PART III
Item 10. Directors, Executive Officers and Corporate Governance
Board
Leadership Structure
Our Board of Directors is composed of eleven members, divided into three classes. Pursuant to our amended and restated
bye-laws, our directors are elected at the annual general meeting of shareholders for a period of three years, with each director serving until the third annual general meeting of shareholders following their election. Upon the expiration of the
term of a class of directors, directors for that class will be elected for a three-year term at the annual general meeting of shareholders in the year of such expiration. Each of our directors will continue to serve as director until the election
and qualification of his or her successor, or until the earlier of his or her death, resignation or removal.
The Board of Directors of IHS Markit
believes strongly in the value of an independent board of directors to provide effective oversight of management. This includes all independent members of the key board committees: the Audit Committee, the Human Resources Committee, the Nominating
and Governance Committee, and the Risk Committee. Each of the Companys directors, other than Mr. Stead and Mr. Uggla, are independent (see Independent and Non-Management Directors below). The independent members of the
Board of Directors meet regularly without management, which meetings are chaired by the lead independent director, which our bye-laws refer to as the Lead Director, whose role is described further below.
The Board believes it is important to retain its flexibility to allocate the responsibilities of the offices of the Chairman and Chief Executive Officer
(CEO) in any way that it deems to be in the best interests of the Company. Since the completion of the Merger on July 12, 2016, Jerre Stead was appointed Chairman and CEO of IHS Markit and his service as both Chairman of the Board
and CEO has been effective. Mr. Stead possesses detailed and in-depth knowledge of the business and the opportunities we have in the global marketplace and is thus well positioned to develop agendas that ensure that the Boards time and
attention are focused on the most critical matters.
IHS Markit has established a Lead Director role with broad authority and responsibility. Robert
Kelly has served as our Lead Director since the closing of the Merger and was previously the lead director of Markit since June 2014. The Lead Directors responsibilities include:
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scheduling meetings of the independent directors;
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chairing the separate meetings of the independent directors;
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serving as principal liaison between the independent directors and the Chairman and CEO on sensitive issues;
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communicating from time to time with the Chairman and CEO, and disseminating information among the Board of Directors as appropriate;
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providing leadership to the Board of Directors if circumstances arise in which the role of the Chairman may be, or may be perceived to be, in conflict;
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reviewing and approving the agenda and schedule for Board of Directors meetings and executive sessions and adding topics to the agenda as appropriate;
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reviewing the quality, quantity, and timeliness of information to be provided to the Board;
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serving as a non-management point of contact for the Companys shareholders and other external stakeholders; and
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presiding over the annual self-evaluation of the Board of Directors.
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The Board believes that these responsibilities appropriately and effectively complement the Board leadership structure
of IHS Markit.
The Role of the Board of Directors in Risk Oversight
We believe that risk is inherent in innovation and the pursuit of long-term growth opportunities. The Board of Directors, acting directly and through its committees, is responsible for the oversight of the
Companys risk management. With the oversight of the Board, IHS Markit has implemented practices and programs designed to help manage the risks to which we are exposed in our business and to align risk-taking appropriately with our efforts to
increase shareholder value. Each of the Boards four committees Risk, Audit, Human Resources, and Nominating and Governance has a role in assisting the Board in its oversight of the Companys risk management, as set forth in
the relevant committee charters.
The Boards Risk Committee brings additional Board-level focus to the oversight of the Companys management
of key risks, as well as the Companys policies and processes for monitoring and mitigating such risks. The Risk Committee meets at least quarterly. The Chair of the Risk Committee gives regular reports of the Risk Committees meetings and
activities to the Board in order to keep the Board informed of the Companys guidelines, policies and practices with respect to risk assessment and risk management; and each other committee also reports regularly to the full on its activities.
In addition, the Board of Directors participates in regular discussions among the Board and with IHS Markit senior management on many core subjects,
including strategy, operations, finance, information technology, information security, human resources, legal and public policy matters, and any other subjects regarding which the Board or its committees consider risk oversight an inherent element.
Management at IHS Markit is responsible for day-to-day risk management activities. The Company has formed a management risk committee led by a Chief Risk Officer to supervise these day-to-day risk management efforts, including identifying potential
material risks and appropriate and reasonable risk mitigation efforts. The Chief Risk Officer regularly reports such efforts to the Risk Committee. The Board of Directors believes that the leadership structure described under Board Leadership
Structure facilitates the Boards oversight of risk management because it allows the Board, with leadership from the Lead Director and working through its independent committees, to participate actively in the oversight of
managements actions.
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Business Experience and Qualification of Board Members
The following discussion presents information about the persons who comprise the Board of Directors of IHS Markit.
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Name
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Age
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Position
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Class III Directors with terms expiring at the Annual General Meeting in 2017
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Ruann F. Ernst
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Director
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William E. Ford
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Director
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Balakrishnan S. Iyer
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Director
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Class I Directors with terms expiring at the Annual General Meeting in 2018
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Jerre L. Stead
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Chairman and CEO
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Dinyar S. Devitre
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Director
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Robert P. Kelly
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Lead Director
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Deborah Doyle McWhinney
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Director
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Class II Directors with terms expiring at the Annual General Meeting in 2019
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Lance Uggla
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Director, President and Chief Integration Officer
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Jean-Paul Montupet
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Director
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Richard W. Roedel
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Director
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James A. Rosenthal
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Director
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Nominees for Class III Directors to be Elected at the Annual General Meeting in 2017
Ruann F. Ernst
Ruann F. Ernst has served as
a member of our Board since July 2016 and previously served as a member of the board of IHS Inc. since December 2006. Dr. Ernst served as Chief Executive Officer of Digital Island, Inc. from 1998 until her retirement in 2002. Dr. Ernst was
Chairperson of the board of Digital Island from 1998 until the company was acquired by Cable & Wireless, Plc. in 2001. Prior to Digital Island, Dr. Ernst worked for Hewlett Packard in various management positions, including General
Manager, Financial Services Business Unit. Prior to that, she was Vice President for General Electric Information Services Company and a faculty member and Director of Medical Computing at The Ohio State University where she managed a biomedical
computing and research facility. Dr. Ernst also served on the board of Digital Realty Trust from 2004 until May 2015. At The Ohio State University, she serves on the University Foundation Board and the Fisher College of Business Advisory Board.
