2007. From April 2001 until it was acquired by Oracle in
December 2004, Ms. Caldwell served as Executive Vice President and Chief Marketing Officer for PeopleSoft, Inc., a publicly-held human resource management software company. In addition, from June 2009 to December 2014, Ms. Caldwell served
as a member of the Board of Tibco Software Inc., a publicly-traded leading business integration and process management software company. The Board believes Ms. Caldwell’s qualifications to sit on our Board include her extensive experience
with technology and software companies, including in the areas of sales and marketing, as well as her executive leadership and management expertise with publicly-traded companies.
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Jesse A. Cohn
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Senior Portfolio Manager and Head of U.S. Equity Activism, Elliott Management Corporation, New York NY (Hedge fund manager)
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Age
:
35
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Director Since
:
July 2015
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Key Director Qualifications
:
Mr. Cohn is a senior portfolio manager and head of U.S. equity activism at
Elliott Management Corporation, a $27 billion investment firm. Mr. Cohn joined Elliott in 2004 and manages both public and private investments for the firm. Mr. Cohn also serves on the Board of Directors of several private companies.
Mr. Cohn joined the Board in connection with our entry into a cooperation agreement with affiliates of Mr. Cohn’s employer, Elliott Management. The Board believes Mr. Cohn’s qualifications to sit on our Board include the
breadth of his knowledge of technology/software companies, including his service on the boards of directors of MSC Software, E2Open, Mitchell International and Ark Continuity.
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Robert D. Daleo
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Retired Vice Chairman of Thomson Reuters, New York, NY (Integrated information solutions provider)
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Age
:
66
|
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Director Since
:
May 2013
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Committees
:
Audit (Chair), Finance (Chair)
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Other Boards
:
Since August 2006, Mr. Daleo has served on the Board of Directors of Equifax, a publicly-traded
global provider of information solutions and human resources business process outsourcing services.
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18
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Key Director Qualifications
:
Prior to his retirement in December 2012, Mr. Daleo served as Vice
Chairman of Thomson Reuters, a publicly-traded global provider of integrated information solutions to business and professional customers. Mr. Daleo previously served as Executive Vice President and Chief Financial Officer of Thomson Reuters or
its predecessors from 1998 through 2011, and was a member of The Thomson Corporation Board from 2001 to April 2008. Prior to joining The Thomson Corporation, he held various financial and operational leadership positions with The McGraw-Hill
Companies, Inc., a publicly-traded content and analytics provider, and Automatic Data Processing, Inc., a publicly-traded provider of business outsourcing solutions. The Board believes Mr. Daleo’s qualifications to sit on our Board include
his experience in managing a large scale global enterprise, extensive financial accounting, corporate finance, operations and business development expertise through his experience as Chief Financial Officer of a large multinational company, as well
as his Board-level experience with Thomson Reuters and Equifax.
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Murray J. Demo
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Chief Financial Officer of Atlassian Corporation, San Francisco, CA (Software solutions provider for team collaboration and project management); Former Executive Vice President and Chief Financial
Officer of Dolby Laboratories, San Francisco, CA (Entertainment technologies company); Former Executive Vice President and Chief Financial Officer of Adobe Systems, San Jose, CA (Digital marketing and digital media solutions
company)
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Age
:
54
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Director Since
:
February 2005
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Committees
:
Audit, Finance
|
Key Director Qualifications
:
Mr. Demo currently serves as Chief Financial Officer of Atlassian Corporation, a
publicly-traded enterprise software company, since October 2015. Previously, Mr. Demo served as Executive Vice President and Chief Financial Officer of Dolby Laboratories, a publicly-traded global leader in entertainment technologies, from May
2009 until June 2012. Mr. Demo has also served as Executive Vice President and Chief Financial Officer of LiveOps, a privately-held virtual call center company, and as Executive Vice President and Chief Financial Officer of Postini, Inc., a
security software company, which was acquired by Google in September 2007. Mr. Demo also held various executive-level finance roles at Adobe Systems, including Executive Vice President and Chief Financial Officer. Mr. Demo previously
served on the Board of Xoom Corporation, a formerly publicly-traded global online money transfer provider that was acquired by PayPal in November 2015, from May 2012 to November 2015; and from December 2011 to December 2015, Mr. Demo served on
the Board of Directors of Atlassian Corporation. The Board believes Mr. Demo’s qualifications to sit on our Board include his extensive experience with finance and accounting matters for global organizations in the technology industry,
including the experience that he has gained in his roles as Chief Financial Officer of publicly-traded companies.
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Peter J. Sacripanti
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|
Co-Chair and Chairman of the Executive Committee of McDermott Will & Emery, New York, NY (International law firm)
|
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Age
:
60
|
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Director Since
:
December 2015
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Committees
:
Audit, Finance
|
Key Director Qualifications
:
Since September 2010, Mr. Sacripanti has served as the Co-Chair and Chairman of
the Executive Committee of McDermott Will & Emery, an international law firm with 2,000 full time employees in North America, Europe, and Asia. Mr. Sacripanti has served as a Partner at McDermott Will & Emery since 1996 and in
this position, he represents and defends major corporations and industry groups, including Fortune 500 companies. The Board believes Mr. Sacripanti’s qualifications to sit on our Board include his management of an international business
organization and his years of experience representing large corporations on a variety of legal matters.
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Graham V. Smith
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Former Chief Financial Officer and Executive Vice President of Salesforce, San Francisco, CA (Cloud-based computing company)
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Age
:
56
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Director Since
:
December 2015
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Committees
:
Compensation
|
Other Boards
:
Since July 2011, Mr. Smith has served on the Board of Directors of Splunk, a publicly-traded
software company that develops products to enhance searching, monitoring and analyzing machine-generated data. In February 2015, Mr. Smith also became a Director of Xero, a publicly-traded New Zealand, cloud-based software company, and
Mindbody, a publicly-traded cloud-based business management software company focused on the wellness services industry.
Key Director
Qualifications
:
Mr. Smith has served in various management roles for Salesforce, a provider of enterprise cloud computing software, including as Executive Vice President, Finance from 2014 to 2015, Executive Vice President and
Chief Financial Officer from 2008 to 2014, and Executive Vice President and Chief Financial Officer Designate from 2007 to 2008. Mr. Smith brings to the Citrix Board over 25 years’ experience in the software industry. Mr. Smith has
proven himself an accomplished business leader in his capacity as an executive of Salesforce. The Board believes Mr. Smith’s qualifications to sit on our Board include his ability to manage rapidly growing global enterprises at scale and
his financial expertise and professional experience as an executive of other public software companies.
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Godfrey R. Sullivan
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|
Chairman of Splunk, San Francisco, CA (IT and search software company)
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Age
:
62
|
|
|
Director Since
:
February 2005
|
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Committees
:
Compensation, Nominating and Corporate Governance (Chair)
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Other Boards
:
Since 2008, Mr. Sullivan has served on the Board of Directors of Splunk, a publicly-traded
software company that develops products to enhance searching, monitoring, and analyzing machine-generated data, and as its Chairman of the Board since 2011.
Key Director Qualifications
:
Mr. Sullivan also served as President and Chief Executive Officer of Splunk from 2008 until November 2015. Prior
to Splunk, Mr. Sullivan led Hyperion Solutions Corporation, a publicly-traded software company, where he was first its President and Chief Operating Officer and subsequently its President and Chief Executive Officer, until its acquisition by
Oracle in April 2007. Mr. Sullivan also served on the Board of Informatica Corporation, a publicly-traded data integration company, from January 2008 to June 2013. The Board believes Mr. Sullivan’s qualifications to sit on our Board
include his decades of executive and operational experience with technology and software companies.
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Kirill Tatarinov
|
|
|
President, Chief Executive Officer and Director, Citrix; former President, Executive Vice President, and Corporate Vice President of Business Solutions Division at Microsoft Corp.
|
|
|
Age
:
51
|
|
|
Director Since
:
January 2016
|
|
|
|
Key Director Qualifications
:
With over 30 years of industry experience, Mr. Tatarinov previously served as
Executive Vice President of the Microsoft Business Solutions Division (MBS) with responsibility for the Microsoft Dynamics business
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20
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across development, sales, marketing, and operations. Prior to joining MBS in 2007, Mr. Tatarinov led the Management and Solutions Division at Microsoft, where he was in charge of the
Microsoft Windows management technologies and products, including Microsoft System Center, as well as Windows Server solutions. Additionally, Mr. Tatarinov holds two patents for managing computer resources and related technologies. The Board
believes Mr. Tatarinov’s qualifications to sit on our Board include his decades of experience in the software industry and his unique insight into our markets, products, technology and operations through his role as our Chief Executive
Officer.
Meetings and Meeting Attendance
Our Board of Directors met seventeen times during the year ended December 31, 2015. Each of the directors attended
at least 75% of the aggregate of the total
number of meetings of our Board of Directors and the total number of meetings of all committees of our Board of Directors on which he or she served during fiscal 2015.
Our Board Committees
Our Board of Directors has standing Audit, Compensation, Finance and Nominating and Corporate Governance Committees. Each
of the Audit, Compensation, Finance and Nominating and Corporate Governance Committees has a written charter that has
been approved by the Board of Directors. Each committee reviews the appropriateness of its charter at least annually. The table below provides current membership for each Board committee.
In addition to our standing committees, in July 2015, our Board of Directors formed a Search Committee following Mark B.
Templeton’s announcement that he intended to retire. In January 2016, after completing its search process with the appointment of Kirill Tatarinov, the Search Committee was disbanded. Also, in July 2015, our Board of
Directors formed an Operations Committee to work closely with our management team in a comprehensive review of our
operations and capital structure, building upon the company’s previously announced initiatives to drive operating margin expansion through simplification, efficiency and portfolio refinements. In February 2016, the
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22
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Operations Committee was disbanded following completion of its work to drive our operational review.
Audit
Committee
Our Board of Directors has determined that each member of the Audit Committee meets the independence requirements promulgated by Nasdaq and the SEC,
including Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended. In addition, our Board of Directors has determined that each member of the Audit Committee is financially literate and that Messrs. Daleo and Demo each qualify as
an “audit committee financial expert” under the rules of the SEC. The Audit Committee met nine times during the year ended December 31, 2015. The Audit Committee operates under a written charter adopted by our Board of Directors, a
current copy of which is available in the Corporate Governance section of our website at
http://www.citrix.com/about/governance.html
.
As described more
fully in its charter, the Audit Committee oversees our accounting and financial reporting processes, internal controls and audit functions. In fulfilling its role, the Audit Committee:
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•
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reviews the financial reports and related disclosure provided by us to the SEC, our shareholders or the general public;
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•
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reviews our internal financial and accounting controls;
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•
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oversees the appointment, compensation, retention and work performed by any independent registered public accounting firms we engage;
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•
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oversees procedures designed to improve the quality and reliability of the disclosure of our financial condition and results of operations;
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•
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oversees our internal audit function;
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•
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serves as the Qualified Legal Compliance Committee of Citrix in accordance with Section 307 of the Sarbanes-Oxley Act of 2002, and the related rules and regulations promulgated by the SEC;
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•
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recommends, establishes and monitors procedures designed to facilitate (1) the receipt, retention and treatment of complaints relating to accounting, internal accounting controls or auditing matters, and
(2) the receipt of confidential, anonymous submissions by employees of concerns regarding questionable accounting or auditing matters;
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•
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engages advisers as necessary; and
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•
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determines the funding from us that is necessary or appropriate to carry out the Audit Committee’s duties.
|
In addition, our Audit Committee oversees cybersecurity risks and reports to the full Board of Directors on such matters.
Finance Committee
Our Board of Directors has determined that each
member of the Finance Committee meets the independence requirements promulgated by Nasdaq. The members of the Finance Committee also serve on the Audit Committee. The Finance Committee met one time during the year ended December 31, 2015. The
Finance Committee operates under a written charter adopted by our Board of Directors, a current copy of which is available at the Corporate Governance section of our website at
http://www.citrix.com/about/governance.html
.
As described more fully in its charter, the Finance Committee advises the Board of Directors and, in certain instances, acts on behalf of our Board of Directors, on
matters relating to our investment policies, financing activities and world-wide insurance programs.
Compensation Committee
Our Board of Directors has determined that each of the members of the Compensation Committee is independent as defined by the Nasdaq rules. In addition, each member of
the Compensation Committee is an “outside director” as defined in Section 162(m) of the Code, and is a “non-employee” director as defined under Section 16 of the Securities Exchange Act of 1934, as amended. The
Compensation Committee met fifteen times during the year ended December 31, 2015. The Compensation Committee operates under a written charter adopted by our Board of Directors, a current copy of which is available in the Corporate Governance
section of our website at
http://www.citrix.com/about/governance.html
.
As described more fully in its charter, the Compensation Committee is responsible
for determining and making recommendations with respect to all forms of compensation to be granted to our executive officers and preparing an annual report on executive compensation for inclusion in the Proxy Statement for our annual meeting of
shareholders in accordance with applicable rules and regulations.
In fulfilling its role, the Compensation Committee also:
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reviews and makes recommendations to our management on company-wide compensation programs and practices;
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•
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approves the salary, variable cash, equity-based and other compensation arrangements of our executive officers reporting directly to our President and Chief Executive Officer;
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•
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recommends, subject to approval by the entire Board of Directors, the salary, variable cash, equity-based and other compensation arrangements of our Executive Chairman and President and Chief Executive Officer;
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•
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appoints, retains, compensates, terminates and oversees the work of any independent experts, consultants and other advisers, reviews and approves the fees and retention terms for such experts, consultants and other
advisers and considers at least annually the independence of such consultants;
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•
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considers the independence of and potential conflicts of interests with compensation consultants, legal counsel or other advisers, including based on factors required to be considered by the SEC or Nasdaq;
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evaluates director compensation and recommends to the full Board of Directors appropriate levels of director compensation;
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establishes policies and procedures for the grant of equity-based awards and periodically reviews our equity award grant policy;
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recommends, subject to approval by the entire Board of Directors, any equity-based plans and any material amendments to those plans;
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evaluates whether our compensation plans encourage participants to take excessive risks that are reasonably likely to have a material adverse effect on Citrix;
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•
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evaluates our compensation philosophy and reviews actual compensation for consistency with our compensation philosophy;
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•
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reviews and recommends for inclusion in our annual Proxy Statement the Compensation Discussion and Analysis section; and
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•
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reviews and evaluates, on a periodic basis, our stock ownership guidelines for directors and executive officers and recommends any modifications to such guidelines to the Board of Directors for its approval.
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The Compensation Committee has the authority to engage its own outside advisers, including experts in particular areas of compensation, as it
determines appropriate, apart from counsel or advisers hired by management. In 2015, the Compensation Committee retained Radford Consulting, an independent compensation consultant,
which we refer to as Radford, to assist the committee in evaluating the compensation of our executive officers and directors.
Our Corporate Governance Guidelines and the charter of the Compensation Committee provide that any independent compensation consultant, such as Radford, engaged by the
Compensation Committee works for the Compensation Committee, not our management, with respect to executive officer and director compensation matters. Please read the
Compensation Discussion and Analysis
included in this Proxy Statement for
additional information on the role of, and amounts paid to, Radford in the compensation review process.
Nominating and Corporate Governance Committee
Our Board of Directors has determined that each member of the Nominating and Corporate Governance Committee meets the independence requirements promulgated by Nasdaq.
The Nominating and Corporate Governance Committee met ten times during the year ended December 31, 2015. The Nominating and Corporate Governance Committee operates under a written charter adopted by our Board of Directors, a current copy of
which is available at the Corporate Governance section of our website at
http://www.citrix.com/about/governance.html
.
As described more fully in its
charter, the Nominating and Corporate Governance Committee:
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reviews and makes recommendations to our Board of Directors regarding the Board’s composition and structure;
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establishes criteria for membership on the Board of Directors and evaluates corporate policies relating to the recruitment of members of the Board of Directors;
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recommends to our Board of Directors the nominees for election or re-election as directors at our annual meeting of shareholders;
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reviews policies and procedures with respect to transactions between Citrix and our officers, directors, affiliates of officers and directors, or other related parties; and
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•
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establishes, implements and monitors policies and processes regarding principles of corporate governance in order to
assist the Board of Directors in complying with its fiduciary duties to us and our shareholders. As described above in the section entitled
Procedures for
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24
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Recommendation of Director Nominees by Shareholders
, the Nominating and Corporate Governance Committee will consider nominees recommended by shareholders.
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Search Committee
The Search Committee consisted of Messrs. Calderoni
(Chair), Cohn and Sullivan, each of whom served on the Search Committee since its formation. The Search Committee met eleven times during the year ended December 31, 2015. The Committee completed its role and responsibilities in January 2016
upon the appointment of Kirill Tatarinov as our President and Chief Executive Officer and was disbanded.
In fulfilling its role, the Search Committee:
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developed selection criteria, including senior leadership experience, deep expertise in technology and product management, and sophisticated understanding of operations;
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•
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reviewed internal and external candidates;
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•
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conducted due diligence on qualified candidates; and
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•
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reported to the Board of Directors regarding the status of the search for our Chief Executive Officer.
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The Search
Committee retained Heidrick and Struggles, Inc., a leading executive search firm, to assist it with the search for a new Chief Executive Officer for our company.
Operations Committee
The
Operations Committee consisted of Messrs. Calderoni (Chair), Daleo and Cohn, each of whom served on the Operations Committee since its formation. The Operations Committee was formed in July 2015 to work with management on a comprehensive operational
review of our company. The Operations Committee met four times during the year ended December 31, 2015. In February 2016, the Board determined that the Operations Committee was no longer required following completion of its work driving the
operational review, and the Committee was disbanded.
In fulfilling its role, the Operations Committee:
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sought opportunities to improve Citrix’s margins and profitability;
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evaluated the optimal capital structure for Citrix;
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coordinated with representatives of management to identify potential operational efficiencies; and
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weighed benefits and costs of product portfolio rationalization.
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In November 2015, we announced the results of the
review of the Operations Committee, as approved by our Board of Directors, including actions to rationalize our product portfolio, realign and optimize operations and investments, and restructure our workforce. These actions have allowed us to
significantly increase focus on our core enterprise strategy of secure and reliable delivery of applications and data, and consequently build a more efficient, scalable and profitable company.
Director Compensation
2015 Non-employee Director Cash Compensation
It is our policy that our employee-directors do not receive cash compensation for their service as members of our Board of Directors.
The Compensation Committee, with assistance from Radford, oversees director compensation and regularly reviews the appropriateness of our non-employee directors’
compensation. Specifically, in October 2015, Radford prepared a comprehensive benchmarking of our non-employee director cash compensation program against the compensation programs offered by our peer companies and reviewed this benchmarking in
detail with the Compensation Committee. Following that review, our Compensation Committee approved a new non-employee
director cash compensation program that became effective in October 2015.
Under both our prior and current
non-employee director cash compensation program, non-employee members of our Board of Directors receive retainer fees, which are paid in cash in semi-annual installments. Each non-employee Director was entitled to receive the retainers detailed in
the tables below (provided that committee chairpersons were only entitled to receive a retainer as committee chair and were not entitled to the non-chair membership retainer for the committee(s) he or she chairs). In addition, non-employee Directors
were reimbursed for their reasonable out-of-pocket expenses incurred in attending meetings of our Board of Directors or any of its committees that are conducted in person.
The following table summarizes the non-employee
director cash compensation program that was in effect through October 27, 2015:
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Compensation Element
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Annual Cash Compensation
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Annual Board Member Retainer
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$40,000
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Board Chair Retainer
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$75,000
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Committee Chair Retainers
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•
Audit Chair
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$30,000
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•
Compensation Chair
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$20,000
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•
Finance Chair
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None
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•
Nominating and Corporate Governance
Chair
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$10,000
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•
Strategy Chair(1)
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$20,000
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Search Chair
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None
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Committee Member Retainers
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•
Audit
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$20,000
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•
Compensation
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$10,000
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•
Finance
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None
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•
Nominating and Corporate
Governance
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$10,000
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•
Strategy(1)
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$10,000
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•
Operations(2)
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One-time: $20,000
Monthly: $10,000
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•
Search(3)
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$10,000
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(1)
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The Strategy Committee was disbanded in July 2015.
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(2)
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The Operations Committee was disbanded in February 2016 following completion of our operational review.
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(3)
|
The Search Committee was disbanded in January 2016 after completion of our CEO search with the appointment of Kirill Tatarinov as our President and Chief Executive Officer.
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26
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The following table summarizes our current non-employee director cash compensation program, which became effective
October 28, 2015:
Board Retainers
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Compensation Element
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Annual Cash Compensation
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Annual Board Member Retainer
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$60,000
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Annual Retainer for Lead Independent Director
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$35,000 (in addition to Annual Board Member Retainer)
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Committee Retainers
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Committee
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Annual Cash Compensation
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Chair
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|
Member
|
|
Audit Committee
|
|
Annual: $35,000
|
|
Annual: $17,500
|
|
Compensation Committee
|
|
Annual: $30,000
|
|
Annual: $15,000
|
|
Finance
|
|
None
|
|
None
|
|
Nominating and Corporate Governance
|
|
Annual: $15,000
Monthly: $10,000(1)
|
|
Annual: $7,500
Monthly: $10,000(1)
|
|
Operations Committee(2)
|
|
None
|
|
One-time: $20,000
Monthly: $10,000
|
|
Search Committee(3)
|
|
None
|
|
One-time: $10,000
Monthly: $10,000
|
|
(1)
|
Only applicable during periods when the Committee is engaging in a director search to recognize the additional commitment during such periods.
|
|
(2)
|
The Operations Committee was disbanded in February 2016 following completion of our operational review.
|
|
(3)
|
The Search Committee was disbanded in January 2016 following the appointment of Mr. Tatarinov as our new President and Chief Executive Officer.
|
Non-employee Director Equity-based Compensation
Equity Awards to our Non-employee Directors
Also, in October 2015, the Compensation Committee, with assistance from Radford, reviewed the appropriateness of equity awards granted to our non-employee Directors
under the 2014 Equity Incentive Plan (which we refer to as the 2014 Plan). Radford prepared a comprehensive benchmarking of our non-employee Director equity awards against the equity awards offered by our peer companies and reviewed this
benchmarking in detail with the Compensation Committee. As a result of that review, our Compensation Committee modified the awards our Directors are entitled to receive to be value-based, effective October 28, 2015.
Under our prior program, each non-employee Director was eligible to receive an annual grant consisting of 4,000 restricted stock units. As in prior years, these grants
were
made on the first business day of the month following our annual meeting of shareholders and vest in equal monthly installments over a one-year period. Also, under our prior program, newly
appointed non-employee Directors were entitled to receive 10,000 restricted stock units upon his or her initial election to our Board of Directors, which vest in accordance with our standard three-year vesting schedule. New non-employee Directors
are not entitled to receive an annual grant of restricted stock units in the same calendar year in which they receive their initial grant.
Effective
October 28, 2015, each non-employee Director is eligible to receive an annual grant consisting of restricted stock units valued at $250,000 that vest in equal monthly installments over a one-year period. Newly appointed non-employee Directors
are entitled to receive restricted stock units valued at $500,000 upon his or her initial election to our Board of Directors, which vest in accordance with our standard three-year vesting schedule. The number of restricted stock units issued is
calculated based on the closing price per share of our common stock on the date
of grant. New non-employee Directors are not entitled to receive an annual grant of restricted stock units in the same calendar year in which they receive their initial grant.
Outside Directors’ Deferred Compensation Program
We offer our Directors an Outside Directors’ Deferred Compensation Program to defer restricted stock units awarded to them under the 2014 Plan. In advance of an
award and in compliance with the program’s requirements, a non-employee Director may elect to defer the receipt of all of his or her restricted stock units until ninety days after such Director’s separation from service from us or upon a
change in control. Upon the vesting of awards of restricted stock units, any amounts that would otherwise have been paid in shares of common stock are converted to deferred stock units on a one-to-one basis and credited to the Director’s
deferred account. In addition, beginning in January 2016, non-employee Directors may defer the cash portion of their compensation such that if a Director elects to defer cash, the cash will be converted into a number of deferred stock units on the
date that the cash compensation would otherwise be paid. The stock units will be held in the Director’s deferred account until ninety days after such Director’s separation from service from us or upon a change in control.
Director Stock Ownership Guidelines
To further
align the interests of members of our Board of Directors with our shareholders, our Board of Directors adopted stock ownership guidelines for our non-employee
Directors. Pursuant to these guidelines, each non-employee Director is expected to hold at least 8,000 shares of our common stock (which includes vested but deferred restricted stock units) for
so long as he or she is a Director or, in the case of certain shares acquired upon the exercise of a stock option, for nine months after termination of his or her service on our Board of Directors. In addition, if a Director exercises a stock
option, it is expected that such Director would, from such option exercise, maintain ownership of at least a number of shares equal to twenty percent of the net value of the shares acquired (after deducting the exercise price and taxes) if such
Director has not satisfied the shareholding requirement. New Directors are expected to meet the standards set forth in the guidelines within three years after the date of his or her election to our Board of Directors. Current Directors are expected
to meet the guideline requirements within five years after the date of their election to the Board of Directors.