She was a founder and is Board Chair of the nonprofit, Healthy LifeStars.
Dr. Ernst brings to the Board a strong technical and computing
background as well as skill in the development of information technology businesses. She also has extensive experience as a member of boards where strategic planning and long-term planning are critical to the success of the enterprise.
William E. Ford
William E. Ford has served
as a member of our Board since July 2016 and previously served as a member of the board of Markit Ltd. since June 2014. Mr. Ford is the Chief Executive Officer and Managing Director of General Atlantic LLC, a global growth equity firm, where he
has worked since 1991. Mr. Ford sits on the boards of Axel Springer SE, Tory Burch, LLC and Oak Hill Advisors, L.P., which are General Atlantic portfolio companies. Mr. Ford is actively involved in various nonprofit organizations and
serves on the boards of the National Committee on US-China Relations, Shofco (Shining Hope for Communities), New York Genome Center, and Partnership for New York City.
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Mr. Ford is a member of the advisory board of McKinsey Investment Office Advisory Council, Stanford Graduate School of Business, Tsinghua University School of Economics and Management, TBG
Limited Advisory Board, Lincoln Center and The Johnson Company. He is also a Vice Chairman of the board of trustees of The Rockefeller University and a member of the board of overseers and managers of Memorial Sloan Kettering Cancer Center.
Mr. Ford formerly served on the boards of a number of General Atlantic portfolio companies including First Republic Bank, CareCore National, NYSE Euronext, E*Trade, Priceline, NYMEX and Zagat Survey. Mr. Ford holds a BA in Economics from
Amherst College and an MBA from the Stanford Graduate School of Business.
Mr. Ford brings to the Board a wealth of private equity experience and
extensive knowledge of business, finance and strategic acquisitions which will provide valuable insight for our long-term corporate and business strategy.
Balakrishnan S. Iyer
Balakrishnan S. Iyer has served as a member of our Board since July 2016 and previously
served as a member of the board of IHS Inc. since December 2003. From October 1998 to June 2003, Mr. Iyer served as Senior Vice President and Chief Financial Officer of Conexant Systems, Inc. From 1997 to 1998, he was Senior Vice President and
Chief Financial Officer of VLSI Technology Inc. and, from 1993 to 1997, he was Vice President, Corporate Controller of VLSI Technology Inc. Mr. Iyer served on the board of directors of Conexant Systems from February 2002 until April 2011, Life
Technologies (and its predecessor Invitrogen) from July 2001 until it was acquired in February 2014 and QLogic Corporation from 2003 until August 2016. He currently serves on the boards of directors of Skyworks Solutions, Inc. and Power
Integrations, Inc. Mr. Iyer holds a B.Tech in Mechanical Engineering from the Indian Institute of Technology, Madras, an MS in Industrial Engineering from the University of California, Berkeley and an MBA in Finance from the Wharton School,
University of Pennsylvania.
Mr. Iyer provides to the Board his expertise in corporate finance, accounting, and strategy, including experience
gained as the Chief Financial Officer of two public companies. Mr. Iyer also brings a background in organizational leadership and experience serving as a public company outside director.
Continuing Class I Directors with Terms Expiring at the Annual General Meeting in 2018
Jerre L. Stead
Jerre L. Stead is Chairman
and CEO of IHS Markit, and was Chairman and CEO of IHS Inc. prior to the Merger. He became executive chairman of IHS Inc. on December 1, 2000. He led IHS Inc.s successful IPO in November 2005 and served as both chairman and CEO from
September 2006 until June 2013. Mr. Stead returned as CEO of IHS in June 2015 and continued in his role as chairman until the Merger. Under Mr. Steads leadership since its IPO, IHS Inc. provided its shareowners a 28 percent compound
annual growth rate. Mr. Stead began his career in 1965 at Honeywell, Inc., where he spent 21 years and held a number of executive management positions. He was the chairman and CEO of Honeywell-Phillips Medical Electronics from September 1980 to
June 1982, and he returned to the United States as a group executive of the Homes and Buildings organization in July 1982. In 1987, he was named president and COO of the Square D Company, a leading manufacturer of electrical distribution and factory
automation products. He was promoted to chairman, president and CEO in 1988 and served in that capacity through 1991. In 1992, Mr. Stead was named CEO of AT&T Global Business Communications Systems. He was promoted to executive vice
president of AT&T and chairman and CEO of AT&T Global Information Solutions (NCR Corporation) in 1993. He served as a member of the AT&T Management Executive Committee. During this time, Mr. Stead was also the chairman of NCR Japan,
a publicly traded company. In January 1995, Mr. Stead left AT&T to become chairman and CEO of Legent Corporation. He resigned eight months later after a successful merger
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with Computer Associates. Mr. Stead joined Ingram Micro in 1996 as chairman and CEO and took the company public on November 1, 1996 the largest IPO in history at that time for a
technology company. Under his leadership, Ingram Micro grew from an $8 billion company to a $30 billion company conducting business in more than 120 countries. The company was number 41 in the Fortune 500 for the year 2000. Mr. Stead is a
graduate of the University of Iowa in Iowa City, Iowa, where he earned a bachelors degree in business administration, and of the Harvard University Advanced Management Program in Switzerland. Mr. Stead has served on 34 corporate boards
during his career. In 2009, he was chosen as an outstanding director by the Financial Times one of 55 in the past ten years. Mr. Stead served on the board of Mindspeed until May 2014 and on the board of the Salk Institute
until September 2015. He is chairman of the Banner Alzheimers Institute Foundation as well as chairman of the board of trustees of Garret-Evangelical Seminary. He is a past chairman of the National Electronic Manufacturers Association and the
Center of Ethics and Values at the Garret-Evangelical Seminary.
Mr. Stead has been involved in the leadership of IHS Inc. for more than 15 years
and was previously the Chief Executive Officer of six different public companies. As our Chairman and CEO, Mr. Stead brings to the Board of Directors his knowledge of our business, strategy, people, operations, competition, and financial
position. Mr. Stead provides recognized executive leadership and vision. In addition, he brings with him a global network of customer, industry, and government relationships.
Dinyar S. Devitre
Dinyar S. Devitre has
served as a member of our Board since July 2016 and previously served as a member of the board of Markit Ltd. since November 2012. Mr. Devitre is also a member of the board of directors of Altria Group, Inc., where he serves on its finance and
innovation committees. Mr. Devitre also serves as a Trustee of the Brooklyn Academy of Music and a Trustee Emeritus of the Asia Society. Until December 31, 2016, Mr. Devitre served as a special advisor to General Atlantic. In March
2008, Mr. Devitre retired from his position as Senior Vice President and Chief Financial Officer of Altria Group, Inc. Prior to Mr. Devitres appointment to this position in April 2002, he held a number of senior management positions
with Altria, including President, Philip Morris Asia and Chairman and CEO of Philip Morris Japan. Mr. Devitre previously served on the boards of SABMiller plc, Western Union Company, Emdeon Inc., Kraft Foods Inc. (now known as Mondelēz
International, Inc.), The Lincoln Center for the Performing Arts, Inc. and Pratham USA. Mr. Devitre holds a BA (Hons) degree from St. Josephs College, Darjeeling and an MBA from the Indian Institute of Management in Ahmedabad.
Mr. Devitre brings to the Board experience as the chief financial officer of a large multinational company, as an executive and director of large
corporations, as well as diversity in viewpoint and international business experience.
Robert P. Kelly
Robert P. Kelly has served as a member of our Board since July 2016 and previously served as a member of the board of Markit Ltd. since November 2012.
Mr. Kelly serves as Lead Director of our Board of Directors. Mr. Kelly is chairperson of Canada Mortgage and Housing Corporation and chairman of the board of directors of Santander Asset Management. Mr. Kelly also serves as a member
of the Trilateral Commission and head of the U.S. alumni association of the Cass Business School, London. Mr. Kelly was most recently chairman and Chief Executive Officer of The Bank of New York Mellon and The Bank of New York Mellon
Corporation until 2011. Prior to that, Mr. Kelly was Chairman, Chief Executive Officer and President of Mellon Bank Corporation, Chief Financial Officer of Wachovia Corporation and Vice-Chairman of Toronto-Dominion Bank. Mr. Kelly
previously served as Chancellor of Saint Marys University in Canada, was a former member of the boards of the Financial Services Forum, the Federal Advisory Council of the Federal Reserve Board, the Financial Services
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Roundtable, and Institute of International Finance, and a former member of the board of trustees of St. Patricks Cathedral in New York City, Carnegie Mellon University in Pittsburgh
and the Art Gallery of Ontario. Mr. Kelly holds a B.Comm. from Saint Marys University, an MBA from the Cass Business School, City University, London, United Kingdom and is a Chartered Accountant and Fellow Chartered Accountant.
Mr. Kelly has been awarded honorary doctorates from City University and Saint Marys University.
Mr. Kellys extensive experience
as the chairman and chief executive officer of a large financial institution, as well as other senior policy making positions in the financial services industry and as a director of other public and private companies, provides the Board with
valuable insight and executive leadership , management and strategic development experiences.
Deborah Doyle McWhinney
Deborah Doyle McWhinney has served as a member of our Board since July 2016 and previously served as a member of the board of IHS Inc. since May
2015. Ms. McWhinney was the chief executive officer of Citis global enterprise payments business and co-chair of the Citi Women initiative prior to her retirement in January 2014. Prior to joining Citi in 2009, Ms. McWhinney worked
at Schwab, Inc. where she was President of Schwab Institutional and was a member of the executive committee, the Schwab Bank board, and headed the global risk committee. Ms. McWhinney previously held executive roles at Visa International and
Engage Media (a division of CMGI). Earlier in her career, she worked for 17 years at Bank of America in corporate and retail banking. Ms. McWhinney was appointed by former President George W. Bush to the board of directors of the Securities
Investor Protection Corporation in 2002. Ms. McWhinney currently serves on the boards of Fluor Corporation, Lloyds Banking Group plc and Fresenius Medical Care AG & Co. KGaA and is a trustee for the California Institute of Technology
and for the Institute for Defense Analyses.
Ms. McWhinney brings to the Board extensive experience gained in executive level positions in the
financial services industry.
Continuing Class II Directors with Terms Expiring at the Annual General Meeting in 2019
Lance Uggla
Lance Uggla is President of IHS
Markit, responsible for the post-merger integration. He will become Chairman and Chief Executive Officer of IHS Markit on December 31, 2017, following the retirement of Jerre Stead. Prior to the Merger, Mr. Uggla was Chairman and Chief
Executive Officer of Markit Ltd. He led Markits growth from a UK startup that he founded in 2003, offering the first daily credit default swap pricing service, to a public company with a market capitalisation of over $5 billion, providing
business critical products and services to the worlds leading financial institutions. Markit has won over 100 awards for its innovations and contributions to financial market resilience. Previously Mr. Uggla was Vice Chair, Head of Europe
and Asia at TD Securities and responsible for a USD 15 billion investment grade credit portfolio. Prior to that, he was Vice Chair, Head of Global Sales and Trading at CIBC World Markets. Mr. Uggla holds an MSc from the London School of
Economics and a BBA from the Simon Fraser University in Canada. He was awarded UK Entrepreneur of the Year by EY in 2012.
Mr. Uggla was a founder
and the Chairman and CEO of Markit since its creation, and was previously an executive in the financial industry. As president of IHS Markit, Mr. Uggla brings to the Board of Directors his knowledge of our business, strategy, people,
operations, competition, and financial position. In addition, he brings with him extensive relationships in the financial services industry.