The Compensation Committee, with assistance from
Radford, oversees director compensation and regularly reviews the appropriateness of our non-employee Directors’ compensation. Specifically, in July 2014, Radford prepared a comprehensive benchmarking of our non-employee director compensation
program against the compensation programs offered by our peer companies and reviewed this benchmarking in detail with the Compensation Committee.
|
|
|
|
|
28
|
|
|
The following table sets forth a summary of the compensation earned by, or paid to, our non-employee Directors in 2015:
DIRECTOR COMPENSATION TABLE FOR FISCAL YEAR 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Fees Earned or
Paid in Cash ($)
|
|
|
Stock Awards ($)
(1)(2)
|
|
|
Option
Awards ($)
(1)(3)
|
|
|
Total ($)
|
|
|
Thomas F. Bogan
|
|
|
155,562
|
|
|
|
263,080
|
|
|
|
—
|
|
|
|
418,642
|
|
|
Robert M. Calderoni(4)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Nanci E. Caldwell
|
|
|
110,966
|
|
|
|
263,080
|
|
|
|
—
|
|
|
|
374,046
|
|
|
Jesse A. Cohn(5)
|
|
|
140,548
|
|
|
|
775,500
|
|
|
|
—
|
|
|
|
916,048
|
|
|
Robert D. Daleo
|
|
|
267,185
|
|
|
|
263,080
|
|
|
|
—
|
|
|
|
530,265
|
|
|
Francis A. deSouza
|
|
|
112,014
|
|
|
|
263,080
|
|
|
|
—
|
|
|
|
375,094
|
|
|
Murray J. Demo
|
|
|
130,390
|
|
|
|
263,080
|
|
|
|
—
|
|
|
|
393,470
|
|
|
Peter J. Sacripanti(6)
|
|
|
2,082
|
|
|
|
499,971
|
|
|
|
—
|
|
|
|
502,053
|
|
|
Graham V. Smith(6)
|
|
|
1,972
|
|
|
|
499,971
|
|
|
|
—
|
|
|
|
501,943
|
|
|
Godfrey R. Sullivan
|
|
|
119,616
|
|
|
|
263,080
|
|
|
|
—
|
|
|
|
382,696
|
|
|
Stephen M. Dow(7)
|
|
|
61,000
|
|
|
|
263,080
|
|
|
|
—
|
|
|
|
324,080
|
|
|
Asiff S. Hirji(8)
|
|
|
28,589
|
|
|
|
263,080
|
|
|
|
—
|
|
|
|
291,669
|
|
|
Gary E. Morin(9)
|
|
|
22,247
|
|
|
|
—
|
|
|
|
—
|
|
|
|
22,247
|
|
|
(1)
|
These amounts represent the aggregate grant date fair value of the stock awards in the year in which the grant was made. The assumptions we used for calculating the grant date fair value are set forth in Note 7 to our
consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015, which was filed with the SEC on February 18, 2016. These amounts do not represent the actual amounts paid to or realized by
our Directors for these awards during fiscal year 2015.
|
|
(2)
|
Except where otherwise noted, consists solely of restricted stock units. Prior to October 28, 2015, each continuing non-employee Director was entitled to an annual grant consisting of 4,000 restricted stock units
vesting in equal monthly installments over a one-year period, and each new non-employee Director was entitled to an initial grant of 10,000 restricted stock units vesting over three years with one-third of the units vesting on each of the first,
second, and third anniversaries of the date of the award agreement. As of October 28, 2015, each continuing non-employee Director is entitled to an annual grant consisting of a number of restricted stock units equaling $250,000 in value vesting
in equal monthly installments over a one-year period, and each new non-employee Director is entitled to an initial grant consisting of a number of restricted stock units equaling $500,000 in value vesting over three years with one-third of the units
vesting on each of the first, second, and third anniversaries of the date of the award agreement. Pursuant to our Outside Director’s Deferred Compensation Program, each of Ms. Caldwell and Messrs. Calderoni, Cohn, Daleo, Dow, Sacripanti
and Smith elected to defer his or her 2015 annual restricted stock unit award or initial director grant award. Please see the discussion above under the heading
Outside Directors’ Deferred Compensation Program
for additional details on
our deferral program.
|
|
(3)
|
As of December 31, 2015, there were no shares of our common stock subject to outstanding option awards held by our non-employee Directors.
|
|
(4)
|
Mr. Calderoni’s compensation is included in the Summary Compensation Table beginning on page 69. Mr. Calderoni served as a non-employee Director until he was appointed Executive Chairman on
July 24, 2015, at which time he no longer participated in the non-employee director compensation program.
|
|
(5)
|
Mr. Cohn was elected to the Board of Directors on July 27, 2015, and his fees were pro-rated for his service from July 27, 2015 through December 31, 2015. As a newly elected Director subject to the
non-employee director compensation program that was in effect prior to October 28, 2015, Mr. Cohn received a one-time service-based restricted stock unit grant representing 10,000 shares of our common stock.
|
|
(6)
|
Messrs. Sacripanti and Smith were each elected to the Board of Directors on December 24, 2015, and their respective fees were pro-rated for service from December 24, 2015 through December 31, 2015. As
newly elected Directors subject to the non-employee director compensation program that was in effect as of October 28, 2015, each of Messrs. Sacripanti and Smith received a one-time service-based restricted stock unit grant of a number of
restricted stock units equaling $500,000 in value.
|
|
(7)
|
Mr. Dow’s service on the Board of Directors ended on October 31, 2015, and his fees were prorated for his service from January 1, 2015 through October 31, 2015.
|
|
(8)
|
Mr. Hirji’s service on the Board of Directors ended on July 27, 2015, and his fees were prorated for his service from January 1, 2015 through July 27, 2015.
|
|
(9)
|
Mr. Morin’s service on the Board of Directors ended on May 28, 2015, and his fees were prorated for his service from January 1, 2015 through May 28, 2015.
|
|
|
|
|
|
30
|
|
|
Part 3 Executive Management
Our Management
The
following table sets forth our executive officers and the positions currently held by each such person with Citrix. The biographical descriptions below outline the relevant experience, qualifications, attributes and skills of each executive officer.
|
|
|
|
|
|
|
|
|
Name
|
|
Position
|
|
|
|
Robert M. Calderoni
|
|
Executive Chairman and Director
|
|
|
|
Kirill Tatarinov
|
|
President, Chief Executive Officer and Director
|
|
|
|
William L. Burley
|
|
Corporate Vice President and Acting General Manager, Workspace Services
|
|
|
|
David J. Henshall
|
|
Executive Vice President, Chief Operating Officer and Chief Financial Officer
|
|
|
|
Christopher S. Hylen
|
|
Senior Vice President and General Manager, Mobility Apps
|
|
|
|
Jesse D. Lipson
|
|
Corporate Vice President and General Manager, Cloud Services
|
|
|
|
Timothy A. Minahan
|
|
Senior Vice President and Chief Marketing Officer
|
|
|
|
Klaus Oestermann
|
|
Senior Vice President and General Manager, Delivery Networks
|
|
|
|
Carlos E. Sartorius
|
|
Senior Vice President, Worldwide Sales and Services
|
|
|
|
|
|
|
|
Robert M. Calderoni
|
|
|
Age:
56
|
|
|
Mr. Calderoni has served as our Executive Chairman since July 2015. From October 2015 to January 2016, he also served as our Interim Chief Executive Officer and President. He has been
a member of our Board of Directors since June 2014. Mr. Calderoni served as Chairman and Chief Executive Officer of Ariba, Inc. from October 2001 until it was acquired by SAP in October 2012, and then continued as Chief Executive Officer of Ariba
following the acquisition until January 2014. Mr. Calderoni also served as a member of the global managing board at SAP AG between November 2012 and January 2014 and as President SAP Cloud at SAP AG from June 2013 to January 2014.
Mr. Calderoni has also held senior finance roles at Apple and IBM and served as Chief Financial Officer of Avery Dennison Corporation.
|
|
|
|
|
|
|
|
|
|
|
Kirill Tatarinov
|
|
|
Age:
51
|
|
|
Mr. Tatarinov has served as our President and Chief Executive Officer and member of the Board of Directors since January 2016. Prior to joining Citrix, Mr. Tatarinov served as Executive Vice
President of the Microsoft Business Solutions Division (MBS) with responsibility for the Microsoft Dynamics business across development, sales, marketing and operations. Prior to joining MBS in 2007, Mr. Tatarinov led the Management and Solutions
Division at Microsoft, where he was in charge of the Microsoft Windows management technologies and products, including Microsoft System Center, as well as Windows Server solutions. Additionally, Mr. Tatarinov holds two patents for managing
computer resources and related technologies.
|
|
|
|
|
|
|
|
|
|
William L. Burley
|
|
|
Age:
51
|
|
|
Mr. Burley has served as our Corporate Vice President and Acting General Manager, Workspace Services since December 2015. Mr. Burley has been a member of the Citrix team since 1993. Prior to
serving as Corporate Vice President, Mr. Burley was Vice President and General Manager of our Windows App Delivery team. Mr. Burley has also served as the Vice President of Product Management and General Manager of the XenApp and Cloud App Delivery
teams, as well as Vice President of Americas sales.
|
|
|
|
|
|
|
|
|
|
David J. Henshall
|
|
|
Age:
47
|
|
|
Mr. Henshall has served as our Executive Vice President and Chief Financial Officer beginning in September 2011 and as our Chief Operating Officer beginning in February 2014. Mr. Henshall
was appointed Acting Chief Executive Officer and President during Mark B. Templeton’s temporary leave of absence from October 2013 to February 2014. From January 2006 to September 2011, Mr. Henshall served as our Senior Vice President and
Chief Financial Officer, and from April 2003 to January 2006, he served as our Vice President and Chief Financial Officer.
|
|
|
|
|
|
|
|
|
|
Christopher S. Hylen
|
|
|
Age:
55
|
|
|
Mr. Hylen has served as our Senior Vice President and General Manager, Mobility Apps, since July 2013. Mr. Hylen also has been designated to serve as Chief Executive Officer of the new company
to be formed in the proposed spinoff of our GoTo family of products. Prior to joining Citrix, Mr. Hylen was the Senior Vice President and General Manager of Payment Solutions at Intuit, Inc., a publicly-traded provider of business and financial
management solutions for small businesses, consumers and accounting professionals, from August 2010 to July 2013. Mr. Hylen also served as Intuit’s Vice President, Marketing Small Business Group from April 2010 to August 2010 and its Vice
President Growth, Intuit Payment Solutions from September 2006 to May 2010. Since January 2015, Mr. Hylen has served as a member of the Board of The ADT Corporation, a publicly-traded security and alarm monitoring services
company.
|
|
|
|
|
|
|
Jesse D. Lipson
|
|
|
Age:
38
|
|
|
Mr. Lipson has served as our Corporate Vice President and General Manager, Cloud Services since January 2016. Prior to this appointment, Mr. Lipson served as Vice President and General Manager,
Workflow & Workspace Clouds, from May 2015 to December 2015, as Vice President and General Manager, Documents Cloud from February 2015 to May 2015, and Vice President and General Manager, Data Sharing from October 2011 to February 2015. Mr.
Lipson joined Citrix upon our acquisition of ShareFile, of which Mr. Lipson was the founder and CEO.
|
|
|
|
|
|
32
|
|
|
|
|
|
|
|
|
Timothy A. Minahan
|
|
|
Age:
46
|
|
|
Mr. Minahan has served as our Senior Vice President and Chief Marketing Officer since November 2015. Prior to joining Citrix, Mr. Minahan served as Senior Vice President and Chief
Marketing Officer of SAP, where he led their effort to transition to the Cloud. Before SAP, Mr. Minahan was the Senior Vice President of Business Network Strategy and Global Chief Marketing Officer at Ariba. Mr. Minahan has also served as
Senior Vice President of Marketing at Procuri, Inc. and as Chief Services and Research Officer at Aberdeen Group.
|
|
|
|
|
|
|
Klaus Oestermann
|
|
|
Age:
49
|
|
|
Mr. Oestermann has served as Senior Vice President and General Manager, Delivery Networks since February 2015. Prior to this appointment, Mr. Oestermann served as the Group Vice President
and General Manager of our Networking, Cloud and Service Provider group from January 2010 to February 2015, as Group Vice President and General Manager of the NetScaler and App Networking Product Group from December 2006 to December 2009, and as
Vice President, US West from November 2003 to December 2006.
|
|
|
|
|
|
|
Carlos E. Sartorius
|
|
|
Age:
55
|
|
|
Mr. Sartorius has served as our Senior Vice President, Worldwide Sales and Services since January 2015. Prior to this appointment, Mr. Sartorius served as Managing Director and Vice
President, Sales and Services of our Europe, Middle East and Africa (EMEA) organization from September 2011 to January 2015. Prior to joining Citrix, Mr. Sartorius was Vice President and General Manager, HP Networking at Hewlett-Packard
Company, a publicly-traded hardware, software and IT services company, from November 2009 to September 2011.
|
Our executive officers are elected by the Board of Directors on an annual basis and serve until their successors have been duly elected
and qualified.
Part 4 Executive Compensation
Compensation Discussion and Analysis
Purpose Of Compensation Discussion and Analysis
This Compensation Discussion and Analysis provides comprehensive information about the 2015 compensation for the following executive officers (who we refer to as our
Named Executive Officers):
|
•
|
|
Mark B. Templeton, Former President and Chief Executive Officer
|
|
•
|
|
Robert M. Calderoni, Executive Chairman and Former Interim Chief Executive Officer and President
|
|
•
|
|
David J. Henshall, Executive Vice President, Chief Operating Officer and Chief Financial Officer
|
|
•
|
|
Robson B. Grieve, Former Senior Vice President, Customer Experience & Marketing and Chief Marketing Officer, whose employment with Citrix ended in November 2015
|
|
•
|
|
Christopher S. Hylen, Senior Vice President and General Manager, Mobility Apps
|
|
•
|
|
Klaus Oestermann, Senior Vice President and General Manager, Delivery Networks
|
|
•
|
|
T. Geir Ramleth, Former Chief Strategy Officer, Senior Vice President and General Manager, Workspace Services, whose employment with Citrix ended in December 2015
|
|
•
|
|
Carlos E. Sartorius, Senior Vice President, Worldwide Sales and Services
|
NAVIGATING THE COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
|
|
|
|
|
Page
|
|
|
2015 Highlights
|
|
|
34
|
|
|
Objectives and Elements of Our Compensation Programs
|
|
|
40
|
|
|
How Executive Pay Decisions are Made
|
|
|
43
|
|
|
Components of Compensation
|
|
|
48
|
|
|
Individual Executive Compensation Decisions
|
|
|
57
|
|
|
Other Compensation Policies and Information
|
|
|
67
|
|
2015 Highlights
Our
Business
Our vision is to power a world where people, organizations and things are securely connected and accessible to make
the extraordinary possible. A world where people can easily collaborate across boundaries of time, place and device across the world’s best integrated technology services for secure delivery
of apps and data anytime, anywhere.
2015: A Year of Strategic and Leadership Transformation
Operating performance in 2013 and 2014 lagged our expectations as strategies for driving growth did not deliver as intended. Our efforts to reduce operating
expenses accelerated in late 2014. After the first quarter of 2015, however, it became clear that a deeper review of our business was need to focus on what is most important to our shareholders, customers and partners.
In June 2015, when our Board of Directors was preparing for a product portfolio and operational review, we received an open letter from Elliott Management, or Elliott,
one of our largest shareholders, requesting a meeting with our Board and advocating for a new operating plan that called for the implementation of operational best practices, product portfolio rationalization, strategic evaluation of our high-value
non-core businesses and review of our capital allocation. As we do with all investors who engage with us in good faith, our Board responded in a spirit of open communication and transparency. In fact, we agreed with substantial portions of
Elliott’s plan.
In July 2015, we entered into a cooperation agreement with Elliott and agreed to appoint Jesse A. Cohn, Elliott’s head of U.S. equity
activism, to our Board. As an outcome of our engagement with Elliott.
|
•
|
|
Our Board accelerated our operational review by forming an Operations Committee to work with management on a comprehensive operational review with increased focus and speed. The Operations Committee was charged with
identifying opportunities to improve our operational efficiency and capital structure and to streamline our product portfolio.
|
|
•
|
|
Robert M. Calderoni, an independent member of our Board, was appointed Executive Chairman and Chair of the Operations Committee to lead this important work.
|
|
|
|
|
|
34
|
|
|
|
•
|
|
Supported by independent advisers, we initiated a review of strategic alternatives for our GoTo family of products.
|
For further details regarding our agreement with Elliott, see
Cooperation Agreement with Elliott
, on page 86 below.
To support the implementation of these opportunities, we implemented an executive incentive program to recognize certain of our executive officers and other key
employees who play a critical role in furthering these initiatives and maintaining the commitment and engagement of our employees, partners and customers during this process. For further information on these awards see
Equity-Based Long-term
Incentives
beginning on page 52.
In November 2015, based on the findings of the Operations Committee, we took actions to rationalize our product portfolio,
realign and optimize operations and investments, and restructure our workforce. These actions have allowed us to significantly increase focus on our core enterprise strategy of secure and reliable delivery of applications and data, and consequently
build a more efficient, scalable and profitable company. Our actions to date have included:
|
•
|
|
The announcement of a proposed spinoff of our GoTo family of products into a separate public company. We believe the separation of this business to be in the best interest of all stakeholders, allowing both
companies to enhance their strategic focus and respective competitive positions, while permitting us to improve operational efficiency.
|
|
•
|
|
The implementation of a restructuring program that focused on the simplification of our enterprise go-to-market motion and roles while improving coverage, changes in our product focus, and the balancing of resources
with demand across our marketing, general and administrative areas. As a result of this program, we eliminated approximately 700 full-time positions, or approximately 7% of our workforce.
|
Reshaping our Executive Leadership Team and Board for the Future
Executing on these initiatives has required leadership changes.
CEO Transition
As an outcome of reaching an accord with Elliott, in July 2015, Mark B. Templeton agreed to step down from his role as Chief Executive Officer and President, a role he
held for more than 14 years, and announced his intent to retire. During Mark’s tenure with the Company, Citrix grew from a one-product $15 million business to a global market leader with revenues of over $3 billion.
In preparation for Mr. Templeton’s retirement, our Board commenced a search process to identify our next Chief Executive Officer. During the second half of 2015,
however, Mr. Templeton continued to play a critical role in, among other things, retaining and leading our management team, preserving our operational capacity, preserving the Citrix Culture and the commitment and engagement of our employees,
partners and customers, and facilitating a smooth transition to his successor during a critical transition period for Citrix. Without the support of Mr. Templeton during this transition period, our Board’s ability to drive crucial
strategic changes would have been jeopardized. To encourage Mr. Templeton to remain employed with us until his successor was appointed during a period of critical changes at Citrix for the benefit of all stakeholders our Board and Compensation
Committee began negotiations with Mr. Templeton to mutually agree on a retention bonus and benefits arrangements.
Following an extensive candidate search and
interview process, in October 2015, our CEO search was still ongoing due to the unpredictable nature of CEO searches. Simultaneously, the work of the Operations Committee had proceeded, and it became clear that a number of senior leaders would be
leaving the company. These developments triggered the Board and Mr. Templeton to agree that it was appropriate for him to retire, although a permanent successor CEO had not yet been identified. No internal candidates had the combination of
operational leadership and deep product management experience, skills and experience our Board viewed as critical for a new CEO. In light of the need to establish stable leadership for our employees, clients and other stakeholders until a new CEO
could be identified and appointed, our Board appointed Mr. Calderoni to serve as our Interim Chief Executive Officer.
As our Interim Chief Executive Officer,
Mr. Calderoni was charged with leading the execution of our strategic and operational initiatives while our Board of Directors continued the search for our next Chief Executive Officer.
Our Board viewed Mr. Calderoni’s appointment as our Interim Chief Executive Officer in October 2015 as critical to executing on the actions needed to increase our profitability by bringing
Citrix in line with comparable companies, all in order to create significant shareholder value. His role as Executive Chairman had provided Mr. Calderoni with a deep dive into the operations of the company, while his past experience leading a
technology company through a turnaround gave him experience with leading through change. Importantly, the operational skills Mr. Calderoni brought to the Citrix leadership team, as well as the progress made in the operational review, permitted the
Board to re-set the CEO search by prioritizing CEO candidates with deep product development experience, a necessary skill to drive long-term growth.
The
disinterested members of our Board, including Mr. Cohn, the representative from Elliott Management on our Board, unanimously approved Mr. Templeton’s and Mr. Calderoni’s compensation arrangements, upon the recommendation of the
Compensation Committee. See
Individual Executive Compensation Decisions – Chief Executive Officer Compensation
beginning on page 57 for a discussion of Mr. Templeton’s and Mr. Calderoni’s compensation arrangements.
As previously mentioned, our CEO search focused on identifying leaders that have demonstrated both strong product
management and operational leadership skills. Kirill Tatarinov, who most recently served as Executive Vice President of the Microsoft Business Solutions Division has a proven track record of growing businesses and driving operational
performance. Because of these demonstrated skills, in January 2016, our Board identified Mr. Tatarinov as the best person to lead our company for the long-term and to execute on the strategic initiatives that we started in 2015. He was appointed
President and Chief Executive Officer in January 2016 and joined our Board as a director at that time.
Mr. Calderoni continues in his role as Executive Chairman
of our Board. While the roles of President and Chief Executive Officer and Executive Chairman have distinct responsibilities as detailed in the chart below, both Messrs. Calderoni and Tatarinov are focused on driving execution of our
strategic plan, including operational and capital structure efficiency and portfolio simplification. See
Individual Executive Compensation Decisions – Chief Executive Officer Compensation
beginning on page 57 for a discussion of Mr.
Tatarinov’s compensation arrangements.
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Responsibilities of Executive Chairman
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Responsibilities of President and
Chief Executive Officer
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Drives development of our strategic plan to improve
Citrix’s margins, profitability and capital structure, including 2015 operational review and review of
strategic alternatives for GoTo family of products
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Sets agenda for and chairs Board meetings
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Coordinates with chairs of Board committees
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Assists Nominating and Corporate Governance Committee with
the Board’s annual evaluation and self-assessment
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Assists Nominating and Corporate Governance Committee with
Board composition and evolution planning, including review of committee memberships
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Drives execution of our strategic plan to improve Citrix’s margins, profitability and capital structure
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Develops and drives our product and innovation strategy
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Oversees all corporate functions and go-to-market
activities
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Oversees the attainment of our strategic, operational and
financial goals and strategic and operational planning
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Sets strategic imperatives and priorities of the
organization
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Chief spokesperson to our employees, customers, partners and
shareholders
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New Senior Leaders Appointed Across the Business Build a Strong Bench for the Future
Our strategic initiatives also necessitated a review of our senior leadership team and we experienced transition in all senior leadership roles, except our Chief
Operating Officer and Chief Financial Officer. This leadership transition resulted in the following appointments:
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Carlos E. Sartorius as Senior Vice President, Worldwide Sales and Services;
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Klaus Oestermann as Senior Vice President and General Manager, Delivery Networks;
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Timothy A. Minahan as Senior Vice President and Chief Marketing Officer;
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William L. Burley as Corporate Vice President and Acting General Manager, Workspace Services; and
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Jesse D. Lipson as Corporate Vice President and General Manager, Cloud Services.
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These executive officers bring proven
track records, leadership talent and global experience to operationalize, execute and drive our strategy.
Significant Board Refreshment
In addition to Mr. Templeton’s departure, two of our independent directors, Stephen Dow and Asiff Hirji, stepped down from the Board in 2015. In April 2016, we
announced that Thomas F. Bogan and Francis A. deSouza would not be standing for re-election at the 2016 Annual Meeting.
We also added two new directors in
connection with our July 2015 cooperation agreement with affiliates of Elliott Management, or Elliott, a significant investor in our company. Pursuant to this agreement, we agreed to appoint Jesse A. Cohn, Elliott’s head of U.S. equity
activism,
to our Board of Directors. We also collaborated with Elliott to identify an additional mutually agreeable director for appointment to our Board of Directors. In December 2015, Graham V. Smith,
the former Executive Vice President and Chief Financial Officer of Salesforce, joined our Board consistent with this agreement. For further details regarding the agreement, see
Cooperation Agreement with Elliott
, on page 86 below. We also
added Peter J. Sacripanti, Co-Chair and Partner at McDermott, Will & Emery, to our Board of Directors in December 2015.
Our Board of Directors continues to
focus on its evolution and on recruiting capable and diverse directors who have the skills and experience necessary to oversee Citrix over the long-term.
Compensation Committee Changes in 2015
In March 2015, Gary Morin
stepped down from his role as Chair of the Compensation Committee, and Murray J. Demo was appointed Chair of the Compensation Committee. Also in March 2015, Thomas F. Bogan stepped off the Compensation Committee, and Godfrey R. Sullivan was
appointed as a member of the Compensation Committee. In November 2015, Mr. Demo stepped down from his role as Chair of the Compensation Committee, and Nanci E. Caldwell was appointed Chair of the Compensation Committee. Graham V. Smith was appointed
as a member of the Compensation Committee in December 2015 when he joined the Board.
2015 Business Highlights
Our initial progress with respect to our strategic and operational initiatives led to the following financial performance in 2015:
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4% increase in annual revenue to $3.28 billion
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27% increase in net income to $319 million, or $1.99 per diluted share
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22% increase in cash flow from operations to $1.03 billion
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Our balance sheet is robust, including $1.66 billion in deferred revenue and $1.76 billion in net cash and
investments as of December 31, 2015. In 2015, we also continued to return capital to shareholders. For the full year 2015, we repurchased over 11 million shares of our common stock, representing approximately 7% of shares outstanding.
As illustrated in the graph below, our total shareholder return, or TSR, over the five-year period ended on December 31, 2015 was approximately 11%.
Our TSR over the one-year period ended on December 31, 2015, however, was approximately 19%, relative to a TSR of approximately
6% for the Nasdaq Index during the same period, outperforming nearly 80% of the index constituents and creating nearly $2 billion of equity value in 2015.
Comparing our performance over 2014 and 2015 against the Nasdaq 100, at the end of 2015, we were in the top quartile of Nasdaq 100
companies as compared to the end of 2014 when we were in the bottom quartile of Nasdaq 100 companies. We attribute our top quartile performance in 2015 to the strategic and operational initiatives implemented in the second half of 2015, which
included an improvement of over 300 basis points in non-GAAP operating margin over 2014.
Continuing this momentum and reflecting our progress on our strategic and operational initiatives, we achieved the following
financial performance during the first quarter of 2016:
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9% increase in quarterly revenue to $826 million
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Over 900 basis point improvement in non-GAAP operating margin over the year-ago period
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16% increase in cash flow from operations to $340 million, a quarterly record
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Managing Compensation in a Time of Change
As an outcome of reaching an agreement with Elliot, in July 2015, Mr. Templeton agreed to step down as our Chief Executive Officer and announced his intent to retire.
As a result, the Board took swift but thoughtful action in implementing a CEO succession plan, and making appropriate compensation decisions accordingly.
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Board
Considerations
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• In July 2015, Board
reaches agreement with Elliot
• Mr. Templeton
agrees to step down as CEO, a role he held for more than 14 years, and announces his intent to retire
• Board sees need to retain Mr. Templeton for an interim period to maintain leadership and cultural continuity
during the Operations Committee’s review of the business
• Board negotiated a compensation arrangement intended to retain Mr. Templeton until a new permanent CEO could be
identified
• Without the support of
Mr. Templeton during this transition period, our Board’s ability to drive crucial changes would have been jeopardized
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• The Board established
the role of Executive Chairman to lead the new Operations Committee and the Search Committee
• The role was intended to address immediate operational challenges and the turnaround needs of the business
• The Board anticipated that the role would be
more time consuming than a typical Board seat and would involve more direct management of the business, but was uncertain of the time commitment required
• Board projected that the role would be required for approximately 18 months
• Mr. Calderoni was the ideal candidate for
the role given his success in implementing a turnaround at Ariba
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• In October 2015,
minimizing disruption was critical to executing on the actions needed to increase our profitability
• Mr. Calderoni was the best candidate for appointment as Interim CEO because his role as Executive Chairman had
rapidly morphed into a full-time role with deep involvement in managing the business
• The role of Interim CEO represented a meaningful expansion of day-to-day management responsibility from the role of
Executive Chairman
• Mr. Calderoni had
already been granted equity awards as part of his Executive Chairman role and any additional compensation would need to be considered in terms of the combined value of the awards
• Interim CEO might need to serve in the function
for 12 months or more
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• Mr. Tatarinov was identified and hired more quickly than expected following Mr. Calderoni’s
appointment as Interim CEO
• Mr. Tatarinov’s senior leadership role at Microsoft and his mix of operational and product development
expertise made him a competitive hire and the right long- term hire for Citrix
• The Board needed to design a compensation package that would provide the correct incentives to continue to lead
Citrix through a time of significant change and draw Mr. Tatarinov away from competing opportunities
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Compensation
Decisions
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• Retention Agreement
provided for a retention bonus, accelerated vesting of all of Mr. Templeton’s service-based awards, transfer of Citrix-owned whole life insurance policies, certain additional insurance, and health benefits
• Performance-based awards were not accelerated
and were forfeited upon Mr. Templeton’s retirement
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• $1 million annual
base salary
• 23,826 performance-based awards
that vest based on achievement of a Board identified non-GAAP operating margin metric for 2016
• 23,826 performance-based awards that vest based on achievement of a total shareholder return metric as of
January 31, 2017
• 95,303 service-based
awards that vest monthly over an 18-month period
• No additional equity awards will be made to Mr. Calderoni in 2016
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• Annual base pay
remained unchanged
• Integrated
Mr. Calderoni into the 2015 Variable Cash Incentive Plan with his participation pro-rated to the date he became Executive Chairman and ending on the date a permanent CEO is appointed; value of variable cash award was targeted at the 25th
percentile of our executive compensation peer group (125% of annual base pay)
• Awarded 102,851 service-based restricted shares vesting in 12 monthly installments
• Did not receive any new equity awards in 2016
refresh cycle
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• $1
million annual base salary (market median)
• 2016 variable cash award was targeted at the 25th percentile of our executive compensation peer group (125% of annual
base pay)
• Awarded 118,588 service-based
restricted shares vesting over a 3 year period in 12 quarterly installments
• Awarded 220,235 performance-based restricted shares vesting based on compounded annualized
3-year
total shareholder return
• Aggregate equity award value was set at a level three times the annual median of our executive compensation peer
group consistent with market practice for CEO new hires
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Unanimous Board Approval:
The disinterested members of our Board, including Jesse A. Cohn, the representative from
Elliott Management on our Board, unanimously approved Mr. Templeton’s and Mr. Calderoni’s compensation arrangements, upon the recommendation of the Compensation Committee. See
Individual Executive Compensation Decisions –
Chief Executive Officer
Compensation
beginning on page 57 for a discussion of Mr. Templeton’s and Mr. Calderoni’s compensation arrangements.
Objectives and Elements of Our Executive Compensation Programs
The compensation that we offer our executive officers is designed to reflect our principles of integrity, fairness and transparency – concepts that have
continually underscored the design and delivery of the compensation opportunity at Citrix. We believe our compensation programs should emphasize sustainable corporate growth through a pay-for-performance orientation and a commitment to both
operational and organizational execution. We also believe that lavish perquisites, excessive severance and bonuses unrelated to performance or a business purpose focused
on preserving value for our shareholders are inconsistent with our executive compensation principles. Furthermore, while the establishment of variable cash compensation targets for our executive
officers necessarily involves judgment, the actual payouts against those targets are based on pre-determined, objective financial criteria reflective of our annual operating plan or total shareholder return and indicative of positive business
growth.
For more than a decade, the objectives of our executive compensation programs have been to:
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provide competitive compensation that attracts, retains and engages high-performing talent; and
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align the long-term interests of executive officers with those of our shareholders by linking a significant portion of total cash and equity compensation to company performance.
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These objectives still hold true today and guided us through the compensation decisions we made in 2015 in a fast-changing and unusual environment.
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Highlights of Our Compensation
Approach
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Approach
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Implementation
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Link senior executives’ annual target compensation directly with company performance
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In 2015, former CEO’s total target compensation
(excluding retention and retirement benefits) was 50% variable cash compensation and market performance-based RSUs
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Approximately 45% of the target compensation of our other
Named Executive Officers, on average, was performance-based (excluding our Executive Chairman, Interim Chief Executive Officer and President)
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Current President and Chief Executive Officer’s, Kirill
Tatarinov’s, initial total target direct compensation, is 57% performance-based compensation
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Payout opportunity levels for executive variable cash compensation should
motivate performance that meets or exceeds our financial plan objectives
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In 2015, each executive officer’s variable cash compensation plan award was based 100% on the achievement of objective financial operating targets consistent with our annual operating
plan
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Based on 2015 company performance, variable cash
compensation plan awards for 2015 paid 118.4% of the target amount
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Over the past eight years, our variable cash compensation
plan awards have paid out between 56.4% and 130.4% and paid above 100% only three times
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Our shareholders seek
long-term total shareholder return, and our executives should share that goal
This link to
performance has proven effective
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At least 50% of annual equity awards to executive officers are awarded as market performance-based RSUs that vest based on a relative total shareholder return metric
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To account for the speed of the business environment within the software
sector, our compensation decisions should be flexible so that it can be tailored to the specific challenges facing the company at a given time
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To support our strategic and operational initiatives, we implemented an incentive program in 2015 for certain executive officers to recognize the critical role they play in executing upon
these initiatives and maintaining the commitment and engagement of our employees, partners and customers during this process
•
Accordingly, in September 2015, we entered into incentive
agreements with certain of our executive officers that provided for a retention equity grant and severance benefits
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Further, we engage in the following practices to ensure our executive compensation program achieves our objectives and is
aligned with shareholders’ interests.
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What We
Do
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What We Don’t Do
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Benchmark peers aligned with Citrix’s business and those with whom we regularly compete for
executive, managerial and technical talent
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No discretion applied to
measuring performance under our Variable Cash Compensation Plan or market performance-based awards, and no bonuses or awards to make-up for forfeited awards
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ü
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Use equity for long-term incentive and retention
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No re-pricing of stock
options
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ü
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Design compensation programs to align at least
50% of Chief Executive Officer’s annual target compensation with company performance
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No guaranteed bonuses
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Conduct annual executive officer evaluations and
self-evaluation process
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No hedging, short selling or pledging of equity awards
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ü
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Require that executive officers trade in Citrix
stock only pursuant to a Rule 10b5-1 trading plan
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No single-trigger or modified
single-trigger change in control severance agreements
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ü
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Require significant share ownership by executive
officers
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No perquisites
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The elements of compensation that we use to accomplish our objectives include:
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variable cash compensation;
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equity-based long-term incentives; and
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We considered each of these items in determining the individual compensation packages for our executive
officers.
Link of Pay to Performance Proven Effective: Performance-Based Equity Awards Only Deliver on Results
The performance period for the market performance-based restricted stock units granted in 2013, the second year we granted awards having these performance metrics,
ended on December 31, 2015. During the three-year performance period for these awards, the Nasdaq Composite Index significantly exceeded our own returns. Based on this comparative performance, no shares vested under these awards, the second
consecutive year of no vesting under this program. This significantly impacts our executive officers’ realizable compensation.
For example, the average
realizable equity compensation of our named executive officers, listed in our 2014 Proxy Statement (the year we reported the market performance-based restricted stock units granted in 2013), was only 57% of the overall value of the 2013 stock awards
granted to such named executive officers, and only 64% of the
average 2013 total compensation originally reported. We did not grant discretionary bonuses or awards or make any compensation adjustments to compensate for the awards that failed to vest.
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Values are calculated using the aggregate grant date fair value of restricted stock unit awards in 2013, the year in which the grant was made, and are as reported in the Summary Compensation Table in our 2014 Proxy
Statement. The values include service-based and market performance-based restricted stock unit awards. The assumptions we used for calculating the grant date fair value are set forth in Note 7 to our consolidated financial statements included in our
Annual Report on Form 10-K for the year ended December 31, 2013, which was filed with the SEC on February 20, 2014. In the case of market performance-based restricted stock units, the fair value reported in the Summary Compensation Table
in our 2014 Proxy Statement was the probable outcome, which was 100% target achievement. No shares vested under these market performance-based awards; and as a result, no value is realizable for these awards.
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2015 Executive Incentive Program
During 2015, we launched a number of initiatives, which included the search for a new Chief Executive Officer. To support these initiatives, we implemented an executive
incentive program to recognize certain of our executive officers and other key employees who play a critical role in furthering these initiatives and maintaining the commitment and engagement of our employees, partners and customers during this
process. As part of this program, in September 2015, we entered into incentive agreements with certain of our executive officers that provide for severance benefits if the executive officer’s employment is terminated by the company without
“cause” or by the executive officer for “good reason” prior to the later of December 31, 2016 or the first anniversary of the start date of our new Chief Executive Officer. Also pursuant to the incentive agreements, to support
the continuity and stability of our management team during this period of business transition, these executive officers were awarded special, one-time, equity grants consisting of service-based restricted stock units, 50% of which vested on
April 1, 2016 and 50% of which will vest on October 1, 2016, provided that the executive officer remains employed by us in a full-time capacity through such date, and performance-based restricted stock units that are tied to the achievement of
company non-GAAP operating margin in fiscal year 2016. These special, one-time, equity grants were half performance-based and half service-based. Consistent with the way we calculate and publicly report our financial results, the non-GAAP
operating margin target for these awards is adjusted to exclude certain GAAP measurements, including amortization of intangible assets primarily related to business combinations, non-cash charges associated with the expensing of equity-based
compensation, non-cash charges relating to amortization of debt discount, accruals related to patent litigation, charges related to our restructuring programs, the tax effects related to these items and any other items adjusted from our GAAP results
in our reported earnings.
How Executive Pay Decisions Are Made
Compensation Process and Criteria
Evaluation Process
The compensation packages for our executive
officers are reviewed by our Compensation Committee and include an analysis of all elements of compensation separately and in the aggregate. In 2015, Radford was retained by the Compensation Committee as its independent adviser to
assist with its oversight of executive compensation. In addition, our legal, finance and human resources departments support the Compensation Committee in its work and act in accordance with the
direction given to them to administer our compensation programs.
Throughout 2015, the Compensation Committee held meetings with management, our human resources
department and representatives of Radford to:
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review our compensation objectives;
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evaluate and develop our executive compensation peer group;
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review the actual compensation of our executive officers and compensation packages for new executive officers for consistency with our objectives;
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analyze trends in executive compensation;
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assess our variable cash compensation structure, as well as the plan components and mechanics, to ensure an appropriate correlation between pay and performance with resulting compensation opportunities that balance
returns to the business and our shareholders (this included, among other things, modeling amounts payable under proposed plan structures against various scenarios, and assessing those payouts as a percentage of non-GAAP corporate operating income
and other variables);
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assess our equity-based awards programs against our objectives of executive engagement, retention and alignment with shareholder interests;
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benchmark our executive cash compensation and equity-based awards programs, and assess our pay versus performance against our peer group;
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review recommendations for 2015 compensation for appropriateness relative to our compensation objectives; and
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review retention and incentive programs for our executive officers to support our strategic and operational initiatives.
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Beginning in August 2014, and at several meetings throughout the first quarter of 2015, the Compensation Committee reviewed proposed compensation programs and packages
for our executive officers for 2015, which were prepared by management and evaluated by our finance department for alignment with our operating plan. In February 2015, the Compensation Committee approved the proposed 2015 variable cash compensation
plan, which we refer to as the Variable Cash Compensation Plan, and
recommended to the Board of Directors a compensation package for our President and Chief Executive Officer. In March 2015, the Compensation Committee approved individual compensation packages for
our other executive officers. In each case, the determinations of the Compensation Committee were reviewed with our Board of Directors.
Also, in connection with
our significant strategic and operational initiatives in 2015, including the search for a new Chief Executive Officer, the Compensation Committee considered the retention and engagement of Mr. Templeton during such search and the key role that
our other executive officers and key employees would play in furthering these initiatives and maintaining the commitment and engagement of our employees, partners and customers. The Compensation Committee reviewed in detail proposed retention
and incentive programs for these employees, as well as the proposed compensation packages for Mr. Calderoni in his roles as Executive Chairman and Interim Chief Executive Officer and President. See
Individual Executive Compensation
Decisions
beginning on page 57.
In evaluating our 2015 executive compensation program, the Compensation Committee considered a number of factors as discussed
above, including the shareholder advisory (“say-on-pay”) vote on our executive compensation for 2014, which was approved by over approximately 96% of the votes cast. We will hold a say-on-pay vote on an annual basis until the next vote on
the frequency of such shareholder advisory votes, which will occur no later than our 2017 Annual Meeting of Shareholders.
Evaluation Criteria
In determining the amount and mix of the target compensation elements, the Compensation Committee relies upon its judgment about the scope and strategic
impact of each individual executive officer’s role. In setting final compensation targets for our executive officers in 2015, the Compensation Committee considered many factors, including:
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the performance and experience of each individual;
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the scope and strategic impact of the executive officer’s responsibilities;
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our past business and financial performance and future expectations;
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our long-term goals and strategies;
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difficulty in, and the cost of, replacing high performing leaders with in-demand skills;
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past compensation levels of each individual and of our executive officers as a group;
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relative levels of compensation among our executive officers;
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the amount of each compensation component in the context of the executive officer’s total compensation and other benefits;
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for each executive officer, other than our Executive Chairman and President and Chief Executive Officer, the evaluation and recommendation of our President and Chief Executive Officer and each executive officer’s
self-evaluation;
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for our President and Chief Executive Officer, the evaluation of our Board of Directors, evaluations of our President and Chief Executive Officer by his direct reports and his self-evaluation; and
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the competitiveness of the compensation packages relative to the selected benchmarks as highlighted by the independent compensation consultant’s analysis.
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Role of the Independent Compensation Consultant
During 2015, Radford reported directly to the Compensation Committee for purposes of advising the Committee on executive compensation matters. The Compensation
Committee provided Radford with preliminary instructions regarding the goals of our compensation program and the parameters of the competitive review of executive officer total direct compensation packages to be conducted by Radford. Radford was
instructed to review and provide guidance on our peer group development. Radford was then instructed to benchmark all components of compensation for all executive officer positions, including base salary, total target compensation (base salary plus
variable cash compensation) and equity-based long-term incentive awards. The Compensation Committee also instructed Radford to review the public disclosure by our peer companies concerning their executive compensation practices and to review our
internal compensation model and guidelines and compare them to our peer companies and to our actual compensation practices.
Throughout the fourth quarter of 2014
and the first quarter of 2015, Radford attended meetings of the Compensation Committee, both with and without
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members of management present, and interacted with members of our human resources department with respect to its assessment of the compensation packages of our executive officers. Once Radford,
working in conjunction with our human resources department, completed its preliminary analysis of our executive officer compensation, their analysis was presented to the Compensation Committee, which was discussed at the Compensation
Committee’s February and March 2015 meetings.
Similarly, the Compensation Committee provided Radford with instructions regarding compensation packages for
new executive officers in 2015, as well as retention and incentive programs to support our strategic and operational initiatives. Radford was instructed to benchmark the relevant compensation components for these items and also advise the
Compensation Committee on market practices in similar circumstances. Radford attended meetings of the Compensation Committee, both with and without members of management present, and interacted with members of our human resources department
with respect to these items.
Independence of Compensation Consultant
During 2015, our accounting department engaged Aon Hewitt, an affiliate of Aon, Radford’s parent company, as a resource to assist us in determining the fair value
of our
market performance-based awards. Additionally, our treasury department retained Aon to serve as our broker of record for our world-wide insurance lines. Finally, our human resources department
purchased commercially available compensation survey reports and a data application from Radford. The services purchased from Aon in 2015 were reviewed and approved by the Audit Committee of our Board of Directors. In total, fees paid to Aon during
2015 for services not related to Radford’s work with our Compensation Committee were approximately $452,375. Fees paid to Radford during 2015 for services related to recommending the amount and form of executive and director compensation were
approximately $82,000.
In assessing Radford’s independence, the Compensation Committee considered the fees paid to Radford and Aon and our policy on
independence of the Compensation Committee’s consultant and other advisers, which is contained in our Corporate Governance Guidelines and the Compensation Committee’s charter. As specified in our Corporate Governance Guidelines and
Compensation Committee charter, the Compensation Committee also considered six independence factors as required by Nasdaq and the SEC, which are specified in the following table. After analyzing each of these factors indicated in the following table
and our policy on independence relative to Radford’s engagement, the Compensation Committee concluded that Radford is independent.
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Independence Factor
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Information Considered
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Other services provided to Citrix by Radford
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None other than services described in the preceding paragraphs.
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Citrix fees received by Radford, as a percentage of Aon’s total revenue
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Modest and represents less than 0.0008% of Aon’s total revenue.
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Radford’s policies and procedures that are designed to prevent conflicts of interest
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Radford maintains a number of internal mechanisms and policies to ensure its ability to provide objective, third-party advice to its clients and avoid potential conflicts of interest.
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Business or personal relationships between the Compensation Committee’s individual compensation adviser and members of the Compensation Committee
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The Compensation Committee’s individual compensation adviser has no direct business or personal relationships with any member of the Compensation Committee. Radford has provided consulting services to three companies that
are affiliated with members of the Compensation Committee.
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Citrix stock owned by the Compensation Committee’s individual compensation adviser
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The Compensation Committee’s individual compensation adviser does not directly own any Citrix stock and the practice is prohibited under Aon’s Code of Conduct.
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Business or personal relationships between the Compensation Committee’s individual compensation adviser, or Radford, with a Citrix executive officer
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Neither the Compensation Committee’s individual compensation adviser, nor Radford, has a direct business or personal relationship with any Citrix executive officer.
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Our use of Benchmarks and Peer Group Analysis
We annually conduct a competitive analysis of the compensation paid to our executive officers and review the compensation practices of our peer group and of the
software industry overall. As in prior years, the analysis for 2015 measured our compensation opportunities for executive officers and actual compensation paid against information from the following sources:
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•
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independent, commercially available surveys on executive compensation within the software industry, tailored to reflect our relative market capitalization and revenue, including:
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•
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the Radford Global Technology Survey;
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•
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the Radford Global Sales Survey; and
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•
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an internally-prepared benchmark analysis using commercially available survey data and information from publicly filed reports from a group of 17 peer technology companies, or the peer group, specifically identified by
the Compensation Committee.
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We annually evaluate the composition of our peer group and adjust the composition of our peer group for factors such as
recent acquisitions of peer companies, new markets that we have entered or changes in the
technology market landscape. In 2015, with assistance from Radford, we again focused on developing a peer group to address the dynamics in the markets for talent in which we compete. Further,
based on feedback from our largest shareholders and an assessment of our shareholder return performance relative to our peers, among other factors, in October 2014 our Compensation Committee revised our executive compensation peer group for 2015 to
include Autodesk, CA Technologies and Synopsys and to exclude Amazon and Google. Our peer group includes:
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•
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companies that represent an appropriate range from a size and scope perspective;
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•
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innovative companies that operate in virtualization, cloud, software-as-a-service and networking markets; and
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•
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companies with whom we compete for talent.
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We believe that our peer group continues to be aligned with our strategic
vision and positions us to attract, retain and engage high performing leaders. Moreover, our current peer group, with its inclusion of a full array of companies with whom we compete for talent, maintains Citrix position at approximately the group
median across key financial metrics we view as important in selecting a peer group.
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46
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The table below lists the companies in our 2015 peer group indicating the peers with whom we regularly compete for
executive, managerial and technical talent, including Microsoft and Cisco, the two companies with which we most frequently competed for talent in 2015 across our
employee base. We believe that, like Citrix, our 2015 peer group is composed of innovative, software-focused businesses operating on a global scale and are the companies with whom we look to
align our executive compensation practices.
Trademarks are
property of their respective owners.
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(1)
|
Fiscal year end data presented in the table is for fiscal year ending in 2015, except for Concur Technologies, Inc. which was acquired by SAP SE in 2014 and Riverbed Technologies, Inc., which was acquired by Thoma Bravo
in 2015. For Concur Technologies, Inc. and Riverbed Technologies, Inc. fiscal year end data presented is for fiscal year ending in 2014.
|
We use the peer group benchmarks as one of several factors that inform our judgment of appropriate compensation
parameters for base salary, variable cash compensation and equity-based, long-term incentives. Our executive compensation decisions are made on a case-by-case basis, and benchmarks are just one consideration within our holistic approach to executive
compensation.
Based on an assessment of our peer group, in October 2015, our Compensation Committee revised our executive compensation
peer group for 2016 to include Cadence Design Systems, NetApp, Symantec and Yahoo and to exclude Cisco and Microsoft. We also excluded Concur and Riverbed as each of these companies was acquired.
Components of Compensation
Commitment to Performance-Based Compensation
We
are committed to aligning at least 50% of our Chief Executive Officer’s annual target compensation directly with company performance. For 2015, our former Chief Executive Officer’s total compensation (excluding retention and retirement
benefits) was 50% performance-based as shown below. Also as shown below, approximately 45% of the compensation of our Named Executive Officers, other than our Executive Chairman, Interim Chief Executive Officer and President, on average, was
performance based.
We further demonstrated this commitment with our current President and Chief Executive Officer’s, Kirill Tatarinov’s,
employment agreement and initial total target direct compensation, which was 57% performance-based compensation.
Base Salary
Salary levels for our executive officers are based on several factors, including individual performance and experience, the scope of the role and competitive ranges
informed by compensation data reported for similar roles at companies in our peer group.