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Jean-Paul L. Montupet
Jean-Paul Montupet has served as a member of our Board since July 2016 and previously served as a member of the board of IHS Inc. since October 2012. Mr. Montupet serves as a special advisor to Eurazeo
Société anonyme. Mr. Montupet was chair of the Industrial Automation business of Emerson and president of Emerson Europe prior to his retirement in December 2012. Mr. Montupet joined Emerson in 1981, serving in a number of
senior executive roles at the global technology provider. Mr. Montupet serves on the boards of WABCO Holdings Inc. and Assurant, Inc. and previously served on the board of Lexmark International, Inc. In addition, Mr. Montupet was the
non-executive chair of the board of PartnerRE Ltd. until March 2016. He is also a trustee of the St. Louis Public Library Foundation and The Churchill Centre.
Mr. Montupet brings to the Board extensive international business experience, particularly from Europe and Asia Pacific.
Richard W. Roedel
Richard W. Roedel has served as a member of our Board since July 2016 and previously served
as a member of the board of IHS Inc. since November 2004. Mr. Roedel serves as a director of Six Flags Entertainment Corporation, LSB Industries, Inc. and Luna Innovations Incorporated. Mr. Roedel also serves as the non-executive chairman
of Luna. Mr. Roedel served on the board of BrightPoint, Inc. until it was acquired in October 2012, on the board of Sealy Corporation until it was acquired in March 2013, and on the board of Lorillard, Inc. until it was acquired in June 2015.
He also served as a director of Broadview Network Holdings, Inc., a private company, until 2012, and Dade Behring Holdings, Inc. from October 2002 until November 2005 when Dade was acquired. Mr. Roedel served in various capacities at Take-Two
Interactive Software, Inc. from November 2002 until June 2005, including Chairman and Chief Executive Officer. Until 2000, Mr. Roedel was employed by BDO Seidman LLP, having been Managing Partner of its Chicago and New York Metropolitan area
offices and later as Chairman and Chief Executive Officer. Mr. Roedel is a graduate of The Ohio State University and is a certified public accountant.
Mr. Roedel provides to the Board of Directors expertise in corporate finance, accounting, and strategy. He brings experience gained as a Chief Executive Officer and as a director for several companies.
James A. Rosenthal
James A.
Rosenthal has served as a member of our Board since July 2016 and previously served as a member of the board of Markit Ltd. since September 2013. Until December 2016, Mr. Rosenthal was the Executive Vice President and Chief Operating Officer of
Morgan Stanley, a member of Morgan Stanleys management and operating committees, Chairman and Chief Executive Officer of Morgan Stanley Bank, N.A., and Chairman of the board of Morgan Stanley Private Bank, N.A. Mr. Rosenthal is a member
of the board of The Lincoln Center for the Performing Arts, Inc. Mr. Rosenthal was previously Head of Corporate Strategy of Morgan Stanley, Chief Operating Officer of Morgan Stanley Wealth Management and Head of Firmwide Technology and
Operations for Morgan Stanley. Prior to joining Morgan Stanley, Mr. Rosenthal served as Chief Financial Officer of Tishman Speyer from 2006 to 2008. Mr. Rosenthal holds a BA from Yale and a JD from Harvard Law School.
Mr. Rosenthal brings to the Board extensive experience gained as chief operating officer of one of the worlds largest financial institutions.
Organization of the Board of Directors
Prior to the completion of the Merger, the Markit board consisted of ten directors. Upon completion of the Merger, in accordance with our bye-laws, the Board size
increased to eleven directors, six of whom
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were designees of IHS (each an IHS designee) and five of whom were designees of Markit (each a Markit designee). As such, as of the completion of the Merger on
July 12, 2016, Edwin D. Cass, Gillian H. Denham, Timothy J.A. Frost, Cheng Chih Sung, Anne Walker and Lance Uggla resigned as directors of IHS Markit and the remaining members of the Board, William E. Ford, Dinyar S. Devitre, Robert P. Kelly,
James A. Rosenthal, as the Markit designees, appointed Lance Uggla as a Class II director and Markit designee, and the following IHS designees to serve as directors of IHS Markit: Jerre L. Stead and Deborah Doyle McWhinney as Class I directors,
Richard Roedel and Jean-Paul Montupet as Class II directors and Ruann F. Ernst and Balakrishnan S. Iyer as Class III directors.
In addition,
Mr. Stead became the Chairman and Chief Executive Officer of IHS Markit, Mr. Uggla became the President and Chief Integration Officer of IHS Markit and Robert Kelly became the Lead Director of the Board. Prior to the Merger, Mr. Stead
was chairman and chief executive of IHS and Mr. Uggla was chairman and chief executive of Markit. Pursuant to our bye-laws, Mr. Stead will serve as the Chairman and Chief Executive Officer of IHS Markit until no later than
December 31, 2017 (the change date), when Mr. Uggla will be appointed Chairman and Chief Executive Officer of IHS Markit, unless otherwise decided by supermajority approval of the Board (excluding the vote of Mr. Uggla).
Our bye-laws provide that, prior to the change date, if any IHS designee or Markit designee can no longer serve as a director of IHS Markit due to
death, disability, disqualification or resignation, the remaining IHS designees (if the departing director is an IHS designee) or Markit designees (if the departing director is a Markit designee), will appoint his or her successor, in each case,
acting by the affirmative vote of a majority of such remaining IHS designees or Markit designees, as applicable. Our bye-laws also provide that, prior to the change date, for any director election to occur by resolution of the IHS Markit
shareholders, any person proposed or nominated by the IHS Markit board to replace an IHS designee will require the approval of the remaining IHS designees and any person proposed or nominated by the IHS Markit board to replace a Markit designee will
require the approval of the remaining Markit designees, in each case, acting by the affirmative vote of a majority of such remaining IHS designees or remaining Markit designees, as applicable.
Our Board held 13 meetings during the fiscal year ended November 30, 2016. At each meeting, the Chairman was the presiding director. Each director attended at
least 75 percent of the total regularly scheduled and special meetings of the Board and the committees on which they served. As stated in our Corporate Governance Guidelines, our Board encourages each director to attend our Annual General Meeting of
Shareholders, although attendance is not required. At the 2016 Annual General Meeting of Shareholders, seven of Markits ten directors at the time were in attendance.
At the completion of the Merger, our Board established four standing committees: the Audit Committee, the Human Resources Committee, the Nominating and Governance Committee, and the Risk Committee. The Board has
approved a charter for each of the Audit, Human Resources, Nominating and Governance, and Risk committees, each of which can be found on our website at http://investor.ihsmarkit.com.
In Markits initial public offering in 2014, Canada Pension Plan Investment Board (CPPIB) purchased approximately $250 million of our common shares, and was given the right to nominate, in
consultation with our Nominating and Governance Committee, one director for appointment to our Board of Directors pursuant to a Director Nomination Agreement with us. This right will expire if CPPIBs beneficial ownership of our common shares
falls below 100 percent of the number of common shares CPPIB purchased in Markits initial public offering. Edwin D. Cass was the designee nominated by CPPIB and was appointed to Markits Board of Directors in October 2014. At the
completion of the Merger, Mr. Cass resigned and CPPIB determined at that time that it would not choose to designate a new nominee to our Board, reserving the right to designate a future nominee in accordance with the terms of the Director
Nomination Agreement.
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Independent and Non-Management Directors
We believe that all of our directors other than Messrs. Stead and Uggla are independent directors, based on the independence standards of NASDAQ and SEC rules and regulations. All of our directors other
than Messrs. Stead and Uggla are non-management directors.
In addition, we believe that all members of each of the Audit Committee, Risk Committee,
Human Resources Committee and Nominating and Governance Committee of the Board meets the independence standards of NASDAQ and SEC rules and regulations.
In accordance with our bye-laws and the Corporate Governance Guidelines, the independent directors designated Mr. Kelly as Lead Director on July 12,
2016. The Lead Director chairs executive sessions of the independent directors. During our 2016 fiscal year, the independent directors of the Board met seven times without the presence of management.
Prior to their resignation, Mr. Cass, Ms. Denham, Mr. Frost, Dr. Sung and Ms. Walker were believed by the Board to be independent
directors based the independence standards of NASDAQ and SEC rules and regulations.
Simultaneous Service on Other Public Company Boards
In accordance with our Corporate Governance Guidelines, without the consent of the Nominating and Governance Committee, a director may not serve
on more than five public company boards, including our Board, and a director who is also the chief executive officer of another public company may not serve on more than two public company boards, including our Board and their own board of
directors.
The Corporate Governance Guidelines also provide that a director must notify and receive approval from the Chair of the Nominating and
Governance Committee prior to accepting any invitation to serve on another board (including a not-for-profit/tax-exempt board) or with a government or advisory group that is expected to require significant commitments of time, in order for IHS
Markit to confirm the absence of any actual or potential conflict of interest.
Business Code of Conduct and Corporate Governance Guidelines
We have adopted a code of ethics that we refer to as our Business Code of Conduct. Our Business Code of Conduct applies to our directors as well
as all of our principal executive officers, our financial and accounting officers, and all other employees of IHS Markit.
Our Board has also adopted
Corporate Governance Guidelines that serve as a flexible framework within which our Board and its committees operate. These guidelines cover a number of areas including the size and composition of our Board of Directors, membership criteria and
director qualifications, director responsibilities, Board agenda, roles of the Chairman and Chief Executive Officer and lead independent director, meetings of independent directors, committee responsibilities and assignments, Board member access to
management and independent advisers, director communications with third parties, director compensation, director orientation and continuing education, evaluation of senior management and management succession planning.
Our Business Code of Conduct and our Corporate Governance Guidelines are available on our website at http://investor.ihsmarkit.com. If we approve any substantive
amendment to our Business Code of Conduct or our Corporate Governance Guidelines, or if we grant any waiver of the Business Code of Conduct to the Chief Executive Officer, the Chief Financial Officer, or the Chief Accounting Officer, we intend to
post an update on the Investor Relations page of the Companys website (http://investor.ihsmarkit.com) within five business days and keep the update on the site for at least one year.
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Communications with the Board
The Board has a process for shareholders or any interested party to send communications to the Board, including any committee of the Board, any individual director, or our non-management directors. If you wish to
communicate with the Board as a whole, with any committee, with any one or more individual directors, or with our non-management directors, you may send your written communication to:
General Counsel
c/o IHS Markit
Legal Department
IHS Markit Ltd.
4th Floor, Ropemaker Place
25 Ropemaker Street
London, England EC2Y 9LY
Communications with
Non-Management Directors
Interested parties wishing to reach our independent directors or non-management directors may address the communication
to our Lead Director on behalf of the non-management directors. Address such communications as follows:
Lead Director
c/o IHS Markit Legal Department
IHS
Markit Ltd.
4th Floor, Ropemaker Place
25 Ropemaker Street
London, England EC2Y 9LY
Depending on how the communication is addressed and the subject matter of the communication, either our Lead Director or Ms. Granat will review any
communication received and will forward the communication to the appropriate director or directors.
Communications with the Audit Committee
Our Audit Committee has established a process for communicating complaints regarding accounting or auditing matters.
In order to submit a complaint, you may call our code of conduct hotline as set forth in the Code of Conduct Hotline policy, which can be found on our website at
http://investor.ihsmarkit.com. Any such complaints received or submitted are forwarded as appropriate to the Audit Committee, to take such action as may be appropriate.
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Composition of Board Committees
The Board has had four standing committees in fiscal year 2016 since the completion of the Merger, with duties, membership as of fiscal year-end, and number of meetings for each as shown below.