In 2015, based on the objectives of our executive compensation program, our evaluation criteria for individual
performance, Citrix’s overall performance and other factors described above, the base salaries of our Named Executive Officers, were increased, effective April 1, 2015 unless otherwise indicated in the notes to the table below. The base
salaries for our Named Executive Officers for 2015 were as follows:
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2014 Base
Salary
($)
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2015 Base
Salary
($)
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Increase
(%)
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Robert M. Calderoni(1)
Executive Chairman, Interim Chief Executive Officer and President
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—
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1,000,000
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—
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Mark B. Templeton
Former President and Chief Executive Officer
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900,000
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925,000
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2.8
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David J. Henshall
Executive Vice President, Chief Operating Officer and Chief Financial Officer
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675,000
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695,000
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3.0
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Robson B. Grieve
Former Senior Vice President, Customer Experience & Marketing and Chief
Marketing Officer
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—
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395,000
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—
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Christopher S. Hylen
Senior Vice President and General Manager, Mobility Apps
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420,000
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435,000
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3.6
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Klaus Oestermann(2)
Senior Vice President and General Manager, Delivery Networks
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360,360
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425,000
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17.9
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T. Geir Ramleth
Former Chief Strategy Officer, Senior Vice President and General Manager,
Workspace Services
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580,000
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580,000
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—
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Carlos E. Sartorius(3)
Senior Vice President, Worldwide Sales and
Services(3)
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444,021
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525,000
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18.2
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(1)
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Mr. Calderoni was appointed as Interim Chief Executive Officer and President on October 20, 2015 and served in such role until January 25, 2016. Mr. Calderoni also receives a base salary of
$1,000,000 in his capacity as Executive Chairman of our company.
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48
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(2)
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Mr. Oestermann’s base salary was increased from $360,360 to $425,000, in connection with his appointment as Senior Vice President and General Manager, Delivery Networks, to bring his base salary in line with
the market median for similar positions in Citrix’s compensation peer group.
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(3)
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Mr. Sartorius’ 2015 salary was increased from $444,021 to $525,000 in connection with his appointment as Senior Vice President, Worldwide Sales and Services to bring his base salary in line with the market
median for similar positions in Citrix’s compensation peer group.
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Variable Cash Compensation
For 2015, our compensation evaluation processes resulted in target awards for our Named Executive Officers under our Variable Cash Compensation Plan that ranged from
70% to 130% of base salary, based on the factors discussed above.
Our Compensation Committee oversees our Variable Cash Compensation Plan, with administrative
tasks delegated to management. Consistent with the way we calculate and publicly report our financial results, the financial targets and attainment levels for variable cash compensation are adjusted to exclude certain GAAP measurements, including
amortization of intangible assets primarily related to business combinations, non-cash charges associated with the expensing of equity-based compensation, non-cash charges related to amortization of debt discount, accruals related patent litigation,
charges related to our restructuring programs, the tax effects related to these items and any other items adjusted from our GAAP results in our reported earnings. In addition, the Compensation Committee and our Board of Directors retain the
discretion to decrease or increase payouts to account for extraordinary circumstances and to balance the interests of the plan participants with the interests of our shareholders. As in the past, in 2015, we did not adjust the resulting payouts
under the Variable Cash Compensation Plan or our 2015 market performance-based restricted stock unit awards discussed below.
Participants in our Variable Cash Compensation Plan received variable cash compensation awards for 2015 based upon the
achievement of objective financial goals, including targets based on reported revenue and non-GAAP corporate operating margin. We believe that, for an annual incentive program to be effective, it should be easy to understand. Thus, we use a limited
number of financial targets that focus our executive officers on the key metrics underlying our strategic plan and align performance pay strictly with financial results.
To ensure the integrity of our operating plan, and to safeguard shareholder value, the payout levels under our Variable Cash Compensation Plan are designed to motivate
performance that meets or exceeds our financial plan objectives while mitigating undue exposure for under-performance of these objectives. We rigorously test our plan design to ensure that the structure and possible outcomes do not create incentives
for our executive officers to take unnecessary and excessive risks that would impact our long-term value.
Specifically, we model potential award payouts generated
by various performance attainment levels against corporate goals for revenue and non-GAAP corporate operating margin. We also model the likely impact on shareholder value based on achieving all possible revenue and non-GAAP corporate operating
margin targets. We summarize this analysis in the following diagram:
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•
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The X axis represents plan payouts for any level of revenue;
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•
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The Y axis represents plan payouts for any level of non-GAAP corporate operating margin;
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•
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The dark blue area in the graphic below represents achievement which results in no payout under the Variable Cash Compensation Plan;
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•
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The lightest blue area represents the maximum payout under the plan of 200%; and
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•
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The medium blue rectangle in the middle of the graphic represents the area of actual plan attainment under our plans over the last 5 years.
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Over the past eight years, the plan has paid between 56.4% and 130.4% and has paid above 100% 3 times, as shown below:
We also model the likely impact on shareholder value based on achieving all possible revenue and
non-GAAP corporate operating margin targets. This modeling helps to inform threshold, target and maximum payout levels for the plan and ensures that awards, when viewed relative to our non-GAAP corporate operating margin goal, are consistent with
our overall operating plan for the year and provide the right balance of compensation to our executive officers for actual results versus returns to the business and our shareholders.
For 2015, each executive officer’s Variable Cash Compensation Plan award was based 100% on the achievement of financial targets established by the Compensation
Committee. The financial targets established are consistent with our annual operating plan, which is approved by our Board of Directors. Our Variable
Cash Compensation Plan weighted these financial components as follows:
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60% for achieving a reported revenue target of $3.336 billion; and
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•
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40% for achieving a non-GAAP corporate operating margin target of 24.0%.
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This represents a 2.9% increase in the revenue
target when compared to the revenue target of $3.239 billion for the 2014 Variable Cash Compensation Plan. This also represents a 7.4% increase in the operating margin target. As in previous years, we set this target to be consistent with the
profitability target in our annual operating plan approved by our Board of Directors, which occurred in January 2015 prior to the commencement of the comprehensive operational review led by our Operations Committee discussed earlier in this Proxy
Statement. The 2015 operating margin target set an operational goal that was as appropriately aggressive as our operating margin targets in prior years. Our Variable Cash Compensation Plan provided for a premium in the event of overachievement of
targets, capped at 200% of the target payout amount, and a reduction in the event of underachievement of targets, depending on actual results. The following chart shows the maximum performance amounts that would have resulted in a payout of 200% of
the target amount and the minimum performance requirements that needed to be met before any award could be earned.
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Maximum Performance
(200% payout)
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Minimum Performance
(30% payout)
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Revenue
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$3.475 billion(1)
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$2.979 billion
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Non-GAAP Operating Margin %
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32.6%
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26.1%
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(1)
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The maximum revenue threshold represents a 4.5% decrease from the $3.64 billion maximum threshold set for fiscal 2014 resulting from the Board’s expectation of lower growth in our business during 2015 as determined
in early February 2015 when our Variable Cash Compensation Plan was adopted. Although the maximum revenue threshold in the 2015 Variable Cash Compensation Plan decreased as compared to the 2014 maximum revenue threshold, at the time it was
established by our Compensation Committee, our Committee viewed it as requiring the same level of performance rigor as was the case under our 2014 Variable Cash Compensation Plan.
|
When actual performance falls between the threshold and the target performance levels or between the target and maximum
performance levels, payouts are calculated using a graduated slope to provide for the fair distribution of operating profit for overachievement and appropriate compensation reductions for underachievement, as applicable. Further, no incentive is
payable under our Variable Cash Compensation Plan unless at least 90% of
either financial component of our performance goal is achieved, and at such threshold level an executive officer receives only 30% of his or her target variable cash compensation allocated to
such component. This payout structure recognizes that, in a business of this scale, while overachievement merits a greater reward, any underachievement should be penalized.
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50
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Target Cash Compensation Mix
Our Named Executive Officer compensation packages have the following target mix of cash compensation
expressed both as a percentage of total targeted cash compensation and in dollars:
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Target Cash
Compensation Mix
($ and % of Total Target Cash Compensation)
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Base Salary
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Target
Variable Cash
Compensation
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Total
Target Cash
Compensation
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($)
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(%)
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($)
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(%)
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($)
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(%)
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Robert M. Calderoni
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Executive Chairman, Interim Chief Executive Officer and President
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1,000,000
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44.4
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1,250,000
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55.6
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|
2,250,000
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|
100
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|
Mark B. Templeton
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Former President and Chief Executive Officer
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925,000
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43.5
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|
1,202,500
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56.5
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2,127,500
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|
100
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|
David J. Henshall
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Executive Vice President, Chief Operating Officer and Chief Financial Officer
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695,000
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50.0
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|
695,000
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50.0
|
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1,390,000
|
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|
100
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Robson B. Grieve
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Former Senior Vice President, Customer Experience & Marketing and Chief Marketing Officer
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395,000
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62.5
|
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237,000
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|
37.5
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|
632,000
|
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|
100
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|
Christopher S. Hylen
|
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|
|
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Senior Vice President and General Manager, Mobility Apps
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435,000
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52.6
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|
391,500
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47.4
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826,500
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|
100
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Klaus Oestermann
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Senior Vice President and General Manager, Delivery Networks
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425,000
|
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52.6
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382,500
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|
47.4
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|
807,500
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|
100
|
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|
T. Geir Ramleth
|
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|
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Former Chief Strategy Officer, Senior Vice President and General Manager, Workspace Services
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580,000
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|
|
50.0
|
|
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|
580,000
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|
50.0
|
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|
1,160,000
|
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|
|
100
|
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|
Carlos E. Sartorius
|
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|
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Senior Vice President, Worldwide Sales and Services
|
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525,000
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|
50.0
|
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|
525,000
|
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|
|
50.0
|
|
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|
1,050,000
|
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|
100
|
|
Determination of Awards
Early in the first quarter of 2016, our Executive Vice President, Chief Operating Officer and Chief Financial Officer reviewed and approved the calculations of
financial target attainment levels, which were based on, and consistent with, our publicly reported financial results for 2015, and the 2015 award amounts payable to executive officers that were generated by members of our human
resources department in accordance with the terms of our Variable Cash Compensation Plan. At a meeting held in February 2016, our Compensation Committee approved (or, in the case of our Executive
Chairman and Chief Executive Officer, recommended to the Board of Directors for approval) the payouts under our 2015 Variable Cash Compensation Plan, including approval of the following award calculations:
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Weighted
|
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Goal
|
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|
Actual
|
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Attainment
|
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Payout
|
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Weighting
|
|
|
Payout
|
|
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(amounts are approximate due to rounding)
|
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|
Revenue
|
|
$
|
3.336 billion
|
|
|
$
|
3.275 billion
|
|
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|
98.2%
|
|
|
|
87.2%
|
|
|
|
60%
|
|
|
|
52.3%
|
|
|
Non-GAAP Operating Margin %
|
|
|
24.0%
|
|
|
|
25.9%
|
|
|
|
108.1%
|
|
|
|
165.3%
|
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|
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40%
|
|
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|
66.1%
|
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|
Total Weighted Payout %
|
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118.4%
|
|
The table below summarizes the payments approved by our Compensation Committee (or, in the case of our Executive Chairman
and Chief Executive Officer, approved by our Board of Directors) under our Variable Cash
Compensation Plan compared to each executive officer’s target award for 2015. Each Named Executive Officer listed below received 118.4% of his target award for 2015, except as noted below in
the notes to the table.
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Target
Variable Cash
Compensation
Award
($)
|
|
|
Actual
Variable Cash
Compensation
Award Paid
($)
|
|
|
Percentage of
Target
Awards Paid
(%)
|
|
|
Robert M. Calderoni(1)
|
|
|
|
|
|
|
|
|
|
|
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|
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Executive Chairman, Interim Chief Executive Officer and President
|
|
|
537,671
|
|
|
|
636,818
|
|
|
|
118.4
|
|
|
Mark B. Templeton(2)
|
|
|
|
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|
|
|
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Former President and Chief Executive Officer
|
|
|
968,589
|
|
|
|
1,147,197
|
|
|
|
118.4
|
|
|
David J. Henshall
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President, Chief Operating Officer and Chief Financial Officer
|
|
|
695,000
|
|
|
|
823,158
|
|
|
|
118.4
|
|
|
Robson B. Grieve(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Former Senior Vice President, Customer Experience & Marketing and Chief Marketing Officer
|
|
|
180,510
|
|
|
|
213,796
|
|
|
|
118.4
|
|
|
Christopher S. Hylen
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Vice President and General Manager, Mobility Apps
|
|
|
391,500
|
|
|
|
463,693
|
|
|
|
118.4
|
|
|
Klaus Oestermann(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Vice President and General Manager, Delivery Networks
|
|
|
302,941
|
|
|
|
333,293
|
|
|
|
110.0
|
|
|
T. Geir Ramleth
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Former Chief Strategy Officer, Senior Vice President and General Manager, Workspace Services
|
|
|
580,000
|
|
|
|
686,952
|
|
|
|
118.4
|
|
|
Carlos E. Sartorius
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Vice President, Worldwide Sales and Services
|
|
|
525,000
|
|
|
|
621,810
|
|
|
|
118.4
|
|
|
(1)
|
Mr. Calderoni’s target variable cash compensation and actual variable cash compensation are prorated to reflect less than one year of service.
|
|
(2)
|
Mr. Templeton’s target variable cash compensation and his actual variable cash compensation award are prorated to reflect less than a full year of service.
|
|
(3)
|
Mr. Grieve’s target variable cash compensation and his actual variable cash compensation award are prorated to reflect less than one year of service. The actual variable cash compensation award payment made to
Mr. Grieve was $163,998, which reflects his variable cash compensation award net of relocation expenses recovered by Citrix.
|
|
(4)
|
Mr. Oestermann’s target variable cash compensation and actual variable cash compensation reflect participation in two variable cash compensation plans in 2015 due to his promotion to the executive leadership
team.
|
Equity-Based Long-term Incentives
The purpose of our equity-based long-term incentives is to attract, retain and engage high performing leaders, further align employee and shareholder interests, and
continue to closely link executive compensation with company performance, including against the market. Our equity-based long-term incentive program is an essential component of the total compensation package offered to our executive officers,
reflecting the importance that we place on motivating and rewarding superior results with long-term and performance-based incentives.
Approach to Equity-Based Awards
Since 2012,
except as described below with respect to our Executive Chairman, Interim Chief Executive Officer and President and current President and Chief Executive Officer, our annual equity grant program consists entirely of restricted stock units. Our
portfolio of equity awards granted to executive officers on an annual basis is a mix of just two equity elements, half of which are tied to long-term total shareholder return. Specifically, beginning in 2012, our
equity-based long-term incentive program is targeted to consist of 50% market performance-based restricted stock units tied to achievement of total shareholder return metrics against a selected
comparator index and 50% service-based restricted stock units. In 2015, in addition to our annual equity grant program and pursuant to our 2015 executive incentive program as described below, our executive officers were awarded restricted stock
units, half of which were service-based restricted stock units to promote retention and stability of our management team during this period of business transition and half of which were performance-based restricted stock units to drive the
achievement of company non-GAAP operating margin during fiscal year 2016 as part of the execution of initiatives resulting from our operational review. The non-GAAP operating margin goal for these awards was set following our operational review and
accordingly is fully aligned with such goal. We believe that our executive officers’ compensation portfolio, including equity awards, consists of a higher percentage of awards tied to objective financial measures than is the case in the
compensation portfolios of most of our peer group companies.
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52
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The exclusive use of restricted stock units granted to our executive officers, other than our Executive Chairman, Interim
Chief Executive Officer and President and current Chief Executive Officer, furthers our goals of reducing dilution, burn rate and overhang by reducing the number of shares of our common stock subject to equity-based awards while continuing to
provide incentive for our high performers to remain with us and continue to perform at a high level. Also, the inclusion of market performance-based restricted stock units based on the achievement of total return to our shareholders over a
three-year period compared to the return of the chosen comparator index places a strong emphasis on stock price performance, which underscores our focus on growth. We believe that this equity mix aligns our executive officers’ interests with
those of our shareholders since our executive officers must return value to our shareholders over the long-term before half of their awards are earned.
Equity-Based Award Grant Levels
When establishing equity grant levels for our executive officers, the Compensation Committee
considers the existing value of vested and unvested stock option and restricted stock unit ownership among the executive officers relative to each other and to our employees as a whole, previous grants of equity-based awards to our executive
officers, our overhang of equity-based awards and targeted burn rates for equity-based awards and the vesting schedules of previously granted equity-based awards, as well as the various other factors described above. While our Compensation Committee
is aware of the accounting costs of equity-based awards, that in itself is only one of several factors in determining individual equity-based awards. Further, annual equity awards for the former Chief Executive Officer and President and each Named
Executive Officer reflect the market competitive value for his or her respective role, the relative level of impact the executive officer has on company performance, and the current and prospective performance of the executive officer in his or her
role. Consistent with our past methodology, award levels for 2015 annual grants were set using an estimated value of Citrix stock based upon an average of the last 30 trading days in 2014.
Restricted Stock Unit and Restricted Stock Awards
Pursuant to the 2014 Plan, we may grant executive officers various types of awards, including market performance-based and performance-based restricted stock units,
service-based restricted stock units and service-based
restricted stock. Once vested, each restricted stock unit represents the right to receive one share of our common stock.
Market Performance-Based Awards
Our market performance-based awards in
the portfolio of annual grants have the following design elements:
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•
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awards are tied to long-term performance against a comparator index;
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•
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a payout curve that is based upon the percentage point difference of our return and the comparator index return;
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•
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3-year performance cycles with no interim payouts; and
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•
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vesting of achieved awards at the end of the 3-year performance period.
|
These design elements were adopted because we
believe that measuring performance over a multiple year period based on a total return to our shareholders, or TSR, closely aligns our executive officers’ objectives with those of our shareholders in the long-term, while furthering our
retention objectives. In effect, as further discussed below, a significant portion of realizable equity compensation paid to our Chief Executive Officer and other executive officers is determined based on our TSR compared to the Nasdaq Composite
Total Return Index over the long-term.
When determining the comparator index against which the market performance-based awards would be measured when we
established the program in 2012, we chose to measure ourselves against the index with the strongest statistical correlation to our stock performance, since a higher correlation means better alignment of program payout with company performance.
Further, a higher correlation minimizes the likelihood of a payout at the extreme ends of the payout curve. Using Radford’s PeerPicker technology, we analyzed over 6,000 publicly-traded company stocks and indices to return the most
highly-correlated to our stock over the prior three years. The results of this analysis showed that the Nasdaq Composite Total Return Index, or the XCMP, had the highest correlation.
Therefore, for the market performance-based awards, attainment levels are based on our total return to shareholders over a three-year performance period compared to the
return of the XCMP. In the case of the market performance-based awards granted in 2015, the performance period is the three-year period ending on December 31, 2017.
The payout curve for our market performance-based awards is based upon the percentage point difference of our return and
the XCMP total shareholder return. The following chart depicts the payout curve used for the market performance-based restricted stock units.
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Percentage Point
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Percentage of
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Differential
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Target Award Vested
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40% or higher
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200%
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0%
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100%
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-20%
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50%
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<-20%
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0
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We took extra precautions to limit payouts in the event our return is negative and limited awards in that case. Accordingly, in the
event that our return is negative, but we achieve a percentage point differential at or above zero, only 75% of the target award will be payable. If our return is positive and meets or exceeds the XCMP, the number of stock units vested will be based
on interpolation, with the maximum number of stock units vested pursuant to the award capped at 200% of the target number of stock units set forth in the award agreement if our return exceeds the indexed return by 40% or more. If our return over the
performance period is positive but underperforms the XCMP, a number of stock units vested will be below the target award, based on interpolation. No stock units, however, will vest if our return underperforms the XCMP by more than 20% over the
performance period. The extent to which an executive officer will vest in the award, if at all, if he or she is not employed by us at the end of the performance period is dependent upon the timing and character of the termination as provided in the
award agreement. Vesting occurs only at the end of the performance period.
The performance period for the market performance-based restricted stock units granted
in 2013, the first year we granted awards having these performance metrics, ended on December 31, 2015. During the three-year performance period for these awards, the XCMP significantly outperformed our stock. Based on this comparative
performance, no shares vested under these awards, the second consecutive year of no vesting under this program. We did not grant discretionary bonuses or awards or make any compensation adjustments to compensate for the awards that failed to vest.
Performance-Based Awards
In connection with the 2015
executive incentive program, to drive the achievement of company non-GAAP operating margin during fiscal year 2016 as part of the execution of
initiatives resulting from our operational review, our executive officers (other than the Executive Chairman and the Chief Executive Officer) were granted special, one-time performance-based
restricted stock units that are tied to achievement of company non-GAAP operating margin, during the performance period from January 1, 2016 to December 31, 2016. The payout curve for these performance-based awards is based on achievement of company
non-GAAP operating margin as detailed below (utilizing straight-line interpolation between percentages):
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Non-GAAP Operating
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Percentage of
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Margin Achieved
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Target Award Vested
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³
28%
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100%
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26%
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50%
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<26%
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0
|
In November 2015, we announced a goal of non-GAAP operating margin for fiscal 2016 of at least 28%. Accordingly, our Compensation
Committee determined that to further our goals, it was appropriate to align these special, one-time performance-based awards with our non-GAAP operating margin goal. Our Compensation Committee determined the size of these awards after considering
our executive officers current cash compensation, unvested equity value and the extraordinary circumstances faced by our company at this point in its business transition.
In August 2015, upon Mr. Calderoni’s appointment to Executive Chairman, he was also awarded a performance-based award tied to non-GAAP operating margin having the
same payout curve as described above.
Mr. Calderoni was further awarded performance-based awards tied to total shareholder return over an
18-month
period ending on January 31, 2017, having the following payout curve (utilizing straight-line interpolation between percentages):
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Company TSR
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Percentage of
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Achieved
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Target Award Vested
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³
20%
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100%
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³
10% but
<20%
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50%
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<10%
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0
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When determining the performance awards granted to Mr. Calderoni, the Compensation Committee sought to align the awards with the
expected length of time that Mr. Calderoni would serve in his role as Executive Chairman, which was estimated to be approximately eighteen months, and his responsibilities while serving in this role, including leading the search for our new
Chief Executive Officer, leading us through our operational review and executing
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54
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the strategic and operational initiatives that would be critical to our success following that review. Specifically, the Compensation Committee focused on Mr. Calderoni’s critical role
and focus on increasing company profitability to bring Citrix in line with comparable companies. The Compensation Committee determined that it was appropriate to tie the award to a significant return to shareholders, which the Compensation Committee
determined to be a company target total shareholder return of at least 20%. Our Compensation Committee used the trailing 30-trading day average closing price on the grant date, which was $69.95, as the opening price, and the trailing 30-trading day
average on the last day of the performance period on January 31, 2017 will be used as the closing price. For further details, including additional business rationale, see
Individual Executive Compensation Decisions
beginning on page 57.
Service-Based Awards
Consistent with our past practice, in March 2015,
we also entered into restricted stock unit agreements with our executive officers for service-based restricted stock unit awards that were not subject to performance criteria and that vest over three years, with one-third of the units vesting on the
first, second and third anniversaries of the date of the award agreement.
In addition, in September 2015, pursuant to our 2015 executive incentive program, to
promote retention of our management team during this period of business transition, certain of our executive officers were each
awarded service-based restricted stock units, 50% of which vested on April 1, 2016 and 50% will vest on October 1, 2016 provided that the executive officer remains employed with the company in a
full-time capacity through such date.
The equity-based awards indicated in the table below for our former President and Chief Executive Officer, Executive Vice
President, Chief Operating Officer and Chief Financial Officer, Senior Vice President and General Manager, Mobility Apps, Senior Vice President and General Manager, Delivery Networks, and Senior Vice President, Worldwide Sales and Services reflect
an equity portfolio mix that is 50% performance-based or market-performance based restricted stock units and 50% service-based restricted stock units. Mr. Grieve received new hire service-based restricted stock units upon joining Citrix in
January 2015. This new hire award is reflected in the table below. Further, Mr. Calderoni’s equity awards indicated in the table below include his annual non-employee director grant, his restricted stock units granted in connection
with his appointment to Executive Chairman and his restricted stock granted in connection with his appointment to Interim Chief Executive Officer and President. Mr. Ramleth did not receive a service-based annual grant in March 2015 because he joined
Citrix in December 2014 and received new hire service-based restricted stock units at that time.
For further details regarding these additional awards, see
Individual Executive Compensation Decisions
beginning on page 57.
The following table summarizes our 2015 equity-based awards to our Named Executive Officers:
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Target
Market Performance-
Based Restricted
Stock Unit Awards
(#)(1)
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Target
Performance-
Based Restricted
Stock Unit Awards
(#)(2)
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Service-Based
Restricted Stock or
Restricted Stock Unit
Awards (#)(3)
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Robert M. Calderoni
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Executive Chairman, Interim Chief Executive Officer and President
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—
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47,652
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202,154
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(4)
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Mark B. Templeton
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Former President and Chief Executive Officer
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62,364
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—
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62,364
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David J. Henshall
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Executive Vice President, Chief Operating Officer and Chief Financial Officer
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28,124
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35,000
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63,124
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Robson B. Grieve(5)
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Former Senior Vice President, Customer Experience & Marketing and Chief Marketing Officer
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15,591
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20,000
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60,000
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Christopher S. Hylen
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Senior Vice President and General Manager, Mobility Apps
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15,591
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20,000
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35,591
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Klaus Oestermann
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Senior Vice President and General Manager, Delivery Networks
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12,473
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20,000
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32,473
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T. Geir Ramleth
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Former Chief Strategy Officer, Senior Vice President and General Manager Workspace Services
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23,886
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(6)
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25,000
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(6)
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25,000
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Carlos E. Sartorius
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Senior Vice President, Worldwide Sales and Services
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20,268
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25,000
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45,268
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(1)
|
Reflects the target number of restricted stock units that our executive officers may earn under the terms of their 2015 market performance-based restricted stock unit agreements.
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(2)
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Reflects the target number of restricted stock units that our executive officers may earn under the terms of their 2015 performance-based restricted stock unit agreements.
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(3)
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Includes service-based restricted stock units granted in connection with our 2015 executive incentive program to certain of the Named Executive Officers.
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(4)
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Includes annual director grant of 4,000 restricted stock units, 95,303 restricted stock units granted in connection with Mr. Calderoni’s appointment to Executive Chairman and 102,851 shares of restricted stock
granted in connection with Mr. Calderoni’s appointment to Interim Chief Executive Officer and President.
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(5)
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Mr. Grieve forfeited all of his restricted stock units upon his departure from our company in November 2015.
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(6)
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Mr. Ramleth forfeited this restricted stock unit award upon his departure from our company in December 2015.
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Benefits
Our executive officers participate in our broad-based employee benefit plans on the same terms as eligible, non-executive employees, subject to any legal limits on the
amounts that may be contributed or paid by executive officers under these plans. We offer a stock purchase plan, under which our employees may purchase shares of our common stock at a 15% discount from the fair market value of our common stock on
the last business day of the purchase period (determined by reference to the closing price of our common stock on such date), and a 401(k) plan, which allows our employees to invest in a wide array of funds on a pre-tax basis and which provides a
matching contribution from our company. We also maintain insurance and other benefit plans for our employees. Our executive officers receive higher life, accidental death and dismemberment and disability insurance benefits than
other employees, which reflects industry standards and their relative base salary levels. Our executive officers also receive reimbursement for annual health physicals and are eligible for
relocation assistance upon joining our company. During 2015, we did not offer any non-qualified deferred compensation plans or supplemental retirement plans to our executive officers. During 2015 we had a number of executive officers who relocated
and accordingly we provided relocation benefits and in certain cases additional amounts to cover taxes in connection with such relocation. For more information, please refer to the Summary Compensation Table and the Nonqualified Deferred
Compensation Table below. We have always limited the perquisites that are generally made available to our executive officers.
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56
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Individual Executive Compensation Decisions
Next, we discuss how we apply the policies and practices described above and the resulting compensation paid or awarded to each of our Named Executive Officers for the
year ended December
31, 2015 as set forth
in the Summary Compensation Table and the Grants of Plan-Based Awards Table.
Chief
Executive Officer Compensation
Our President and Chief Executive Officer is responsible for overseeing all of our corporate functions, business units,
go-to-market activities and the attainment of our strategic, operational and financial goals. Working in concert with management and our Board of Directors, our President and Chief Executive Officer formulates current and long-term strategic plans
and objectives and is chief spokesperson to our employees, customers, partners and shareholders.
Based on a recommendation of the Compensation Committee, our Board
of Directors determines compensation for our President and Chief Executive Officer using the same factors it uses for other executive officers, placing less emphasis on base salary and, instead, driving greater performance-based alignment through
equity-based long-term and variable cash compensation. In assessing the compensation paid to our President and Chief Executive Officer, the Compensation Committee relies on the advice of its independent compensation consultant, information from
selected benchmarks and its judgment with respect to the factors described above and specific factors described below.
Former Chief Executive Officer
In March 2015, during our annual compensation planning process for 2015, Mark B. Templeton was our President and Chief Executive Officer. At that time, our
Compensation Committee and Board of Directors increased Mr. Templeton’s annual base salary from $900,000 to $925,000, a 2.8% increase, and Mr. Templeton’s target variable cash compensation award from 120% of his base salary to 130%
resulting in a 8.3% increase in Mr. Templeton’s total target cash compensation, which was at the market median of Citrix’s executive compensation peer group at the time of these compensation decisions. In July 2015, Mr. Templeton
agreed to step down from his role as our Chief Executive Officer and notified our Board of Directors of his intention to retire. On October 20, 2015, he retired from our
company. Accordingly, as a result of Mr. Templeton’s retirement, during 2015, he received base salary compensation of $740,057 and was awarded $1,147,197 in prorated variable cash
compensation.
Also, in March 2015, when annual equity awards were granted to our executive officers, our Compensation Committee granted Mr. Templeton 62,364 market
performance-based restricted stock units with a performance requirement based on the total return to our shareholders over a three-year performance period compared to the return on the XCMP described above. Mr. Templeton was also granted 62,364
service-based restricted stock units that vest in three equal annual installments. Mr. Templeton’s annual equity awards in 2015 were slightly above the market midpoint of Citrix’s executive compensation peer group when measured on a value
basis at the time of these compensation decisions. Our Board of Directors approved Mr. Templeton’s equity awards upon the recommendation of the Compensation Committee.
As previously discussed, we entered into a cooperation agreement with Elliott, a significant investor in our company, in July 2015. As an outcome of reaching an accord
with Elliott, Mr. Templeton agreed to step down from his role as our Chief Executive Officer. Our Board of Directors commenced a search for our new Chief Executive Officer. In order to encourage Mr. Templeton to remain employed with us until
his successor was appointed during a period of critical changes at Citrix, our Board of Directors began negotiations with Mr. Templeton to mutually agree on a retention bonus and other compensation and benefits arrangements.
Mr. Templeton joined Citrix prior to our initial public offering; and during his tenure, Citrix evolved from a one-product, $15 million revenue organization, to a
global market leader with revenues of $3.14 billion in 2014. Despite his long tenure at Citrix, Mr. Templeton did not have an employment agreement with us or retirement benefits, including acceleration of unvested equity awards upon retirement, any
elective compensation deferral arrangements or other nonqualified retirement arrangements, such as a supplemental executive retirement plan, that would have provided benefits to Mr. Templeton automatically upon his retirement. Yet, during the
second half of 2015 Mr. Templeton continued to play a critical role in, among other things, retaining and leading our management team, preserving our operational capacity, maintaining the Citrix culture and the commitment and engagement of our
employees, partners and customers, and facilitating a smooth transition to his
successor during a difficult transition period for Citrix. Without the support of Mr. Templeton during this transition period, our Board’s ability to drive crucial strategic changes
would have been jeopardized.
In October, the Board and Mr. Templeton concluded their negotiations regarding a retention agreement. The retention agreement provided
Mr. Templeton benefits upon a permanent, interim or acting Chief Executive Officer being named. In structuring the retention arrangement for Mr. Templeton, our Compensation Committee considered the uncertainty as to the length of the Chief
Executive Officer search and current market practices based on research and benchmarking provided by its independent compensation consultant. As part of the retention agreement, Mr. Templeton remained with Citrix until the appointment of
our Interim Chief Executive Officer and President and agreed to provide transition assistance to Citrix upon the request of the Board of Directors for a period following his retirement. The specific benefits provided in the agreement were the result
of numerous discussions between our Board of Directors, including Mr. Cohn, the representative of Elliott on our Board, and Mr. Templeton, in an effort to ensure a smooth leadership transition while focusing on the critical changes being
driven by our Board of Directors. Our Compensation Committee and the disinterested members of our Board of Directors unanimously approved the retention agreement with Mr. Templeton.
Our Executive Chairman, Mr. Calderoni, was appointed Interim Chief Executive Officer and President in October 2015. At this time, Mr. Templeton retired and
pursuant to his retention agreement received a retention bonus equal to two times the sum of his current annual base salary and target variable cash compensation. In addition, Mr. Templeton received immediate vesting of all of his equity
awards with service-based vesting, consisting of 104,042 restricted stock units. In addition, Mr. Templeton was entitled to continued health insurance coverage until his 65
th
birthday in
2018, and we paid the premium on Mr. Templeton’s executive life insurance policies owned by Citrix through Mr. Templeton’s 65
th
birthday in 2018, which policies were transferred
from Citrix to Mr. Templeton following his retirement. Finally, we purchased for Mr. Templeton’s benefit a supplemental directors and officers liability insurance policy.
The total value of the payments and benefits provided to Mr. Templeton under the terms of his retention agreement
was approximately $13,759,641, which consisted of the following:
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retention bonus of $4,255,000;
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•
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vesting of service-based equity awards of $8,609,476 (consisting of 104,042 restricted stock units multiplied by a per share price of $82.75, which was the closing price per share of our common stock on the vesting
date);
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•
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health benefits continuation of approximately $25,977;
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•
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premiums of $75,335 related to Mr. Templeton’s life insurance policies maintained by Citrix;
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•
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transfer to Mr. Templeton upon his retirement of three Citrix-owned whole life insurance policies with an accumulated cash surrender value of $693,517;
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•
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one-time cost to Citrix of $50,000 for premiums for a supplemental directors and officers liability insurance policy for the benefit of Mr. Templeton; and
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•
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reimbursement of legal fees in an amount of $29,220, plus an additional amount of $21,116 to cover the estimated taxes that Mr. Templeton would incur as a result of his receipt of such reimbursement payment.
|
Such payments and benefits were subject to the execution of a separation and release agreement by Mr. Templeton.
Mr. Templeton’s retention agreement did not provide for the acceleration of performance-based awards upon his retirement. As a result, Mr. Templeton forfeited
155,582 performance-based restricted stock units upon his departure.
Executive Chairman, Interim Chief Executive Officer and President
As previously discussed, Mr. Calderoni, a director of Citrix since June 2014, was appointed Executive Chairman in July 2015 in connection with Citrix entering into a
cooperation agreement with Elliott. In connection with Mr. Calderoni’s appointment, the Compensation Committee worked with our independent compensation consultant to understand market practices, considered benchmarking data for similar
Executive Chairman roles and determined that an annual base salary of $1,000,000 for Mr. Calderoni was appropriate. Mr. Calderoni was also granted a mix of service-based and performance-based equity awards. When determining the level and type of
awards granted to Mr. Calderoni, the Compensation Committee sought to align the awards with the expected length of time that Mr. Calderoni would serve in his role as Executive Chairman, which was estimated to be approximately eighteen months,
and his responsibilities
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58
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while serving in this role, including leading the search for our new Chief Executive Officer, and leading us through our operational and strategic reviews. Specifically, the Compensation
Committee focused on Mr. Calderoni’s critical role and focus on increasing company profitability to bring Citrix in line with comparable companies. Accordingly, a substantial portion of Mr. Calderoni’s equity compensation granted upon his
appointment as Executive Chairman is performance-based and has performance metrics that reflect this focus.
Mr. Calderoni was granted 23,826 performance-based
awards that vest based on achievement of company non-GAAP operating margin over fiscal year 2016 and 23,826 performance-based awards that vest based on attainment of company total shareholder return at the end of the performance period ending
January 31, 2017, each with performance metrics as described above. Further, Mr. Calderoni was granted 95,303 service-based awards on August 1, 2015 that vest monthly over the eighteen-month period he is expected to serve as Executive Chairman.
Mr. Calderoni was not granted any additional equity-based awards in the company’s executive compensation refresh cycle for 2016 that concluded in March 2016, and no other equity-based awards are planned for Mr. Calderoni in 2016. The
Compensation Committee will regularly assess Mr. Calderoni’s compensation during his tenure as Executive Chairman.
Following an extensive candidate search and
interview process, in October 2015, our CEO search was still ongoing due to the unpredictable nature of CEO searches.
Simultaneously, the work of the Operations Committee had proceeded, and it became clear that a number of senior leaders would be leaving Citrix. These developments triggered our Board of
Directors and Mr. Templeton to agree that it was appropriate for Mr. Templeton to retire, although a permanent successor Chief Executive Officer had not yet been identified. No internal candidates had the right combination of operational
leadership and deep product management experience; and it was critical that the Board of Directors appoint someone with the knowledge and skills necessary to manage and guide the company as our management team focused on time-sensitive initiatives
critical to our company’s future success.
Upon Mr. Calderoni’s appointment to Interim Chief Executive Officer and President in October 2015, our Board of
Directors and Compensation Committee re-evaluated Mr. Calderoni’s total compensation and considered the exceptional circumstances facing the company and the importance of Mr. Calderoni driving the execution of our strategic and operational
initiatives, including the search for our new Chief Executive Officer and executing on the actions needed to increase our profitability and to bring Citrix in line with comparable companies in order to create significant shareholder value. Special
consideration was given to the fact that the roles of President and Chief Executive Officer and Executive Chairman are different and distinct, and that Mr. Calderoni was assuming important incremental responsibilities as Interim Chief Executive
Officer and President as indicated in the table below:
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|
|
Responsibilities of Executive Chairman
|
|
Responsibilities of
Interim Chief Executive Officer
and President
|
|
•
Led Chief Executive Officer search (Chair of
Search Committee)
•
Drives development of our strategic plan to improve Citrix’s margins, profitability and capital structure, including 2015 operational review and review of
strategic
alternatives for GoTo family of products
•
Sets agenda for and chairs Board meetings
•
Coordinates with chairs of Board committees
•
Assists Nominating and Corporate Governance
Committee with the Board’s annual evaluation and self-assessment
•
Assists Nominating and Corporate Governance
Committee with Board composition and evolution planning, including review of committee memberships
|
|
•
Worked with the management team on the operational review and its detailed implementation to improve Citrix’s margins, profitability and capital structure
•
Oversaw all corporate functions and go-to-market
activities
•
Oversaw the attainment of our strategic,
operational and financial goals in 2015 and strategic and operational planning for 2016
•
Set current strategic imperatives and priorities
of the organization
•
Chief spokesperson to our employees, customers, partners and shareholders
|
Our Compensation Committee considered the elements of Mr. Calderoni’s compensation; and, as a result, the
Compensation Committee recommended entering into an employment agreement with Mr. Calderoni that, despite Mr. Calderoni taking on considerably more responsibility in his role as Interim Chief Executive Officer and President, provided for no changes
to his annual base salary. Our Compensation Committee recognized that Mr. Calderoni had been playing, and would continue to play, a significant role in achieving our financial goals for 2015 and as a result determined that it would be appropriate to
align Mr. Calderoni with the rest of the executive team through participation in our 2015 Variable Cash Incentive Plan for the period of the fiscal year that he would significantly impact our financial results. Consequently, Mr.
Calderoni’s employment agreement provided for Mr. Calderoni’s participation in our Variable Cash Compensation Plan at a target variable cash compensation level equal to 125% of his base salary, prorated for the period beginning on the date
he was appointed as Executive Chairman, the date that Mr. Calderoni began to significantly impact our financial results, and ending on the date that a permanent Chief Executive Officer was appointed. As Interim Chief Executive Officer and President,
Mr. Calderoni’s base salary was set at the market median, and his variable cash compensation was set at the 25
th
percentile of Citrix’s current executive compensation peer group. In
accordance with his employment agreement, Mr. Calderoni received base salary compensation of $430,556 in 2015, and he was awarded pro-rated variable cash compensation of $636,818 in accordance with our 2015 Variable Cash Compensation Plan.
To further incentivize Mr. Calderoni to assume the role of Interim Chief Executive Officer and President for an unknown period of time and in light of the
significance of Mr. Calderoni’s role discussed above, the Compensation Committee recommended that Mr. Calderoni be awarded 102,851 service-based restricted shares that vest in 12 monthly installments starting on November 2, 2015. Our
Compensation Committee sought advice from its independent compensation consultant to understand market practices in similar situations, even though there are only a very limited number of relevant data points from which to assess market practice.
The Compensation Committee also considered other factors, including the combined value of Mr. Calderoni’s service and performance-based awards that were granted upon his appointment as Executive Chairman and the potential time that Mr.
Calderoni could serve in his role as Interim Chief Executive Officer and President (which our Compensation
Committee estimated to be up to one year) when determining the level of his incremental equity grant upon being appointed Interim Chief Executive Officer and President. Our Compensation Committee
determined that, based on a holistic assessment of these factors, the size and vesting provisions of this award were appropriate under the circumstances and reasonable in light of the equity value that successful execution of our operational and
strategic initiatives would likely create for our shareholders.
The disinterested members of our Board of Directors, including Mr. Cohn, the representative from
Elliott on our Board, unanimously approved Mr. Calderoni’s employment agreement, including his equity awards, upon the recommendation of the Compensation Committee.
Current Chief Executive Officer
In January 2016, our Board of
Directors concluded its search process for our next President and Chief Executive Officer with the appointment of Kirill Tatarinov as our President and Chief Executive Officer. Our CEO search focused on identifying leaders that have demonstrated
both strong product management and operational leadership skills. Kirill Tatarinov, who most recently served as Executive Vice President of the Microsoft Business Solutions Division has a proven track record of growing businesses and driving
operational performance. Because of these demonstrated skills, in January 2016, our Board identified Mr. Tatarinov as the best person to lead our company for the long-term and to execute on the operational and strategic initiatives that we
started in 2015. He was appointed President and Chief Executive Officer in January 2016 and joined our Board as a director at that time.
In approving the
initial annual compensation and equity awards for Mr. Tatarinov, our Compensation Committee was mindful of both the fierce competition for talented executives in the technology sector and the demands on, and responsibilities of, a leader of a global
organization of the scale and complexity of Citrix focused on significant operational and strategic transitions. Further, our Compensation Committee recognized the challenges in not only finding an individual to fit the specific needs of Citrix, but
also in retaining that person during a time when the company is going through a significant transition and the Board is driving substantial change. Accordingly, our Compensation Committee, with assistance from our independent compensation
consultant, conducted a comprehensive review of pay structures for chief executive
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60
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officers at peer companies. As a result of that review, our Compensation Committee determined that it was important to establish a compensation framework for Mr. Tatarinov that would provide a
total target compensation opportunity that was competitive with those of chief executive officers at other major global technology companies, that included long-term company performance as a significant portion of pay and that provided the
opportunity to build significant ownership when the chief executive officer creates sustained long-term value for shareholders. Therefore, our Compensation Committee determined that it was important to align a significant amount of
Mr. Tatarinov’s compensation to company performance.
As a result of that review, our Board of Directors and Compensation Committee approved an initial
target direct compensation package that is 57% performance-based for Mr. Tatarinov (base salary, service-based restricted stock, performance-based restricted stock units and target variable cash). This percentage of performance-based target
direct compensation is above average when compared to the pay mix for Chief Executive Officers in our current peer group.
In connection with Mr. Tatarinov’s
employment, we entered into an employment agreement with Mr. Tatarinov that provides for an initial base salary of $1,000,000, which will be subject to annual review. In addition, Mr. Tatarinov is entitled to participate in our Variable Cash
Compensation Program at an annual target variable cash payment of 125% of his base salary. Mr. Tatarinov’s base salary is at the market median, and his variable cash compensation is at the
25
th
percentile, of Citrix’s current executive compensation peer group. Upon the commencement of his employment with us and to align Mr. Tatarinov’s incentives with the interests of our
shareholders, Mr. Tatarinov received an initial grant of 118,588 service-based shares of restricted stock that vest in twelve quarterly installments over a three-year period and 220,235
performance-based restricted stock units that vest based on our compounded annualized total shareholder return over a three-year performance period as described below.
In determining the performance metrics of Mr. Tatarinov’s performance-based restricted stock units, our Board of Directors and Compensation Committee considered
three objectives:
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•
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Provide an incentive that has clear performance measures and aligned rewards;
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•
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Provide meaningful retention value and reward for performance even during a market downturn if Citrix outperforms similar software companies; and
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•
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Reward performance throughout the three-year performance period.
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Our Compensation Committee deviated from our typical
equity compensation program to recruit and retain Mr. Tatarinov and to draw him away from competing opportunities. To achieve the first objective, our Compensation Committee tied vesting of Mr. Tatarinov’s performance-based restricted stock
units to absolute total shareholder return based on a rigorous compound annual growth hurdle calculated using the trailing 20-trading day average closing price on the grant date and the trailing 20-trading day average closing price on the last day
of the performance period on January 24, 2019 so as to payout only on sustained increases in total shareholder value, in accordance with the following payout curve (utilizing straight-line interpolation between percentages for any total shareholder
return percentage greater than 5%):
Our Compensation Committee determined that this metric was sufficiently challenging to align Mr. Tatarinov’s
interests with those of our shareholders. For example, to achieve an absolute total shareholder return based on
compound annual growth of 10%, which would result in Mr. Tatarinov receiving 100% of his performance-based award, the trailing 20-trading day average share price at the end of the performance
period would have to be at least $94.27 as compared to the opening share price of Mr. Tatarinov’s award of $70.83. Based on the outstanding shares on January 25, 2016, the date of grant of Mr. Tatarinov’s award, a share price of $94.27
would result in a market capitalization of $14.5 billion as compared to the grant date market capitalization of $10.9 billion based on the opening share price of Mr. Tatarinov’s award and the outstanding shares on the date of grant. Further, to
achieve an absolute total shareholder return based on compound annual growth of 30%, which would result in Mr. Tatarinov receiving 200% of his performance-based award, the trailing 20-trading day average share price at
the end of the performance period would have to be at least $155.61 as compared to the opening share price of Mr. Tatarinov’s award of $70.83. This would result in a market capitalization of
$23.9 billion as compared to the current market capitalization of $10.9 billion.
To achieve the second objective of meaningful retention during a challenging
market environment, our Compensation Committee provided a means to reward Mr. Tatarinov for superior relative performance during a period of market correction. Mr. Tatarinov may receive a portion of his performance-based award based on
Citrix’s relative total shareholder return percentile rank compared to companies included in the S&P Computer Software Select Index as follows:
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Absolute TSR (based on compound annual
growth)
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Negative
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0-4.99%
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5%
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10%
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20%
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30%
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Relative TSR Percentile
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Less than 60
th
Percentile
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0
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%
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0
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%
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50
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%
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100
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%
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150
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%
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200
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%
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60
th
to 74.9
th
Percentile
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25
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%
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50
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%
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75
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%
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100
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%
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150
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%
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200
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%
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75
th
to 84.9
th
Percentile
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50
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%
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75
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%
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100
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%
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100
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%
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150
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%
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200
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%
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85
th
Percentile or higher
|
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75
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%
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100
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%
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100
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%
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100
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%
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|
150
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%
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200
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%
|
Mr. Tatarinov will receive no payment if relative total shareholder return is below the 60
th
percentile and absolute total shareholder return is below 5%, and the payout in a negative shareholder return scenario is capped at 75% of target and awarded only if Citrix’s performance is at
or above the 85
th
percentile.
To achieve the third objective of rewarding performance not just at the end of
the three year performance period but also throughout the performance period, the Compensation Committee provided for an interim measurement of performance. Following an interim measurement period of eighteen months, the Compensation Committee will
determine the number of restricted stock units that would be deemed earned based on performance to date, and only up to 33% of the target award may be earned by Mr. Tatarinov based on such interim performance. Further, any restricted stock units
that are deemed earned will remain subject to continued service and will not vest until the end of the full three-year performance period.
Mr. Tatarinov’s new
hire long-term equity incentive award is approximately three times the market median for annual
long-term equity incentive awards to Chief Executive Officers among Citrix’s executive compensation peer group when measured on a value basis. Based on the experience and recommendation of
its independent compensation consultant, our Compensation Committee believes that Mr. Tatarinov’s new hire long-term equity incentive award is consistent with market practice for new Chief Executive Officers (that is, approximately three times
the market median annual long-term equity incentive award) and that the award mix, which is 65% performance-based with a focus on compounded annual total shareholder return measured on an absolute basis versus relative total shareholder return, is
more heavily performance-based than comparable Chief Executive Officer compensation packages in our peer group.
Mr. Tatarinov is not eligible for an annual equity
award grant until fiscal year 2017.
Our Board of Directors, including Mr. Cohn, the representative from Elliott on our Board who also served on our CEO Search
Committee and played a leading role in the recruitment of Mr. Tatarinov, unanimously approved
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62
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Mr. Tatarinov’s employment agreement, including his equity awards, upon the recommendation of the Compensation Committee.
Mr. Calderoni continues in his role as Executive Chairman on our Board of Directors, and is focused on working with Mr. Tatarinov to drive the execution of our
strategic plan, including operational efficiency, capital structure and product portfolio simplification. Our Board will evaluate the appropriateness of the role of Executive Chairman on an ongoing basis based on progress towards the execution of
our strategic and operational initiatives.
Other Named Executive Officers Cash Compensation – Base Salary
and Variable Cash Compensation
Executive Vice President, Chief Operating Officer and Chief Financial Officer
As Executive Vice President, Chief Financial Officer and Chief Operating Officer, David J. Henshall is responsible for overseeing our relations with our investors,
budgeting and planning, financial accounting, operations, tax, treasury, human resources, legal, information technology and security, and supply chain management. Mr. Henshall is also responsible for developing our overall financial and capital
management strategies.
As discussed above, effective April 1, 2015, Mr. Henshall’s annual base salary was increased from $675,000 to $695,000. As a
result, in 2015, Mr. Henshall received base salary compensation of $690,000.