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Name
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Audit
(1)
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Human
Resources
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Nominating
and
Governance
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Risk
(1)
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Dinyar S. Devitre
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Chair
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✓
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✓
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Ruann F. Ernst
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Chair
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William E. Ford
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✓
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Balakrishnan S. Iyer
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✓
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✓
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Robert P. Kelly
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✓
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Chair
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Deborah Doyle McWhinney
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✓
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✓
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Jean-Paul Montupet
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✓
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✓
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Richard W. Roedel
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Chair
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James A. Rosenthal
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✓
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✓
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2016 Meetings
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7
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7
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6
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1
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(1)
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The Risk Committee was established at the completion of the Merger. Prior to July 12, 2016, the Audit Committee was delegated responsibility for risk overview of the
Company.
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During fiscal year 2016, the following directors served on committees for portions of the year:
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Audit Committee: Mr. Cass, Mr. Frost and Mr. Sung served on the Audit Committee (formerly the Audit and Risk Committee) until the completion of
the Merger. Ms. McWhinney, Mr. Iyer and Mr. Ford began serving on the Audit Committee on July 12, 2016 at the completion of the Merger.
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Human Resources Committee: Ms. Denham and Mr. Ford served on the Human Resources Committee (formerly the Human Resources and Compensation Committee)
until the completion of the Merger. Dr. Ernst and Mr. Montupet began serving on the Human Resources Committee on July 12, 2016 at the completion of the Merger.
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Nominating and Governance Committee: Ms. Denham, Mr. Frost and Mr. Uggla served on the Nominating and Governance Committee until the completion of
the Merger. Mr. Iyer and Mr. Kelly began serving on the Nominating and Governance Committee on July 12, 2016 at the completion of the Merger.
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Risk Committee: Mr. Devitre, Ms. McWhinney, Mr. Roedel and Mr. Rosenthal began serving on the Risk Committee on July 12, 2016, when it
was established at the completion of the Merger.
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Audit Committee
Members:
Dinyar S. Devitre
(Chair)
William E. Ford
Balakrishnan S. Iyer
Deborah Doyle
McWhinney
Our Audit Committee was established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee assists our Board in
its oversight of (i) the integrity of our financial statements; (ii) our independent registered public accountants qualifications, independence, and performance; (iii) the performance of our internal audit function; and
(iv) our compliance with legal and regulatory requirements. The Audit Committee is directly responsible for recommending the appointment of, and
16
the compensation, retention and oversight of the work of our independent registered public accountants. The Audit Committee also prepares the report on the Companys financial statements and
its independent registered public accountants that the SEC rules require to be included in the Companys annual proxy statement or annual report. The Audit Committee is governed by a charter, a copy of which is available at the Companys
website at http://investor.ihsmarkit.com.
Our Board has determined that each member of the Audit Committee satisfies the independence
requirement of Rule 10A-3 under the Exchange Act, the listing standards of NASDAQ and the Audit Committee Charter and meets the financial literacy and sophistication requirements of the listing standards of NASDAQ. In addition, the Board has
determined that each of Mr. Devitre, Mr. Iyer and Ms. McWhinney meets the definition of audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K promulgated by the SEC.
Human Resources Committee
Members:
Ruann F. Ernst
(Chair)
Robert P. Kelly
Jean-Paul Montupet
James A.
Rosenthal
The Human Resources Committee has been established by our Board to (i) review, approve and administer our compensation and benefits
policies generally, (ii) evaluate executive officer performance and review our management succession plan, (iii) review and approve compensation for our executive officers, (iv) retain and terminate compensation consultants,
(v) review and discuss the Compensation Discussion and Analysis disclosure with management and provide a recommendation to the Board regarding its inclusion in the Companys annual proxy statement or annual report, and (vi) prepare
the report on executive officer compensation that the SEC rules require to be included in the Companys annual proxy statement or annual report. See Compensation Discussion and Analysis below for a more detailed description of the
functions of the Human Resources Committee. The Human Resources Committee is governed by a charter, a copy of which is available at the Companys website at http://investor.ihsmarkit.com.
Our Board has determined that each member of the Human Resources Committee satisfies the independence requirement of the listing standards of NASDAQ,
our Corporate Governance Guidelines and the Human Resources Committee Charter.
Nominating and Corporate Governance Committee
Members:
Dinyar S. Devitre
Balakrishnan S. Iyer
Robert P. Kelly (Chair)
Jean-Paul
Montupet
The Nominating and Governance Committee has been created by our Board to (i) identify individuals qualified to become board members and
recommend director nominees to the Board, (ii) recommend directors for appointment to committees established by the Board, (iii) make recommendations to the Board as to determinations of director independence, (iv) oversee the
evaluation of the Board, (v) make recommendations to the Board as to compensation for our directors, and (vi) develop and recommend to the Board our corporate governance guidelines and business code of conduct and ethics. A more detailed
description of certain functions of the Nominating and Governance Committee
17
can be found under Director Nominations. The Nominating and Governance Committee is governed by a charter, a copy of which is available on the Companys website at
http://investor.ihsmarkit.com.
Our Board has determined that each member of the Human Resources Committee satisfies the independence
requirement the listing standards of NASDAQ, our Corporate Governance Guidelines and the Nominating and Governance Committee Charter.
Risk
Committee
Members:
Dinyar S. Devitre
Deborah Doyle McWhinney
Richard W. Roedel (Chair)
James A.
Rosenthal
The Risk Committee has been established by our Board to assist our Board in its oversight of the Companys risk management. In addition
to any other responsibilities which may be assigned from time to time by the Board, the Risk Committee is responsible for (i) reviewing and discussing with management the Companys risk management and risk assessment processes, including
any policies and procedures for the identification, evaluation and mitigation of major risks of the Company; (ii) receiving periodic reports from management as to efforts to monitor, control and mitigate major risks; and (iii) reviewing
periodic reports from management on selected risk topics as the Risk Committee deems appropriate from time to time, encompassing major risks other than those delegated by the Board to other committees of the Board in their respective charters or
otherwise. The Risk Committee is governed by a charter, a copy of which is available on the Companys website at http://investor.ihsmarkit.com.
Our Board has determined that each member of the Risk Committee satisfies the independence requirement of our Corporate Governance Guidelines and the
Risk Committee Charter.
Director Nominations
Our Board nominates directors to be elected at each Annual General Meeting of Shareholders and appoints new directors to fill vacancies when they arise. The Nominating and Governance Committee has the
responsibility to identify, evaluate, recruit, and recommend qualified candidates to the Board for nomination or appointment.
In addition to
considering an appropriate balance of knowledge, experience and capability, the Board has as an objective that its membership be composed of experienced and dedicated individuals with diversity of backgrounds, perspectives, and skills. The
Nominating and Governance Committee will select candidates for director based on the candidates character, judgment, diversity of experience, business acumen, and ability to act on behalf of all shareholders (without regard to whether the
candidate has been nominated by a shareholder). The Nominating and Corporate Governance Committee believes that nominees for director should have experience, such as experience in management or accounting and finance, or industry and technology
knowledge, that may be useful to IHS Markit and the Board, high personal and professional ethics, and the willingness and ability to devote sufficient time to effectively carry out his or her duties as a director. The Nominating and Governance
Committee believes it appropriate for at least one, and preferably multiple, members of the Board to meet the criteria established by the SEC for an audit committee financial expert, and for a majority of the members of the Board to meet
the definition of independent director under the rules of NASDAQ. The Nominating and Governance Committee also believes it appropriate for certain key members of our management to participate as members of the Board.
18
Prior to each Annual General Meeting of Shareholders, the Nominating and Governance Committee identifies nominees
first by evaluating the current directors whose term will expire at the Annual General Meeting of Shareholders and who are willing to continue in service. These candidates are evaluated based on the criteria described above, the candidates
prior service as a director, and the needs of the Board with respect to the particular talents and experience of its directors. In the event that a director does not wish to continue his or her service, the Nominating and Governance Committee
determines not to re-nominate the director, or a vacancy is created on the Board as a result of a resignation, an increase in the size of the Board, or other event, the Nominating and Governance Committee will consider various candidates for
membership, including those suggested by the Nominating and Governance Committee members, by other Board members, by any executive search firm engaged by the Nominating and Governance Committee, or by any nomination properly submitted by a
shareholder pursuant to the procedures for shareholder nominations for directors provided in the proxy statement related to the Annual General Meeting and this annual report. As a matter of policy, candidates recommended by shareholders are
evaluated on the same basis as candidates recommended by the Board members, executive search firms, or other sources. In 2016, Nominating and Governance Committee has not engaged any executive search firms to assist with identifying qualified Board
candidates.
Shareholder Proposals for the 2018 Annual General Meeting
If a shareholder wishes to present a proposal at the 2018 Annual General Meeting of Shareholders and have it included in our Proxy Statement for the 2018 Annual General Meeting of Shareholders, the shareholder and
the proposal must comply with these instructions, our bye-laws and the proxy proposal submission rules of the SEC. One important requirement is that the proposal be received by the Company Secretary of IHS Markit no later than October 24, 2017.
If a shareholder wishes to present a proposal at the 2018 Annual General Meeting of Shareholders, but not to include the proposal in our Proxy
Statement for the 2018 Annual General Meeting of Shareholders, or to nominate a person for election as a director, the shareholder and the proposal must comply with the requirements set forth in our bye-laws, including by the shareholder giving
timely notice of the proposal in writing to the Company Secretary of IHS Markit at the principal executive offices of IHS Markit:
IHS
Markit Ltd.
Attn: Company Secretary IHS Markit Legal Department
4th Floor, Ropemaker Place
25
Ropemaker Street
London, England EC2Y 9LY
In order to be timely under our bye-laws, notice of shareholder proposals must be received by the Company Secretary of IHS Markit, in the case of an annual general meeting of the shareholders, not less than 90 days
nor more than 120 days before the anniversary date of the immediately preceding annual general meeting of shareholders. If the next annual meeting is called for a date that is more than 30 days before or after that anniversary date, notice by the
shareholder in order to be timely must be received not later than 10 days following the earlier of the date on which notice of the annual general meeting was posted to shareholders or the date on which public disclosure of the date of the annual
general meeting was made. Therefore, assuming that our 2018 Annual General Meeting of Shareholders is called for a date that is not more than 30 days before or after April 5, 2018, we must receive notice of such a proposal or nomination for the
2018 Annual General Meeting of Shareholders no earlier than December 6, 2017 and no later than January 5, 2018.
We urge shareholders to
submit proposals by certified mail, return receipt requested, to the attention of the Corporate Secretary at the above address.
19
Additionally, under Bermuda law, shareholders holding not less than five percent of the total voting rights or 100 or
more shareholders together may require us to give notice to our shareholders of a proposal to be submitted at an annual general meeting. Generally, notice of such a proposal must be received by us at our registered office in Bermuda, located at
Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda, not less than six weeks before the date of the meeting and must otherwise comply with the requirements of Bermuda law.
Shareholder proposals related to shareholder nominations for the election of directors
A shareholders notice to the Company Secretary related to shareholder nominations for the election of directors must be in proper written form and must set
forth information related to the shareholder giving the notice and the beneficial owner (if any) on whose behalf the nomination is made, including:
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as to each person whom the shareholder proposes to nominate for election as a director, (A) the name, age, business address and residence address of the
person, (B) the principal occupation or employment of the person, (C) the class or series and number of shares of IHS Markit owned beneficially or of record by the person and (D) any other information relating to the person that would
be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to the Exchange Act or that IHS Markit may reasonably request in order to determine
the eligibility of such person to serve as a director of IHS Markit;
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the name and record address of the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is proposed;
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the class or series and number of shares of IHS Markit which are registered in the name of or beneficially owned by such shareholder and such beneficial owner
(including any shares as to which such shareholder or such beneficial owner has a right to acquire ownership at any time in the future);
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a description of all derivatives, swaps or other transactions or series of transactions engaged in, directly or indirectly, by such shareholder or such
beneficial owner, the purpose or effect of which is to give such shareholder or such beneficial owner economic risk similar to ownership of shares of IHS Markit;
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a description of all agreements, arrangements, understandings or relationships engaged in, directly or indirectly, by such shareholder or such beneficial owner,
the purpose or effect of which is to mitigate loss to, reduce the economic risk (or ownership or otherwise) of any class or series of shares of IHS Markit, manage the risk of share price changes for, or increase or decrease the voting power of, such
shareholder or beneficial owner, or which provides, directly or indirectly, such shareholder or beneficial owner with the opportunity to profit from any decrease in the price or value of the shares of any class or series of shares of IHS Markit;
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a description of all agreements, arrangements, understandings or relationships between such shareholder or such beneficial owner and any other person or persons
(including their names) in connection with the proposed nomination by such shareholder and any material relationship between such shareholder or such beneficial owner and the person proposed to be nominated for election; and
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a representation that such shareholder intends to appear in person or by proxy at the general meeting to propose such nomination.