For 2015, Mr. Henshall’s target variable cash compensation award as a
percentage of base salary was set at 100% of his base salary. For 2015, Mr. Henshall was awarded variable cash compensation of $823,158 in accordance with our 2015 Variable Cash Compensation Plan.
In connection with the incentive program we implemented in 2015, we entered into an incentive agreement with Mr. Henshall that provides certain benefits as discussed
above under the heading
2015 Executive Incentive Program
beginning on page 43.
Former Senior Vice President, Customer Experience & Marketing and
Chief Marketing Officer
As our former Senior Vice President, Customer Experience & Marketing and Chief Marketing Officer, Robson B. Grieve was
responsible for overseeing our worldwide customer experience and marketing efforts.
Mr. Grieve joined us in January 2015, and his annual base salary for 2015 was $395,000. The Compensation Committee
considered benchmarking data for compensation of similar Chief Marketing Officer roles as well as Mr. Grieve’s compensation at his previous position when determining his compensation for 2015. In November 2015, Mr. Grieve notified us that he
was leaving Citrix. As a result, in 2015, Mr. Grieve received base salary compensation of $303,371.
For 2015, Mr. Grieve’s target variable cash compensation
as a percentage of base salary was set at 60% of his base salary, and he was awarded prorated variable cash compensation of $213,796 in accordance with our 2015 Variable Cash Compensation Plan. The actual payment made to Mr. Grieve was $163,998,
which reflects his variable cash compensation award net of relocation expenses recovered by Citrix.
Senior Vice President and General Manager, Mobility Apps
As Senior Vice President and General Manager, Mobility Apps, Christopher S. Hylen oversees our Mobility Apps business unit, and is responsible for the
strategy and operations of our GoTo family of products. As previously announced, we intend to spinoff the GoTo family of products into an independent public company in late 2016. Following the proposed spinoff of our GoTo family of products,
Mr. Hylen will be the Chief Executive Officer of the new company.
As discussed above, effective April 1, 2015, Mr. Hylen’s annual base salary was
increased from $420,000 to $435,000. As a result, in 2015, Mr. Hylen received base salary compensation of $431,250.
For 2015, Mr. Hylen’s target
variable cash compensation award as a percentage of base salary was set at 90% of his base salary. For 2015, Mr. Hylen was awarded variable cash compensation of $463,693 in accordance with our 2015 Variable Cash Compensation Plan.
In connection with the incentive program we implemented in 2015, we entered into an incentive agreement with Mr. Hylen that provides certain benefits as discussed above
under the heading
2015 Executive Incentive Program
beginning on page 43.
In February 2016, we entered into an employment agreement with Mr. Hylen with
respect to his role as the future Chief Executive Officer of the new public company expected to be created in connection with the proposed spinoff of our GoTo family of products. Mr. Hylen’s
employment agreement as Chief Executive Officer of the to-be-spun business, or SpinCo, which will become effective only if the proposed spinoff is completed. The agreement provides an initial
base salary of $525,000, and under its terms Mr. Hylen will be entitled to participate in SpinCo’s executive variable cash compensation program at an annual target variable cash payment of 100% of his base salary and a maximum variable cash
payment of 200% of his base salary, as determined by SpinCo’s Compensation Committee. In addition, Mr. Hylen will receive an initial equity award from SpinCo with an aggregate value of $8,000,000, consisting of 50% of time-based restricted
stock units that vest in three equal annual installments and 50% of performance-based restricted stock units that vest over a three-year performance period based on SpinCo’s compounded annualized total shareholder return relative to
SpinCo’s peer group companies. The employment agreement also provides for severance pay and other benefits upon termination of Mr. Hylen’s employment by SpinCo without cause or for good reason.
At the time we entered into the employment agreement with Mr. Hylen, his incentive agreement was amended to provide certain benefits specifically related to the
proposed separation of the GoTo business. Mr. Hylen will be entitled to a $150,000 cash bonus payable upon completion of the spinoff or a spin-merge transaction involving the GoTo business if he remains employed with Citrix through such date. Also,
if Mr. Hylen’s employment is terminated on account of the spinoff or a spin-merge transaction involving the GoTo business, he will be entitled to payment of his target variable cash compensation for that year on a prorated basis. Upon the
effective date of the spinoff or spin-merge transaction, he will vest in the unvested portion of the 20,000 service-based restricted stock units granted to him on September 1, 2015, and subject to Compensation Committee approval, accelerated vesting
of the 20,000 performance-based restricted stock units granted to him on October 1, 2015 given that the successful completion of the spinoff would achieve the business objective set by the Compensation Committee when it made these grants to Mr.
Hylen.
Senior Vice President and General Manager, Delivery Networks
As Senior Vice President and General Manager, Delivery Networks, Klaus Oestermann is responsible for overseeing our Delivery Networks business unit. Mr. Oestermann was
promoted to this position in February 2015.
In connection with his promotion to the executive leadership team, Mr. Oestermann’s annual base salary was increased
from $360,360 to $425,000 to bring his base salary in line with the market median for similar positions in our executive compensation peer group. As a result, in 2015, Mr. Oestermann received base salary compensation of $392,173.
Mr. Oestermann’s target variable cash compensation award as a percentage of base salary was set at 75% of his base salary, and, in connection with his promotion to
the executive leadership team, was increased to 90% of his base salary. For 2015, Mr. Oestermann was awarded variable cash compensation of $333,293 in accordance with our 2015 Variable Cash Compensation Plan. Further, Mr. Oestermann’s award
reflects participation in two different variable cash plans in 2015 due to his promotion to the executive leadership team in February 2015.
In connection with the
incentive program we implemented in 2015, we entered into an incentive agreement with Mr. Oestermann that provides certain benefits as discussed above under the heading
2015 Executive Incentive Program
beginning on page 43.
Former Chief Strategy Officer, Senior Vice President and General Manager, Workspace Services
As our former Chief Strategy Officer, Senior Vice President and General Manager, Workspace Services, T. Geir Ramleth was responsible for overseeing our enterprise
product strategy and our Workspace Services business unit.
Mr. Ramleth joined us in December 2014, and his annual base salary upon joining Citrix and through 2015
was $580,000. When determining Mr. Ramleth’s compensation, the Compensation Committee considered benchmarking data for compensation of similar Chief Strategy Officer and general manager roles as well as Mr. Ramleth’s compensation at his
previous position. In 2015, Mr. Ramleth received base salary compensation of $580,000.
For 2015, Mr. Ramleth’s target variable cash compensation award as a
percentage of base salary was set at 100% of his base salary. For 2015, Mr. Ramleth was awarded variable cash compensation of $686,952 in accordance with our 2015 Variable Cash Compensation plan.
In connection with the incentive program we implemented in 2015, we entered into an incentive agreement with
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64
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Mr. Ramleth that provides certain benefits as discussed above under the heading
2015 Executive Incentive Program
beginning on page 43.
Mr. Ramleth left Citrix at the end of December 2015; and, in accordance with the terms of his incentive agreement, Mr. Ramleth became entitled to receive: a cash
payment equal to the sum of his annual base salary and target variable cash compensation; accelerated vesting of his service-based equity awards scheduled to vest within 12 months of his separation, consisting of 40,000 restricted stock units;
continuation of certain benefits through the 18 month period immediately following his separation; and reimbursement for legal fees incurred in connection with his separation. The total value of the payments and benefits provided to Mr. Ramleth
under the terms of his incentive agreement and the related separation and release agreement was approximately $4,238,967, which consisted of the following:
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•
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cash payment of $1,160,000;
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•
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vesting of service-based equity awards of $3,026,000 (consisting of 40,000 restricted stock units multiplied by a per share price of $75.65, which was the closing price per share of our common stock on December 31,
2015);
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•
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health benefits continuation of approximately $20,967; and
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•
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reimbursement of legal fees in the amount of $32,000.
|
Such payments and benefits were subject to the execution of a
separation and release agreement by Mr. Ramleth.
Senior Vice President Worldwide Sales and Services
As Senior Vice President, Worldwide Sales and Services, Carlos E. Sartorius is responsible for overseeing our worldwide sales and services efforts. Mr. Sartorius was
promoted to this position in January 2015.
Mr. Sartorius’ 2015 salary was increased from $444,021 to $525,000 in connection with his appointment as Senior
Vice President, Worldwide Sales and Services to bring his
base salary in line with the market median for similar positions in our executive compensation peer group. As a result, in 2015, Mr. Sartorius received base salary compensation of $522,531.
Mr. Sartorius’ target variable cash compensation award as a percentage of base salary was set at 75% of his base salary, and, in connection with his promotion to
the executive leadership team, was increased to 100% of his base salary. For 2015, Mr. Sartorius was awarded variable cash compensation of $621,810 in accordance with our 2015 Variable Cash Compensation Plan.
In connection with the incentive program we implemented in 2015, we entered into an incentive agreement with Mr. Sartorius that provides certain benefits as discussed
above under the heading
2015 Executive Incentive Program
beginning on page 43.
Other Named Executive
Officers Equity – Based Long-term Incentive Compensation
On January 26, 2015, upon joining Citrix, as a new hire award, Mr. Grieve was awarded
40,000 service-based restricted stock units that vest over three years, with one-third of the units vesting on the first, second and third anniversaries of the date of the award agreement. Mr. Grieve forfeited all of his restricted stock units upon
his departure from our company in November 2015.
On March 30, 2015, certain of our Named Executive Officers, were awarded a market performance-based
restricted stock unit award pursuant to which each executive officer is eligible to earn restricted stock units based on the total return to our shareholders over a three-year performance period compared to the return on the XCMP described above.
Attainment levels will be determined within 60 days of the end of the performance period (December 31, 2017 for the grants made in 2015). In March 2015, the following executives were awarded grants of market performance-based restricted stock units
at the following target award levels:
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Name and Principal Position
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Target Market Performance-
Based
Restricted
Stock Unit Awards
|
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|
David J. Henshall
Executive Vice President, Chief Operating Officer and Chief Financial Officer
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|
28,124
|
|
|
Robson B. Grieve
(1)
Former Senior Vice President, Customer Experience & Marketing and Chief Marketing Officer
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15,591
|
|
|
Christopher S. Hylen
Senior Vice President and General Manager, Mobility Apps
|
|
|
15,591
|
|
|
Klaus Oestermann
Senior Vice President and General Manager, Delivery Networks
|
|
|
12,473
|
|
|
T. Geir Ramleth
(2)
Former Chief Strategy Officer, Senior Vice President and General Manager, Workspace Services
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|
|
23,386
|
|
|
Carlos E. Sartorius
Senior Vice President, Worldwide Sales and Services
|
|
|
20,268
|
|
|
(1)
|
Mr. Grieve forfeited all of his restricted stock units upon his departure from our company in November 2015.
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|
(2)
|
Mr. Ramleth forfeited this restricted stock unit award upon his departure from our company in December 2015.
|
On March 30, 2015, the following Named Executive Officers, were also awarded service-based restricted stock
units as part of our annual compensation process, which vest in three equal annual installments as follows:
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Name and Principal Position
|
|
Service-
Based Restricted
Stock Unit Awards
|
|
|
David J. Henshall
Executive Vice President, Chief Operating Officer and Chief Financial Officer
|
|
|
28,124
|
|
|
Christopher S. Hylen
Senior Vice President and General Manager, Mobility Apps
|
|
|
15,591
|
|
|
Klaus Oestermann
Senior Vice President and General Manager, Delivery Networks
|
|
|
12,473
|
|
|
Carlos E. Sartorius
Senior Vice President, Worldwide Sales and Services
|
|
|
20,268
|
|
The Compensation Committee approved each award. The number of restricted stock units potentially awardable under each
executive officer’s respective restricted stock unit award was determined in accordance with the factors discussed above.
In addition, in September 2015, in connection with the 2015 executive incentive program previously discussed, certain of
our Named Executive Officers were awarded special, one-time service-based restricted stock units that vest in two equal installments on April 1, 2016 and October 1, 2016 to retain key leaders and maintain the continuity and stability of our
management team during a time of transition:
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Name and Principal Position
|
|
Service-
Based Restricted
Stock Unit Awards
|
|
|
David J. Henshall
Executive Vice President, Chief Operating Officer and Chief Financial Officer
|
|
|
35,000
|
|
|
Robson B. Grieve
(1)
Former Senior Vice President, Customer Experience & Marketing and Chief Marketing Officer
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|
|
20,000
|
|
|
Christopher S. Hylen
Senior Vice President and General Manager, Mobility Apps
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|
|
20,000
|
|
|
Klaus Oestermann
Senior Vice President and General Manager, Delivery Networks
|
|
|
20,000
|
|
|
T. Geir Ramleth
Former Chief Strategy Officer, Senior Vice President and General Manager, Workspace Services
|
|
|
25,000
|
|
|
Carlos E. Sartorius
Senior Vice President, Worldwide Sales and Services
|
|
|
25,000
|
|
|
(1)
|
Mr. Grieve forfeited all of his restricted stock units upon his departure from our company in November 2015.
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|
|
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|
66
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|
|
Further, in October 2015, also in connection with the 2015 executive incentive program, certain of our Named Executive
Officers were awarded special, one-time performance-based awards pursuant to which each executive officer is eligible to earn restricted stock units based on our non-GAAP operating margin achievement.
Attainment levels will be determined within 60 days of the end of the performance period (December 31, 2016). The following named executive officers were awarded performance-based awards at
the following target award levels:
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|
|
|
|
|
|
Name and Principal Position
|
|
Target
Performance-
Based
Restricted
Stock Unit Awards
|
|
|
David J. Henshall
Executive Vice President, Chief Operating Officer and Chief Financial Officer
|
|
|
35,000
|
|
|
Robson B. Grieve
(1)
Former Senior Vice President, Customer Experience & Marketing and Chief Marketing Officer
|
|
|
20,000
|
|
|
Christopher S. Hylen
Senior Vice President and General Manager, Mobility Apps
|
|
|
20,000
|
|
|
Klaus Oestermann
Senior Vice President and General Manager, Delivery Networks
|
|
|
20,000
|
|
|
T. Geir Ramleth
(2)
Former Chief Strategy Officer, Senior Vice President and General Manager, Workspace Services
|
|
|
25,000
|
|
|
Carlos E. Sartorius
Senior Vice President, Worldwide Sales and Services
|
|
|
25,000
|
|
|
(1)
|
Mr. Grieve forfeited all of his restricted stock units upon his departure from our company in November 2015.
|
|
(2)
|
Mr. Ramleth forfeited this restricted stock unit award upon his departure from our company in December 2015.
|
The Compensation Committee approved each award in connection with the 2015 executive incentive program. The
Compensation Committee determined the number of service-based restricted stock units and target award levels for the performance-based restricted stock units considering input from its independent compensation consultant and a number of other
factors, such as our executive officers current cash compensation, unvested equity value and the extraordinary circumstances facing our company at the time.
In March, 2016, during our 2016 annual equity grant program, the performance-based restricted stock awards we granted to
our executive officers were structured to have the same performance metrics as Mr. Tatarinov’s performance-based award, as discussed above, except that these awards have a performance period ending on March 30, 2019 and an opening average share
value of $76.29.
Other Compensation Policies and Information
Equity Award Grant Policy
In
2007, the Compensation Committee adopted the Citrix Equity Award Grant Policy, or the Awards Policy. The Awards Policy enhances our controls with respect to grants of equity awards by establishing procedures for approving and pre-determining the
dates on which awards will be made. Pursuant to the Awards Policy, unless a different date is set by our Board of Directors or the Compensation Committee, annual grants of full value awards are made on the last business day in March on or prior to
March 30th. The Awards Policy also establishes fixed grant dates for new hire and performance grants. An employee’s eligibility to receive an award as of a particular, fixed grant date is subject to the time of the month in which the
employee’s employment begins or promotion is effective or, if later,
the date on which all documentation necessary for the approval of the grant is obtained. A copy of our Awards Policy is available on the Corporate Governance section of our website at
http://www.citrix.com/about/governance.html
under Governance Documents.
Executive Stock Ownership Guidelines
To align the interests of our executive officers with the interests of our shareholders, our Board of Directors has established stock ownership guidelines for our
executive officers. Under our current guidelines, our Chief Executive Officer is expected to own at least 100,000 shares of our common stock, our Chief Operating Officer is expected to own at least 50,000 shares of our common stock, our Chief
Financial Officer is expected to own at least 25,000 shares
of our common stock and each other executive officer is expected to own at least 20,000 shares of our common stock. To comply with these guidelines, each executive officer is required to retain
an amount equal to one-third (1/3) of the net shares (those shares remaining after shares are deducted or withheld to cover any exercise price or tax obligations arising in connection with the exercise, vesting or payment of an equity award)
received as a result of the exercise, vesting or payment of any equity-based award granted to the executive officer by the company unless such executive officer holds the applicable guideline number of shares. Each of our executive officers is
expected to hold such shares for so long as he or she is one of our executive officers. Failure to satisfy the stock holding guidelines when required to do so will result in suspension of an executive officer’s ability to sell shares of our
common stock until the requisite ownership levels are reached. Our executive officers may accumulate shares of our common stock through stock option exercises, settlement of restricted stock units or other awards and open market purchases made in
compliance with applicable securities laws, our policies or any other equity plans we may adopt from time to time. Shares of our common stock beneficially owned (unless the executive officer disclaims beneficial ownership of the shares) and vested
restricted stock (including vested but deferred restricted stock units) count towards the satisfaction of the ownership guidelines. Given the nature and expected duration of his role, our Board of Directors determined that Mr. Calderoni, as
Executive Chairman, would be subject to our director ownership guidelines and not these executive ownership guidelines.
Policy Concerning Hedging And Pledging
Transactions
Certain transactions in Citrix securities (such as buying or selling puts, calls or other derivative securities of Citrix securities, or any
derivative securities that provide the economic equivalent of ownership of any Citrix securities or an opportunity, direct or indirect, to profit from any change in the value of Citrix securities, or engaging in any other hedging transactions with
respect to Citrix securities)
create a heightened compliance risk or could create the appearance of misalignment between management and shareholders. As a result, our insider trading policy prohibits our executive officers
and directors from engaging in hedging transactions, such as in short sales and/or derivative transactions, purchasing Citrix securities on margin, holding Citrix securities in an account that is, or is linked to, a margin account, and pledging
Citrix securities as collateral for a loan.
Policy Regarding 10b5-1 Trading Plans
Under our policies, our directors and executive officers may not trade in Citrix stock unless pursuant to a trading plan that meets the requirements of the Securities
and Exchange Commission’s Rule 10b5-1 and our additional policy requirements, unless an exception is approved by the Chair of our Nominating and Corporate Governance Committee. These additional policy requirements currently include:
|
•
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a prohibition on any trades earlier than 90 days after the trading plan is approved by Citrix;
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•
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a prohibition on any adoption, cancellation, suspension, expansion or other modification to a trading plan during our quarterly earnings blackout periods; and
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•
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a minimum one-year term unless the trading plan is exhausted earlier through sales of shares.
|
On a quarterly basis, we
disclose Rule 10b5-1 trading plan adoptions by our directors and executive officers in our Annual Report on Form 10-K or quarterly reports on Form 10-Q.
Policy Regarding Change In Control Arrangements
It is our policy that we
will not enter into any agreements with our executive officers that provide the executive officer with severance payments following a change in control unless such agreements provide for a double-trigger termination event (that is, upon the
termination of the executive officer’s employment without cause or for good reason following a change in control).
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68
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Summary of Executive Compensation
The following table sets forth certain information with respect to
compensation for the years ended December 31, 2015, 2014 and 2013 earned by or paid to our President and Chief Executive Officer, our Executive Vice President, Chief Operating Officer and Chief Financial Officer, our three other most
highly-compensated executive officers and two additional individuals who would have been listed as one of our most highly-compensated executive officers but who were no longer serving as an executive officer at the end of our last fiscal year,
referred to as our Named Executive Officers, as determined in accordance with applicable SEC rules.
SUMMARY COMPENSATION TABLE
FOR THE 2015, 2014 AND 2013 FISCAL YEARS
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Name and
Principal Position
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Year
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Salary
($)*
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Bonus
($)
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Stock
Awards
($)(1)
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Option
Awards
($)
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Non-Equity
Incentive Plan
Compensation
($)
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All Other
Compensation
($)
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Total
($)
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Robert M. Calderoni(2)
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2015
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430,556
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—
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18,254,249
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—
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636,818
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(3)
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309,811
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(4)
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19,631,434
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Executive Chairman, Interim Chief Executive Officer and President
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Mark B. Templeton
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2015
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740,057
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—
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8,781,788
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—
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1,147,197
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(5)
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5,175,727
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(6)
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15,844,769
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Former President and
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2014
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900,000
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—
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5,993,263
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—
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965,412
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24,939
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7,883,614
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Chief Executive Officer
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2013
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897,500
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—
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9,951,874
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—
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634,608
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24,051
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11,508,033
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David J. Henshall
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2015
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690,000
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—
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8,523,444
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—
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823,158
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16,010
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(7)
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10,052,612
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Executive Vice President,
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2014
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666,250
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—
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4,941,335
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—
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|
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603,383
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15,778
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|
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6,226,746
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Chief Operating Officer and
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2013
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|
|
|
565,000
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500,000(8)
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4,494,316
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|
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—
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318,185
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15,520
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5,893,021
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Chief Financial Officer
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Robson B. Grieve(9)
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2015
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303,731
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|
|
|
—
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6,274,307
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(10)
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—
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163,998
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(11)
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317,720
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(12)
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7,059,756
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Former Senior Vice President, Customer Experience & Marketing and Chief Marketing Officer
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Christopher S. Hylen(13)
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2015
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|
431,250
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|
|
|
—
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|
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4,810,543
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|
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—
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463,693
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19,148
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(14)
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5,724,634
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Senior Vice President and General Manager, Mobility Apps
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Klaus Oestermann(15)
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2015
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392,173
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—
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4,420,699
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—
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333,293
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(16)
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15,403
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(17)
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5,161,568
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Senior Vice President and General Manager, Delivery Networks
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T. Geir Ramleth(18)
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2015
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|
|
|
580,000
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|
|
|
—
|
|
|
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5,459,553
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|
|
|
—
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686,952
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|
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1,230,245
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(19)
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7,956,750
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Former Chief Strategy Officer, Senior Vice President and General Manager, Workspace Services
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Carlos E. Sartorius(20)
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2015
|
|
|
|
522,531
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|
|
|
—
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|
|
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6,110,608
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|
|
—
|
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621,810
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439,191
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(21)
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|
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7,694,140
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Senior Vice President, Worldwide Sales and Services
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*
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Each year, our salary levels are determined during our first fiscal quarter and become effective April 1, except in 2014 when our Executive Vice President, Chief Operating Officer and Chief Financial Officer’s
salary was determined and became effective on February 1, 2014 upon his promotion to Chief Operating Officer, and in 2015 when our Senior Vice President and General Manager, Delivery Networks’ salary was increased in connection with his
promotion to such position, and our Senior Vice President, Worldwide Sales and Services’ salary was increased in connection with his promotion to such position. The amounts represented in this table reflect salary actually paid during the
fiscal year.
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(1)
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These amounts represent the aggregate grant date fair value of restricted stock unit and restricted stock awards in the year
in which the grant was made. The assumptions we used for calculating the grant date fair value are set forth in Note 7 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015,
which was filed with the SEC on February 18, 2016. These amounts do not represent the actual amounts paid to or realized by the executive officer for these awards during fiscal years 2015, 2014 or 2013. The value as of the grant date for
restricted stock awards is recognized over the number of days of service required for the grant to become vested. In the case of market performance-based and performance-based restricted stock units, the fair value is reported for the probable
outcome, which
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for this purpose is estimated as 100% target achievement. The fair value of awards at the maximum level of achievement for market performance-based and performance-based restricted stock units
for 2015 is as follows: Mr. Calderoni, $4,387,796; Mr. Templeton, $7,609,655; Mr. Henshall, $8,867,890; Mr. Grieve, $5,008,814; Mr. Hylen, $5,008,814; Mr. Oestermann, $4,628,355; Mr. Ramleth, $6,736,560; and
Mr. Sartorius, $6,356,101. The stock award amount for Mr. Templeton includes the incremental fair value of stock awards of $984,417 determined in connection with Mr. Templeton’s retirement. The stock award amount for
Mr. Ramleth includes the incremental fair value of stock awards of $456,273 determined in connection with the termination of Mr. Ramleth’s employment in December 2015.
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(2)
|
Mr. Calderoni was not a Named Executive Officer for the fiscal years ended December 31, 2013 and 2014. Mr. Calderoni has served as a director of our company since 2014; and in July 2015, he was appointed
as our Executive Chairman.
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|
(3)
|
Mr. Calderoni’s non-equity incentive award is prorated to reflect less than one year of service.
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|
(4)
|
Includes 401(k) matches made by our company ($7,950), fees earned or paid in cash to Mr. Calderoni as a director prior to his appointment as Executive Chairman ($33,781), an annual restricted stock unit grant made
to Mr. Calderoni as a director prior to his appointment as Executive Chairman ($263,080) and the value of a company-covered physical examination available to each executive officer ($5,000).
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|
(5)
|
Mr. Templeton received a non-equity incentive award amount prorated through the date of his retirement.
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|
(6)
|
Includes retention bonus paid to Mr. Templeton pursuant to his retention agreement ($4,255,000), reimbursement of legal fees incurred by Mr. Templeton in connection with the negotiation of his retention
agreement ($29,220), plus an additional amount to cover the estimated taxes that Mr. Templeton would incur as a result of his receipt of such reimbursement payment ($21,116), value of premiums due on certain life insurance policies until
Mr. Templeton attains age 65 in 2018 ($75,335), cash surrender value of life insurance policies transferred to Mr. Templeton upon his retirement ($693,517), value of post-retirement benefit continuation ($25,977), premium for supplemental
D&O insurance policy ($50,000), 401(k) matches made by our company ($7,874), premiums for split-dollar life insurance and disability policies ($12,688) and the value of a company-covered physical examination available to each executive officer
($5,000).
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(7)
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Includes 401(k) matches made by our company ($7,950), premiums for split-dollar life insurance and disability policies ($3,060), and the value of a company-covered physical examination available to each executive
officer ($5,000).
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(8)
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Reflects $500,000 cash bonus award to Mr. Henshall for his service as Acting Chief Executive Officer during Mark Templeton’s leave of absence from October 2013 through February 2014.
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(9)
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Mr. Grieve began his employment with Citrix in 2015, and therefore was not a Named Executive Officer for the fiscal years ended December 31, 2013 and 2014. Mr. Grieve’s employment with Citrix ended in
November 2015.
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(10)
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The fiscal 2015 stock award amount for Mr. Grieve includes the $6,274,307 total grant date fair value of those awards, even though the awards were forfeited in full upon the termination of his employment in
November 2015.
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(11)
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Mr. Grieve’s non-equity incentive award is prorated to reflect less than one year of service, and is net of certain recovered relocation benefits.
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(12)
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Includes relocation benefits ($288,489), plus an additional amount to cover the estimated taxes that Mr. Grieve would incur as a result of receipt of such relocation benefits ($24,231) and the value of a
company-covered physical examination available to each executive officer ($5,000). $49,798 of Mr. Grieve’s relocation benefits was repaid to the company.
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(13)
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Mr. Hylen was not a Named Executive Officer for the fiscal years ended December 31, 2013 and 2014.
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(14)
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Includes 401(k) matches made by our company ($7,950), premiums for split-dollar life insurance and disability policies ($6,198), and the value of a company-covered physical examination available to each executive
officer ($5,000).
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(15)
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Mr. Oestermann was not a Named Executive Officer for the fiscal years ended December 31, 2013 and 2014.
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(16)
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Mr. Oestermann’s non-equity incentive award is prorated to reflect participation in two variable cash compensation plans in 2015 due to his promotion to the executive leadership team.
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(17)
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Includes 401(k) matches made by our company ($7,187), premiums for split-dollar life insurance and disability policies ($3,216), and the value of a company-covered physical examination available to each executive
officer ($5,000).
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(18)
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Mr. Ramleth’s employment with Citrix ended in December 2015. Mr. Ramleth was not a Named Executive Officer for the fiscal years ended December 31, 2013 and 2014.
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(19)
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Includes 401(k) matches made by our company ($4,779), premiums for split-dollar life insurance and disability policies ($7,499), payments made pursuant to Mr. Ramleth’s incentive agreement ($1,160,000), value
of post-termination benefit continuation ($20,967), reimbursement of legal fees incurred by Mr. Ramleth in connection with the negotiation of his separation agreement ($32,000) and the value of a company-covered physical examination available
to each executive officer ($5,000).
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(20)
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Mr. Sartorius was not a Named Executive Officer for the fiscal years ended December 31, 2013 and 2014. A portion of Mr. Sartorius’ salary in fiscal 2015 was paid in Swiss Francs (CFH), which was
attributable to his employment by our Swiss subsidiary during the first half of 2015. The CFH portion of Mr. Sartorius’ salary relates to the period from January 1, 2015 through June 30, 2015, and the salary column reflects the
conversion from CFH into U.S. Dollars (USD) based on the average conversion rate between CFH and USD for such six-month period. The value of pension contributions and a leased automobile allowance attributable to the period Mr. Sartorius was
employed by our Swiss subsidiary, which are included in “All Other Compensation” for Mr. Sartorius, were also converted from CFH into U.S. Dollars (USD) based on the average conversion rate between CFH and USD for the same
six-month period.
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(21)
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Includes 401(k) matches made by our company ($3,610), pension contributions while Mr. Sartorius was an employee of our Swiss subsidiary ($62,422), relocation benefits in connection with relocation to the United
States from Switzerland ($203,469), plus an additional amount to cover the estimated taxes that Mr. Sartorius would incur as a result of receipt of such relocation benefits ($15,928), a leased automobile allowance provided pursuant to
Mr. Sartorius’ employment agreement while an employee of our Swiss subsidiary ($30,665), unpaid commissions due upon Mr. Sartorius relocating to the United States ($108,272), tax adviser services ($6,379), plus an additional amount to
cover the estimated taxes that Mr. Sartorius would incur as a result of receipt of such tax adviser benefits ($3,446) and the value of a company-covered physical examination available to each executive officer ($5,000).
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70
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|
Grants of Plan-Based Awards
The following table sets forth certain information with respect to grants of
plan-based awards for the year ended December 31, 2015 to the Named Executive Officers. Grants of equity incentive plan awards to each Named Executive Officer were made pursuant to the 2014 Plan, and grants of non-equity incentive plan awards
to each Named Executive Officer were made pursuant to our Variable Cash Compensation Plan. There can be no assurance that the Grant Date Fair Value of the Stock Awards listed below will ever be realized.
GRANTS OF PLAN-BASED AWARDS TABLE
FOR THE
2015 FISCAL YEAR
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All
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Other
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Stock
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All Other
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Awards:
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Option
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Grant
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Number
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Awards:
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Exercise
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Date Fair
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Estimated Future Payouts
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Estimated Future Payouts
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of
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Number of
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or Base
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Value of
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Comp.
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Under Non-Equity
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Under Equity Incentive
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Shares
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Securities
|
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Price of
|
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Stock and
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Comm.
|
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Incentive Plan Awards
|
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Plan Awards
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of Stock
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Underlying
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Option
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Option
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Name
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Grant
Date
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Action
Date
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Threshold
($)
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Target
($)(1)
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Maximum
($)
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Threshold
($)
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Target
($)(2)
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|
|
Maximum
($)
|
|
|
or Units
(#)
|
|
|
Options
(#)
|
|
Awards
($/Sh)
|
|
Awards ($)
(3)
|
|
|
Robert M. Calderoni
|
|
|
06/01/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
(4)
|
|
|
|
|
|
|
263,080
|
|
|
|
|
08/01/15
|
|
|
|
07/27/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
95,303
|
(5)
|
|
|
|
|
|
|
7,205,860
|
|
|
|
|
08/01/15
|
|
|
|
07/27/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,913
|
|
|
|
23,826
|
(6)
|
|
|
23,826
|
|
|
|
|
|
|
|
|
|
|
|
1,850,327
|
|
|
|
|
08/01/15
|
|
|
|
07/27/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,913
|
|
|
|
23,826
|
(7)
|
|
|
23,826
|
|
|
|
|
|
|
|
|
|
|
|
687,142
|
|
|
|
|
11/02/15
|
|
|
|
10/20/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
102,851
|
(8)
|
|
|
|
|
|
|
8,510,920
|
|
|
|
|
|
|
|
|
10/16/15
|
|
|
|
375,000
|
|
|
|
1,250,000
|
|
|
|
2,500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark B. Templeton
|
|
|
03/30/15
|
|
|
|
02/17/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,182
|
|
|
|
62,364
|
|
|
|
124,728
|
|
|
|
|
|
|
|
|
|
|
|
3,804,828
|
|
|
|
|
03/30/15
|
|
|
|
02/17/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
62,364
|
|
|
|
|
|
|
|
4,722,202
|
|
|
|
|
|
|
|
|
02/17/15
|
|
|
|
360,750
|
|
|
|
1,202,500
|
|
|
|
2,405,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David J. Henshall
|
|
|
03/30/15
|
|
|
|
02/17/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,062
|
|
|
|
28,124
|
|
|
|
56,248
|
|
|
|
|
|
|
|
|
|
|
|
1,715,845
|
|
|
|
|
03/30/15
|
|
|
|
02/17/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,124
|
|
|
|
|
|
|
|
1,800,498
|
|
|
|
|
09/01/15
|
|
|
|
08/31/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000
|
(9)
|
|
|
|
|
|
|
2,289,000
|
|
|
|
|
10/01/15
|
|
|
|
09/24/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,500
|
|
|
|
35,000
|
(10)
|
|
|
35,000
|
|
|
|
|
|
|
|
|
|
|
|
2,718,100
|
|
|
|
|
|
|
|
|
02/17/15
|
|
|
|
208,500
|
|
|
|
695,000
|
|
|
|
1,390,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robson B. Grieve(11)
|
|
|
01/26/15
|
|
|
|
01/10/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
|
|
|
|
2,438,400
|
|
|
|
|
03/30/15
|
|
|
|
02/17/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,796
|
|
|
|
15,591
|
|
|
|
31,182
|
|
|
|
|
|
|
|
|
|
|
|
951,207
|
|
|
|
|
09/01/15
|
|
|
|
08/31/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
(9)
|
|
|
|
|
|
|
981,000
|
|
|
|
|
10/01/15
|
|
|
|
09/24/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
(9)
|
|
|
|
|
|
|
350,500
|
|
|
|
|
10/01/15
|
|
|
|
09/24/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
20,000
|
(10)
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
1,553,200
|
|
|
|
|
|
|
|
|
01/10/15
|
|
|
|
71,100
|
|
|
|
237,000
|
|
|
|
474,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christopher S. Hylen
|
|
|
03/30/15
|
|
|
|
02/17/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,796
|
|
|
|
15,591
|
|
|
|
31,182
|
|
|
|
|
|
|
|
|
|
|
|
951,207
|
|
|
|
|
03/30/15
|
|
|
|
02/17/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,591
|
|
|
|
|
|
|
|
998,136
|
|
|
|
|
09/01/15
|
|
|
|
08/31/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(9)
|
|
|
|
|
|
|
1,308,000
|
|
|
|
|
10/01/15
|
|
|
|
09/24/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
20,000
|
(10)
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
1,553,200
|
|
|
|
|
|
|
|
|
02/17/15
|
|
|
|
117,450
|
|
|
|
391,500
|
|
|
|
783,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Klaus Oestermann
|
|
|
03/30/15
|
|
|
|
02/17/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,237
|
|
|
|
12,473
|
|
|
|
24,946
|
|
|
|
|
|
|
|
|
|
|
|
760,978
|
|
|
|
|
03/30/15
|
|
|
|
02/17/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,473
|
|
|
|
|
|
|
|
798,521
|
|
|
|
|
09/01/15
|
|
|
|
08/31/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(9)
|
|
|
|
|
|
|
1,308,000
|
|
|
|
|
10/01/15
|
|
|
|
09/24/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
20,000
|
(10)
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
1,553,200
|
|
|
|
|
|
|
|
|
08/31/15
|
|
|
|
114,750
|
|
|
|
382,500
|
|
|
|
765,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
T. Geir Ramleth
|
|
|
03/30/15
|
|
|
|
02/17/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,693
|
|
|
|
23,886
|
(12)
|
|
|
46,772
|
|
|
|
|
|
|
|
|
|
|
|
1,426,780
|
|
|
|
|
09/01/15
|
|
|
|
08/31/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(9)
|
|
|
|
|
|
|
1,891,250
|
|
|
|
|
10/01/15
|
|
|
|
09/24/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
|
25,000
|
(12)
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
1,941,500
|
|
|
|
|
|
|
|
|
02/17/15
|
|
|
|
174,000
|
|
|
|
580,000
|
|
|
|
1,160,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carlos E. Sartorius
|
|
|
03/30/15
|
|
|
|
02/17/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,134
|
|
|
|
20,268
|
|
|
|
40,536
|
|
|
|
|
|
|
|
|
|
|
|
1,236,551
|
|
|
|
|
03/30/15
|
|
|
|
02/17/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,268
|
|
|
|
|
|
|
|
1,297,557
|
|
|
|
|
09/01/15
|
|
|
|
08/31/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(9)
|
|
|
|
|
|
|
1,635,000
|
|
|
|
|
10/01/15
|
|
|
|
09/24/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
|
25,000
|
(10)
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
1,941,500
|
|
|
|
|
|
|
|
|
05/27/15
|
|
|
|
157,500
|
|
|
|
525,000
|
|
|
|
1,050,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
On February 11, 2016, the Compensation Committee determined that the reported revenue target was 98.2% attained and the
non-GAAP
corporate operating margin target was 108.2%
attained, resulting in a payout of 118.4% and in the following variable cash compensation awards: Mr. Templeton received $1,147,197; Mr. Henshall received $823,158; Mr. Calderoni received $636,818; Mr. Sartorius received
$621,810; Mr. Ramleth received $686,952; Mr. Grieve received $213,796; Mr. Hylen received $463,693; and Mr. Oestermann received $333,293. See the column labelled “Non-Equity Incentive Plan Compensation” in the Summary
Compensation Table included in this Proxy Statement. Mr. Calderoni’s variable cash compensation award was pro-rated from the date he began service as Executive Chairman. The variable cash compensation awards granted to Messrs. Templeton
and Grieve were
pro-rated
based on their respective end dates. Mr. Oestermann’s variable cash compensation award reflects an adjustment for participation in two plans in 2015, due to his promotion to
the executive leadership team during 2015.
|
|
(2)
|
The “Estimated Future Payouts Under Equity Incentive Plan Awards” columns represent the minimum, target, and maximum number of restricted stock units that may vest pursuant to 2015 market performance-based and
performance-based restricted stock unit agreements. Except where otherwise noted, the attainment level under the market performance-based awards will be based on the total return to shareholders compared to the return on the XCMP over the three-year
performance period ending December 31, 2017.
|
|
(3)
|
The grant date fair value of awards in this column reflects the fair value of such awards, excluding estimated forfeitures. The assumptions we used for calculating the grant date fair value are set forth in Note 7 to
the financial statements filed with our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, which was filed with the SEC on February 18, 2016. In the case of market performance-based and performance-based restricted
stock units, the fair value is reported for the probable outcome after the three-year performance period, which for this purpose is 100% achievement.
|
|
(4)
|
Service-based restricted stock units vesting in 12 equal monthly installments with the first such installment having vested on July 1, 2015, that were granted in connection with Mr. Calderoni’s service as
a Director. Mr. Calderoni has elected to defer receipt of 100% of the vested units until his separation from service from the Board of Directors, pursuant to the Outside Directors Deferred Compensation Program previously established by the
company.
|
|
(5)
|
Service-based restricted stock units that were granted in connection with Mr. Calderoni’s service as Executive Chairman, and which vest in 18 monthly installments as follows: 5,294 units vest on the last day
of each month beginning on August 31, 2015, through December 31, 2016, and 5,305 units vest on January 31, 2017.
|
|
(6)
|
Performance-based restricted stock units that were granted in connection with Mr. Calderoni’s appointment as Executive Chairman; represents the target number of restricted stock units that will vest if our
total shareholder return over the 18 month period ending on January 31, 2017 is 20%.
|
|
(7)
|
Performance-based restricted stock units that were granted in connection with Mr. Calderoni’s appointment as Executive Chairman; represents the target number of restricted stock units that will vest on
December 31, 2016, if our non-GAAP operating margin for fiscal year 2016 is 28%.
|
|
(8)
|
Service-based restricted stock award vesting in 12 equal monthly installments, with the first such installment having vested on November 30, 2015, and the remainder of the installments vesting on the final day of
each calendar month thereafter, subject to Mr. Calderoni’s continued service (including service on our Board of Directors), that were granted in connection with Mr. Calderoni’s appointment as Interim Chief Executive Officer and
President.
|
|
(9)
|
Service-based restricted stock units granted in connection with the executive incentive program vesting in two equal installments, with 50% having vested on April 1, 2016, and 50% vesting on October 1, 2016.
|
|
(10)
|
Performance-based restricted stock units granted in connection with the executive incentive program; represents the target number of restricted stock units that will vest on December 31, 2016, if our non-GAAP
operating margin for fiscal year 2016 is 28%.
|
|
(11)
|
Mr. Grieve forfeited all his restricted stock units upon his departure from our company in November 2015.
|
|
(12)
|
Mr. Ramleth forfeited these restricted stock units upon his departure from our company in December 2015.
|
|
|
|
|
|
72
|
|
|
Outstanding Equity Awards
The following table sets forth certain information with respect to the outstanding
equity awards at December 31, 2015 for each of the Named Executive Officers.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2015 TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Number of
|
|
|
Payout Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
Unearned
|
|
|
of Unearned
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Shares or
|
|
|
Shares, Units
|
|
|
Shares, Units
|
|
|
|
|
Number of Securities
|
|
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Units of
|
|
|
or Other
|
|
|
or Other
|
|
|
|
|
Underlying Unexercised
|
|
|
Option
|
|
|
|
|
|
|
|
Units of Stock
|
|
|
Stock That
|
|
|
Rights That
|
|
|
Rights That
|
|
|
|
|
|
|
|
Options
|
|
|
Exercise
|
|
|
Option
|
|
|
|
|
That Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
|
|
|
|
|
|
(#)
|
|
|
Price
|
|
|
Expiration
|
|
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
($)
|
|
|
Date(1)
|
|
|
|
|
(#)
|
|
|
($)(2)
|
|
|
(#)
|
|
|
($)(2)
|
|
|
Robert M. Calderoni
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,666
|
(3)
|
|
|
504,283
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,998
|
(4)
|
|
|
151,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
68,883
|
(5)
|
|
|
5,207,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
85,709
|
(6)
|
|
|
6,483,886
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,826
|
(7)
|
|
|
1,802,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,826
|
(8)
|
|
|
1,802,437
|
|
|
Mark B. Templeton
|
|
|
61,250
|
|
|
|
—
|
|
|
|
84.34
|
|
|
|
4/29/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
David J. Henshall
|
|
|
26,250
|
|
|
|
—
|
|
|
|
84.34
|
|
|
|
4/29/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,243
|
(9)
|
|
|
699,233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,096
|
(10)
|
|
|
2,125,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,124
|
(11)
|
|
|
2,127,581
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000
|
(12)
|
|
|
2,647,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,729
|
(13)
|
|
|
2,097,699
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,144
|
(14)
|
|
|
3,188,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,124
|
(15)
|
|
|
2,127,581
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000
|
(8)
|
|
|
2,647,750
|
|
|
Robson B. Grieve
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Christopher S. Hylen
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,333
|
(16)
|
|
|
1,008,641
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,238
|
(10)
|
|
|
850,155
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,591
|
(11)
|
|
|
1,179,459
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(12)
|
|
|
1,513,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,858
|
(14)
|
|
|
1,275,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,591
|
(15)
|
|
|
1,179,459
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(8)
|
|
|
1,513,000
|
|
|
Klaus Oestermann
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,666
|
(9)
|
|
|
201,683
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,333
|
(17)
|
|
|
176,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,057
|
(10)
|
|
|
382,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,473
|
(11)
|
|
|
943,582
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(12)
|
|
|
1,513,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,667
|
(13)
|
|
|
201,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,528
|
(14)
|
|
|
191,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,473
|
(15)
|
|
|
943,582
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(8)
|
|
|
1,513,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Number of
|
|
|
Payout Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
Unearned
|
|
|
of Unearned
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Shares or
|
|
|
Shares, Units
|
|
|
Shares, Units
|
|
|
|
|
Number of Securities
|
|
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Units of
|
|
|
or Other
|
|
|
or Other
|
|
|
|
|
Underlying Unexercised
|
|
|
Option
|
|
|
|
|
|
|
|
Units of Stock
|
|
|
Stock That
|
|
|
Rights That
|
|
|
Rights That
|
|
|
|
|
|
|
|
Options
|
|
|
Exercise
|
|
|
Option
|
|
|
|
|
That Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
|
|
|
|
|
|
(#)
|
|
|
Price
|
|
|
Expiration
|
|
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
($)
|
|
|
Date(1)
|
|
|
|
|
(#)
|
|
|
($)(2)
|
|
|
(#)
|
|
|
($)(2)
|
|
|
T. Geir Ramleth
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(18)
|
|
|
2,269,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,386
|
(19)
|
|
|
1,769,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(12)
|
|
|
1,891,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(20)
|
|
|
1,891,250
|
|
|
Carlos E. Sartorius
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,971
|
(9)
|
|
|
224,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,214
|
(10)
|
|
|
318,789
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,333
|
(21)
|
|
|
252,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,268
|
(11)
|
|
|
1,533,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(12)
|
|
|
1,891,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,971
|
(13)
|
|
|
224,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,107
|
(14)
|
|
|
159,395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,268
|
(15)
|
|
|
1,533,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(8)
|
|
|
1,891,250
|
|
|
(1)
|
Unless otherwise indicated in the table, options vest at a rate of 1/3 of the shares underlying the stock option one year from the date of grant and at a rate of 1/36 monthly thereafter. Vesting, in all applicable
cases, will be rounded up to the nearest whole share with the balance vesting on the last vesting date.
|
|
(2)
|
Based on a per share price of $75.65, which was the closing price per share of our common stock on the last business day of the 2015 fiscal year (December 31, 2015).
|
|
(3)
|
Restricted stock units that vest in three annual installments, with 33.4% having vested on July 15, 2015, 33.3% vesting on July 15, 2016, and 33.3% vesting on July 15, 2017. Mr. Calderoni has elected
to defer receipt of 100% of the vested units until his separation from service from the Board of Directors, pursuant to the Outside Directors Deferred Compensation Program previously established by the company.
|
|
(4)
|
Restricted stock units that vest in 12 equal monthly installments, with the first such installment having vested on July 1, 2015. Mr. Calderoni has elected to defer receipt of 100% of the vested units until
his separation from service from the Board of Directors, pursuant to the Outside Directors Deferred Compensation Program previously established by the company.
|
|
(5)
|
Restricted stock units that vest in 18 monthly installments as follows: 5,294 units vest on the last day of each month beginning on August 31, 2015, through December 31, 2016, and 5,305 units vest on
January 31, 2017.
|
|
(6)
|
Shares of restricted stock that vest in 12 equal monthly installments, with the first such installment having vested on November 30, 2015, and the remainder of the installments vesting on the final day of each
calendar month thereafter, subject to Mr. Calderoni’s continued service (including service on the Board of Directors).
|
|
(7)
|
Represents the target number of restricted stock units that will vest if our total shareholder return over the 18 month period ending on January 31, 2017 is 20%.
|
|
(8)
|
Represents the target number of restricted stock units that will vest on December 31, 2016, if our operating margin is 28%.
|
|
(9)
|
Restricted stock units that vest in three annual installments, with 33.4% having vested on March 29, 2014, 33.3% having vested on March 29, 2015, and 33.3% having vested on March 29, 2016.
|
|
(10)
|
Restricted stock units that vest in three annual installments, with 33.4% having vested on March 28, 2015, 33.3% having vested on March 28, 2016, and 33.3% vesting on March 28, 2017.
|
|
(11)
|
Restricted stock units that vest in three annual installments, with 33.4% having vested on March 30, 2016, 33.3% vesting on March 30, 2017, and 33.3% vesting on March 30, 2018.
|
|
(12)
|
Restricted stock units that vest in two equal installments, with 50% having vested on April 1, 2016 and 50% vesting on October 1, 2016.
|
|
(13)
|
Represents the target number of restricted stock units that would have vested on December 31, 2015, if the percentage point difference of our return and the XCMP total stockholder return was 0%. On
February 11, 2016, it was determined that no payout was achieved.
|
|
(14)
|
Represents the target number of restricted stock units that will vest on December 31, 2016, if the percentage point difference of our return and the XCMP total stockholder return is 0%.
|
|
(15)
|
Represents the target number of restricted stock units that will vest on December 31, 2017, if the percentage point difference of our shareholder return and the XCMP total stockholder return is 0%.
|
|
|
|
|
|
74
|
|
|
|
(16)
|
Restricted stock units that vest in three annual installments, with 33.4% having vested on August 1, 2014, 33.3% having vested on August 1, 2015, and 33.3% vesting on August 1, 2016.
|
|
(17)
|
Restricted stock units that vest in three annual installments, with 33.4% having vested on December 2, 2014, 33.3% having vested on December 2, 2015, and 33.3% vesting on December 2, 2016.
|
|
(18)
|
Restricted stock units that vest in three annual installments, with 33.4% having vested on December 11, 2015, 33.3% vesting on December 11, 2016, and 33.3% vesting on December 11, 2017. Mr. Ramleth
forfeited 15,000 of these restricted stock units upon his departure from our company in December 2015.
|
|
(19)
|
Represents the target number of restricted stock units that will vest on December 31, 2016, if our operating margin is 28%. Mr. Ramleth forfeited these restricted stock units upon his departure from our company in
December 2015.
|
|
(20)
|
Represents the target number of restricted stock units that will vest on December 31, 2017, if the percentage point difference of our shareholder return and the XCMP total stockholder return is 0%. Mr. Ramleth forfeited
these restricted stock units upon his departure from our company in December 2015.
|
|
(21)
|
Restricted stock units that vest in three annual installments, with 33.4% having vested on October 1, 2015, 33.3% vesting on October 1, 2016, and 33.3% vesting on October 1, 2017.
|
Option Exercises and Stock Vested
The following table sets forth certain information regarding stock option exercises and restricted stock unit and restricted stock vesting, during the year ended
December 31, 2015 under our equity incentive plans for our Named Executive Officers.
OPTION EXERCISES AND STOCK VESTED TABLE
FOR THE 2015 FISCAL YEAR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
Number of Shares
|
|
|
Value
|
|
|
Number of Shares
|
|
|
Value
|
|
|
|
|
Acquired on
|
|
|
Realized on
|
|
|
Acquired on
|
|
|
Realized on
|
|
|
|
|
Exercise
|
|
|
Exercise
|
|
|
Vesting
|
|
|
Vesting
|
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)(1)
|
|
|
Robert M. Calderoni
|
|
|
—
|
|
|
|
—
|
|
|
|
139,909
|
|
|
|
11,226,319
|
|
|
Mark B. Templeton
|
|
|
226,250
|
|
|
|
2,845,272
|
|
|
|
175,949
|
|
|
|
13,317,244
|
|
|
David J. Henshall
|
|
|
26,250
|
|
|
|
116,823
|
|
|
|
32,491
|
|
|
|
2,067,325
|
|
|
Robson B. Grieve
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Christopher S. Hylen
|
|
|
—
|
|
|
|
—
|
|
|
|
20,953
|
|
|
|
1,490,436
|
|
|
Klaus Oestermann
|
|
|
6,250
|
|
|
|
37,250
|
|
|
|
11,071
|
|
|
|
746,613
|
|
|
T. Geir Ramleth
|
|
|
—
|
|
|
|
—
|
|
|
|
15,000
|
|
|
|
1,126,200
|
|
|
Carlos E. Sartorius
|
|
|
—
|
|
|
|
—
|
|
|
|
9,745
|
|
|
|
631,928
|
|
|
(1)
|
Based on the closing price per share of our common stock on the date upon which the restricted stock units or shares of restricted stock, as applicable, vested.
|
Nonqualified Deferred Compensation
The following table sets forth certain information regarding non-tax qualified compensation deferred during the year
ended December 31, 2015, under our equity incentive plans for the Named Executive Officers. The deferred compensation consists of shares of our common stock that will be issued with respect to vested stock units under a long-term incentive
program, or LTIP, that we instituted in 2009 and non-employee director restricted stock units granted to Robert M. Calderoni during 2014 and 2015.
The LTIP’s
design and structure were intended to, and ultimately did, reward executive officers for generating both relative and absolute shareholder returns. The number of vested stock units was determined after the conclusion of a three-year period ending
December 31, 2011, subject to employment of the executive officer by us
throughout the three-year period. The number of shares of common stock issuable upon settlement of the LTIP restricted stock units was determined by comparing the performance of our common stock
to the performance of the specified market indices over the same three-year period. Although the LTIP stock units have vested, the units will not be settled in shares of our common stock until the earliest of (1) six months and one day
following termination of the executive officer’s employment for any reason other than cause, (2) the executive officer’s death, or (3) the effective date of a change in control of our company.
Mr. Calderoni’s non-employee director restricted stock units are deferred pursuant to the Outside Directors’ Deferred Compensation Program described on page
28.
NONQUALIFIED DEFERRED COMPENSATION
TABLE
FOR THE 2015 FISCAL YEAR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
Registrant
|
|
Aggregate
|
|
Aggregate
|
|
Aggregate
|
|
|
|
Contributions
|
|
Contributions
|
|
Earnings
|
|
Withdrawals/
|
|
Balance at
|
|
|
|
in Last FY
|
|
in Last FY
|
|
in Last FY
|
|
Distributions
|
|
Last FYE
|
|
Name
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Robert M. Calderoni
|
|
|
302,600
|
(1)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,059,100
|
(1)
|
|
Mark B. Templeton
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,870,719
|
(2)
|
|
David J. Henshall
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,998,085
|
(2)
|
|
Robson B. Grieve
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Christopher S. Hylen
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Klaus Oestermann
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
T. Geir Ramleth
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Carlos E. Sartorius
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
(1)
|
Mr. Calderoni elected to defer the receipt of all of his 2014 and 2015 non-employee director restricted stock unit grants. Based on a per share price of $75.65, which was the closing price per share of our common
stock on December 31, 2015, the last business day of the 2015 fiscal year. The grant date fair value of the 2015 non-employee director restricted stock unit grant is included in the “Stock Awards” column of the Summary Compensation Table
on page 69.
|
|
(2)
|
Based on a per share price of $75.65, which was the closing price per share of our common stock on December 31, 2015, the last business day of the 2015 fiscal year, and reflects the balance of restricted stock
units currently outstanding that were issued under the LTIP that vested on December 31, 2011, net of any underlying shares that were withheld to satisfy minimum tax withholding obligations that arose upon vesting. The number of restricted stock
units on a net basis for each of the Named Executive Officers is as follows: Mr. Templeton, 117,260 units; Mr. Henshall, 39,631 units; and Messrs. Calderoni, Grieve, Hylen, Oestermann, Ramleth and Sartorius, no units. The grant date fair
value of the LTIP awards was included in the “
Stock Awards
” column of the
Summary Compensation Table
for 2009.
|
|
|
|
|
|
76
|
|
|
Potential Payments upon Termination or Change in Control
We have change in control and severance arrangements with our Named Executive Officers that provide severance and other
benefits to our Named Executive Officers in the event of the termination of their employment under certain circumstances. Set forth below is a summary of these arrangements.
Former President and Chief Executive Officer
As discussed above, on
October 12, 2015, we entered into a retention agreement with Mr. Templeton following the announcement of his intention to retire and our commencement of a search for a new Chief Executive Officer. The retention agreement provided for
Mr. Templeton to receive certain benefits upon the earlier of the date that a permanent, interim or acting Chief Executive Officer commenced employment with Citrix or the date of termination of his employment by the Board of Directors without
“cause” (as defined in the change in control agreements for the other Named Executive Officers described below). As a result, upon the date that Mr. Calderoni became our Interim Chief Executive Officer, Mr. Templeton retired from
our company and became entitled to receive a cash payment equal to two times the sum of his annual base salary and target variable cash compensation. In addition, Mr. Templeton received immediate vesting of all of his equity awards with
service-based
vesting, consisting of 104,042 restricted stock units. In addition, Mr. Templeton was entitled to continued health insurance coverage until his
65
th
birthday in 2018, and we paid the premiums on Mr. Templeton’s executive life insurance policies owned by Citrix through Mr. Templeton’s 65
th
birthday in 2018, which policies were transferred from Citrix to Mr. Templeton following his retirement. Finally, we purchased for Mr. Templeton’s benefit a supplemental directors and
officers liability insurance policy.
The total value of the payments and benefits provided to Mr. Templeton under the terms of the retention agreement was
approximately $13,759,641, which consisted of the following:
|
|
•
|
|
retention bonus of $4,255,000;
|
|
|
•
|
|
vesting of service-based equity awards of $8,609,476 (consisting of 104,042 restricted stock units multiplied by a per share price of $82.75, which was the closing price per share of our common stock on the vesting
date);
|
|
|
•
|
|
health benefits continuation of approximately $25,977;
|
|
|
•
|
|
premiums of $75,335 related to Mr. Templeton’s life insurance policies maintained by Citrix;
|
|
|
•
|
|
transfer to Mr. Templeton upon his retirement of three Citrix-owned whole life insurance policies with an accumulated cash surrender value of $693,517;
|
|
|
•
|
|
one-time cost to Citrix of $50,000 for premiums for a supplemental directors and officers liability insurance policy for the benefit of Mr. Templeton; and
|
|
|
•
|
|
reimbursement of legal fees in an amount of $29,220, plus an additional amount of $21,116 to cover the estimated taxes that Mr. Templeton would incur as a result of his receipt of such reimbursement payment.
|
Such payments and benefits were subject to the execution of a separation and release agreement by Mr. Templeton containing, among other
provisions, a general release of claims in favor of Citrix and a limited release of claims in favor of Mr. Templeton.
Executive Chairman and Former Interim
Chief Executive Officer and President
Former Employment Agreement
We entered into an employment agreement with Mr. Calderoni on October 20, 2015, in connection with his appointment as our Interim Chief Executive Officer and
President. The employment agreement terminated in accordance with its terms upon the commencement of employment of Mr. Tatarinov as our President and Chief Executive Officer on January 25, 2016.
The employment agreement provided for Mr. Calderoni to be paid a base salary of $1,000,000. In addition, Mr. Calderoni was entitled to participate in our
executive variable cash compensation program at an annual target variable cash payment of 125% of his base salary and a maximum variable cash payment of 200% of his base salary. This amount was prorated for the period beginning on his start date as
our Executive Chairman on July 24, 2015, and ending upon the commencement of employment of our permanent Chief Executive Officer on January 25, 2016.
Pursuant to the employment agreement, in the event that Mr. Calderoni’s employment was terminated without
“cause” or if he resigned his position for “good reason” upon or within the 18-month period following a “change in control” (such definitions were substantially the same as the definitions included in the change in
control agreements for the other Named Executive Officers described below), he would have been entitled to receive a lump sum payment equal to one and a half times the sum of his annual base salary plus his target variable cash compensation for the
then-current fiscal year, and a lump sum cash payment of $3,375,000 for being subject to a non-competition and non-solicitation agreement extending for 18 months following the date of termination of his employment. In addition, Mr. Calderoni
would have been entitled to continued health coverage for 18 months, and accelerated vesting of the unvested portion of the restricted stock award granted upon his appointment as Interim Chief Executive Officer and President. The employment
agreement did not provide for any tax gross-up payments or any severance payments not in connection with a change in control.
The estimated total value of the
payments and benefits that would have been provided to Mr. Calderoni under the terms of his employment agreement if his employment as Interim Chief Executive Officer and President was terminated without cause or if he resigned from these
positions for good reason following a change in control was $13,271,469, assuming such change in control and terminating event occurred on December 31, 2015. Such payments and benefits would have consisted of the following:
|
|
•
|
|
cash severance of $3,375,000;
|
|
|
•
|
|
lump sum cash payment of $3,375,000 for a non-competition and non-solicitation agreement extending for 18 months following the date of termination;
|
|
|
•
|
|
vesting of the unvested portion of his restricted stock award of $6,483,886 (consisting of 85,709 shares of restricted stock multiplied by a per share price of $75.65, which was the closing price per share of our common
stock on December 31, 2015); and
|
|
|
•
|
|
health benefits continuation of approximately $37,583.
|
The foregoing severance payments and benefits under the
employment agreement were subject to the execution by Mr. Calderoni of a separation and release agreement containing a general release of claims in favor of Citrix. As
noted above, Mr. Calderoni is no longer entitled to any payments or benefits under this employment agreement.
Equity Awards
Mr. Calderoni was granted a
mix of service- and performance-based restricted stock units in connection with his appointment as Executive Chairman in July 2015, all of which fully vest upon a change in control. In addition, if Mr. Calderoni’s service relationship with
our company terminates as a result of his non-election as a director by our shareholders, the failure of the Board of Directors to nominate him for re-election at a subsequent annual meeting of shareholders, or his resignation or agreement not to
stand for re-election at the request of the Board of Directors (where he is otherwise willing and able to continue in such capacity), Mr. Calderoni’s rights in such service-based awards will vest in full, and he will remain eligible to
earn such performance-based awards at the end of the performance period based on our achievement of the applicable performance metrics. If Mr. Calderoni’s service relationship with our company terminates as a result of his death or
disability, Mr. Calderoni also will not forfeit such performance-based awards but will remain eligible to earn the awards on a prorated basis based on the date of termination of his service and the number of months in the performance period. As
of December 31, 2015, Mr. Calderoni held 68,883 of such service-based restricted stock units that remained subject to vesting with a value of $5,210,999 and 47,652 of such performance-based restricted stock units with a value of $3,604,874
(in each case based on a per share price of $75.65, which was the closing price per share of our common stock on December 31, 2015).
Also in connection with
his appointment as Interim Chief Executive Officer and President of Citrix, Mr. Calderoni received an equity grant consisting of 102,851 shares of restricted stock. Any unvested portion of the restricted stock award will vest in full upon the
involuntary termination of his service as a director as described above or upon his death or disability. In addition, if Mr. Calderoni’s status is that of a director and not an employee immediately prior to a change in control, his rights
in any unvested shares of such restricted stock will vest in full upon the change in control. As of December 31, 2015, Mr. Calderoni held 85,709 of such shares of restricted stock that remained subject to vesting with a value of $6,483,886
(based on a per share price of $75.65, which was the closing price per share of our common stock on December 31, 2015).
|
|
|
|
|
78
|
|
|
Other Named Executive Officers
Change in Control Agreements
We have entered into change in control agreements with our executive officers (other than
Mr. Calderoni). Specifically, these agreements continue in full force until the earliest of the following events:
|
|
•
|
|
the date we terminate the employment of the executive officer for “cause” or the failure by the executive officer to perform his full-time duties by reason of his death or disability;
|
|
|
•
|
|
the resignation or termination of the executive officer’s employment for any reason prior to a change in control;
|
|
|
•
|
|
the termination of the executive officer’s employment with us after a change in control for any reason other than the occurrence of a terminating event; or
|
|
|
•
|
|
the date which is 18 months after a change in control if the executive officer is still employed by us.
|
These
agreements are intended to provide for continuity of management during a change in control and align the interest of our executive officers with those of our shareholders so as to maximize the value to shareholders from any such change in control.
These agreements provide for certain benefits in the event that the executive officer’s employment is terminated following a change in control of our company, including severance payments, benefit continuation and vesting acceleration of
outstanding equity-based awards.
In the event that, during the twelve-month period following a change in control, any of these executive officers are terminated,
other than for cause, or any executive officer terminates his employment for “good reason,” such executive officer is entitled to receive a lump sum payment equal to one and a half times his annual base salary plus his target variable cash
compensation for the then-current fiscal year, both determined as of the date such executive officer’s employment is terminated or, if higher, as of immediately prior to the change in control. Additionally, all stock options and other
equity-based awards, such as restricted stock units, granted to the executive officers will immediately accelerate and become fully exercisable, and the executive officers will receive certain benefits, including health, dental and life insurance,
for 18 months following the date of termination.
Under the change in control agreements, a “change in control” would include any of the following events:
|
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any “person,” as defined in the Securities Exchange Act of 1934, as amended, acquires 30% or more of our voting securities;
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the consummation of a consolidation, merger or sale or other disposition of all or substantially all of our assets in which our shareholders would beneficially own less than 50% of our voting securities after such
transaction;
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a majority of our incumbent directors are replaced; or
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our shareholders approve a plan or proposal for our liquidation or dissolution.
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Termination of the executive
officer’s employment by Citrix for “cause” includes a termination of the executive officer’s employment as a result of:
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willful disclosure of material trade secrets or other material confidential information related to our business;
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willful and continued failure substantially to perform the executive officer’s same duties with Citrix as in existence prior to the change in control (subject to notice and a period for the executive officer to
cure such failure); or
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•
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willful and knowing participation in releasing false or materially misleading financial statements or submission of a false certification to the Securities and Exchange Commission.
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Termination of the executive officer’s employment by the executive officer for “good reason” includes a termination of the executive officer’s
employment as a result of:
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an adverse change, not consented to by the executive officer, in the nature or scope of the executive officer’s responsibilities, authorities, powers, functions or duties immediately prior to the change in control;
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a reduction in the executive officer’s annual base salary or target variable cash compensation, except for across-the-board reductions of annual base salary similarly affecting all executive officers of Citrix;
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the relocation of our offices at which the executive officer is principally employed by more than 35 miles;
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the failure by Citrix to obtain an effective agreement from any successor to assume and agree to perform the change in control agreement; or
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the failure by the Company to provide benefits reasonably comparable to those in effect immediately prior to the change in control.
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Each of our executive officers is also subject to the terms of a non-solicitation, non-compete and confidentiality and employee non-disclosure agreement with us, and
the terms of these agreements survive the termination of the executive officer’s employment after a change in control for a period of one year.
In the event
that any payments made in connection with a change in control or termination would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, the payments to our executive officers would be reduced to the maximum amount
that can be paid under the Code without the imposition of an excise tax under Section 4999 of the Internal Revenue Code, but only if such reduction provides a higher benefit on an after-tax basis to our executive officers. Under no
circumstances would we provide any “gross-up” payments to our executive officers in connection with a change in control.
2015
Executive Incentive Program
As discussed above, during 2015, we implemented an executive incentive program and as part of this program, we entered into
incentive agreements with Messrs. Henshall, Hylen, Oestermann, Ramleth and Sartorius. Under the terms of the incentive agreements, these executive officers will receive, and in the case of Mr. Ramleth, has received, a severance amount equal to
the sum of such executive officer’s then current annual base salary and target variable cash compensation if his employment is terminated by Citrix without “cause” or by the officer for “good reason” prior to
January 25, 2017, the first anniversary of the start date of our new Chief Executive Officer. In such event, the executive officer also will vest, and in the case of Mr. Ramleth, has vested, in the portion of his equity awards with
service-based vesting that would have vested within the 12-month period following his date of termination, and he will be entitled, and in the case of Mr. Ramleth, is so entitled, to continued health insurance coverage for 12 months following
his date of termination. Such payments and benefits are subject to the execution of a separation and release agreement containing a general release of claims in favor of Citrix. If the executive officer becomes eligible to receive severance payments
under his change in control
agreement, he will not be eligible to also receive severance payments under the incentive agreement.
For
purposes of the incentive agreements, the definition of “cause” is the same as the definition used in the change in control agreements as described above. Termination of the executive officer’s employment by the executive officer for
“good reason” under the incentive agreement includes a termination of the executive officer’s employment as a result of:
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a substantial reduction, not consented to by the executive officer, in the nature or scope of the executive officer’s responsibilities, authorities, powers, functions or duties;
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an adverse change in the executive officer’s title not consented to by the executive officer;
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a reduction in the executive officer’s annual base salary or target variable cash compensation, except for across-the-board reductions of annual base salary similarly affecting all executive officers of Citrix;
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the business of Citrix as to which the executive officer’s employment then relates is spun off by Citrix and the executive officer was not offered the positions of President and Chief Executive Officer of the
spun-off entity; or
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the relocation of our offices at which the executive officer is principally employed by more than 35 miles.
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In
February 2016, we entered into an employment agreement with Mr. Hylen with respect to his serving as the Chief Executive Officer of the new public company expected to be created in connection with the proposed spinoff of our GoTo family of
products from Citrix. See the discussion above under “
Other Named Executive Officers Cash Compensation – Base Salary and Variable Cash Compensation
” for further information.
At that time we entered into the employment agreement with Mr. Hylen, his incentive agreement was amended to provide certain benefits specifically related to the
proposed separation of the GoTo business. Mr. Hylen will be entitled to a $150,000 cash bonus payable upon completion of the spinoff or a spin-merge transaction involving the GoTo business if he remains employed with Citrix through such date.
Also, if Mr. Hylen’s employment is terminated on account of the spinoff or a spin-merge transaction involving the GoTo business, he will be entitled to payment of his target variable cash compensation for
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80
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that year on a prorated basis. Upon the effective date of the spinoff or
spin-merge
transaction, he also will vest in the unvested portion of the 20,000
service-based restricted stock units granted to him on September 1, 2015, and subject to Compensation Committee approval, accelerated vesting of the 20,000 performance-based restricted stock units granted to him on October 1, 2015.
As a result of the amended incentive agreement, Mr. Hylen will be entitled to receive a severance amount equal to the sum of his then current annual base salary,
his target variable cash compensation, and $2,000,000 if his employment is terminated by Citrix without “cause” or by Mr. Hylen for “good reason” in connection with a spin-merge transaction involving the GoTo business. In
such event, he also will vest in the portion of his equity awards with service-based vesting and his equity awards with performance-based vesting will be deemed earned either at target or based on actual achievement, if higher (the foregoing will
not apply to his 2016 annual equity awards). In addition, Mr. Hylen will be entitled to his target variable cash compensation on a prorated basis, and continued health insurance coverage for 18 months following his date of termination.
“Good reason” for this purpose also will include situations in which Mr. Hylen does not assume the positions of President and Chief Executive Officer of the combined entity. Such payments and benefits are subject to the execution by
Mr. Hylen of a separation and release agreement containing a general release of claims in favor of Citrix.
Equity Awards
With respect to the performance-based equity awards provided to our executive officers (other than Mr. Calderoni), the award agreements provide
that if the executive officer’s employment with our company terminates as a result of his death, disability or retirement (defined as termination of employment after attainment of age 65 and provided that the executive officer has at least
four years of service with our company), the executive officer will remain eligible to earn such performance-based awards at the end of the performance period based on our achievement of the
applicable performance metrics. Such awards will be prorated based on the date of such executive officer’s death, disability or retirement and the number of months in the performance period. Also, in the event of a change in control, these
executive officers will earn the target number of performance-based equity awards granted to them in connection with our 2015 executive incentive program on a prorated basis based on the number of months in the performance period (January 1,
2016 to December 31, 2016) that have elapsed prior to the change in control.
Potential Payments
The following tables show potential payments and benefits that would have been provided to each of Messrs. Henshall, Hylen, Oestermann and Sartorius upon the occurrence
of a change in control and/or certain termination triggering events, assuming such change in control or terminating event occurred on December 31, 2015. The amounts shown in these tables do not include payments and benefits to the extent they
have been earned prior to the termination of employment or are provided on a non-discriminatory basis to employees upon termination of employment. These include:
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accrued salary and vacation pay;
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distribution of plan balances under our 401(k) plan and the non-qualified deferred compensation plan (see
Nonqualified Deferred Compensation
beginning on page 76 for the balances of each Named Executive Officer);
and
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life insurance proceeds in the event of death.
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The closing market price of our common stock on December 31, 2015
was $75.65 per share.
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Benefit
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Involuntary Not
for Cause
Termination /
Good Reason
Termination
($)
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Involuntary Not for
Cause Termination
/ Good
Reason
Termination
Following Change
in Control
($)(1)
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Death or
Disability
($)(2)
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David J. Henshall
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Severance
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1,390,000
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2,085,000
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—
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Unvested Equity Awards(3)
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5,118,933
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17,661,249
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2,834,681
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Benefits Continuation
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21,031
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31,546
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—
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Total
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6,529,964
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19,777,795
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2,834,681
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Christopher S. Hylen(4)
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Severance
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826,500
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1,239,750
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—
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Unvested Equity Awards(3)
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3,339,872
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8,519,022
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1,243,383
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Benefits Continuation
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29,541
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44,312
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—
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Total
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4,195,913
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9,803,084
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1,243,383
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Klaus Oestermann
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Severance
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807,500
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1,211,250
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—
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Unvested Equity Awards(3)
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2,397,046
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6,066,903
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442,023
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Benefits Continuation
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27,806
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41,709
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—
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Total
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3,232,352
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7,319,862
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442,023
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Carlos E. Sartorius
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Severance
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1,050,000
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1,575,000
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—
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Unvested Equity Awards(3)
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2,912,601
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8,028,886
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617,380
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Benefits Continuation
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18,435
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27,653
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—
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Total
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3,981,036
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9,631,539
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617,380
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(1)
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The severance amounts represent the maximum amounts payable under the change in control agreements. These agreements provide that severance payments may be reduced to avoid the application of taxes imposed under the
Internal Revenue Code and, therefore, the executive officers may receive an amount less than the amount reflected in the tables above.
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(2)
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The same level of accelerated vesting would apply in the case of the “retirement” of any of these executive officers (as such term is defined in the applicable award agreements). As of December 31, 2015,
none of the executive officers were eligible for such retirement benefit.
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(3)
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Value of performance-based awards calculated using target award level. In a termination based on death or disability, for each performance-based award for which the performance period has not completed, the number of
shares earned will be calculated based on actual performance during the performance period and prorated for the number of months that elapsed in the performance period prior to such termination.
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(4)
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The payments and benefits listed for Mr. Hylen do not include potential payments resulting from the amendment of his incentive agreement that became effective after December 31, 2015. See the discussion above
under
2015 Executive Incentive Program
for further information.
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Messrs. Grieve and Ramleth are not included in the above tables as their employment with Citrix terminated during 2015.
Mr. Grieve did not receive any payments or other benefits in connection with the termination of his employment. Mr. Ramleth received total payments and benefits under the terms of his incentive agreement and the related separation and
release agreement of approximately $4,238,967, which consisted of a cash
payment of $1,160,000, accelerated vesting of service-based equity awards of $3,026,000 (consisting of 40,000 restricted stock units multiplied by a per share price of $75.65, which was the
closing price per share of our common stock on December 31, 2015), benefits continuation of approximately $20,967, and reimbursement of legal fees of $32,000.