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In the case of an election at any general meeting of shareholders, any such notice must be accompanied by a written consent of each person whom the shareholder
proposes to nominate for election as a director to being named as a nominee and to serve as a director if elected.
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Shareholder proposals not related to director nominations
A shareholders notice to the Company Secretary of IHS Markit with respect to shareholder proposals not related to director nominations must be in proper
written form and must set forth, as to each matter the shareholder and the beneficial owner (if any) proposes to bring before the meeting:
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a brief description of the business desired to be brought before the general meeting, the text of the proposal or business (including the text of any resolutions
proposed for consideration and, in the event that such business includes a proposal to amend the bye-laws of the Company, the language of the proposed amendment) and the reasons for conducting such business at the general meeting;
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the name and record address of such shareholder and the beneficial owner, if any, on whose behalf the business is being proposed;
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the class or series and number of shares of IHS Markit which are registered in the name of or beneficially owned by such shareholder and such beneficial owner
(including any shares as to which such shareholder or such beneficial owner has a right to acquire ownership at any time in the future);
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a description of all derivatives, swaps or other transactions or series of transactions engaged in, directly or indirectly, by such shareholder or such
beneficial owner, the purpose or effect of which is to give such shareholder or such beneficial owner economic risk similar to ownership of shares of IHS Markit;
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a description of all agreements, arrangements, understandings or relationships engaged in, directly or indirectly, by such shareholder or such beneficial owner,
the purpose or effect of which is to mitigate loss to, reduce the economic risk (or ownership or otherwise) of any class or series of shares of IHS Markit, manage the risk of share price changes for, or increase or decrease the voting power of, such
shareholder or beneficial owner, or which provides, directly or indirectly, such shareholder or beneficial owner with the opportunity to profit from any decrease in the price or value of the shares of any class or series of shares of IHS Markit;
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a description of all agreements, arrangements, understandings or relationships between such shareholder or such beneficial owner and any other person or persons
(including their names) in connection with the proposal of such business by such shareholder and any material interest of such shareholder or such beneficial owner in such business; and
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a representation that such shareholder intends to appear in person or by proxy at the general meeting to bring such business before the general meeting.
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You may obtain a copy of the current rules for submitting shareholder proposals from the SEC at:
U.S. Securities and Exchange Commission
Division of Corporation
Finance
100 F Street, NE
Washington, DC 20549
or through the SECs website at www.sec.gov.
We
recommend that any shareholder desiring to make a nomination or submit a proposal for consideration obtain a copy of our bye-laws. They are available free of charge upon written request to the Company Secretary at c/o IHS Markit Legal Department,
IHS Markit Ltd., 4th Floor, Ropemaker Place, 25 Ropemaker Street, London, England EC2Y 9LY.
Director Share Ownership Guidelines
We believe that our nonemployee directors should have a significant equity interest in the Company. Our Board has adopted an ownership policy in
our Corporate Governance Guidelines that requires
21
directors to hold common shares with an aggregate value (measured at the market price at the time of purchase or grant multiplied by the number of common shares) of at least five times the
Boards annual cash retainer. Vested stock options which are not exercised are not considered for the purposes of director equity ownership. Directors have five years to achieve the holding requirement. As of the December 31, 2016, all of
our current directors held shares in excess of their holding requirement except for Mr. Rosenthal, who has until June 2019 to meet his holding requirement.
We also have a hedging and pledging policy for executive officers and directors in our policy on trading securities that (a) prohibits them from engaging in any hedging transactions that are designed to hedge
or speculate on any change in the market value of IHS Markit equity securities, and (b) requires pre-clearance before allowing them to hold IHS Markit securities in margin accounts or pledge IHS Markit securities as collateral.
Director Compensation
Our nonemployee directors
receive compensation for their service on our Board. The compensation is composed of cash retainers and equity awards. In addition, each of our directors is reimbursed for reasonable expenses. The following table sets forth information concerning
the nonemployee director compensation program in effect at the 2016 fiscal year-end.
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Director Compensation
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($)
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Board Retainer
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90,000
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Lead Director Retainer
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50,000
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Committee Chair Retainer
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Nominating and Corporate Governance Committee
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17,500
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All other committees
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30,000
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Committee Member Retainer
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Audit Committee
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15,000
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All other committees
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10,000
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Annual Equity Award
(1)
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180,000
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(1)
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The shares underlying the annual equity award value are determined by dividing the value on the grant date by the closing price of our shares on the grant date. Directors may
choose to defer receipt of the shares underlying the restricted share units until after their termination of service.
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Nonemployee
director compensation is reviewed annually by the Nominating and Governance Committee, with the assistance of Pay Governance LLC (Pay Governance), the committees compensation consultant. The above director compensation was
established by the committee in August 2016, after completion of the Merger. All equity awards for nonemployee directors will be determined by the Non-Employee Director Equity Compensation Policy and issued pursuant to the 2014 IHS Markit Ltd.
Equity Incentive Award Plan. Directors may elect to defer their cash retainers to deferred share units.
Our bye-laws provide that we shall indemnify
our officers and directors in respect of their actions and omissions, except in respect of their fraud or dishonesty, and that we shall advance funds to our officers and directors for expenses incurred in their defense on condition to repay the
funds if any allegation of fraud or dishonesty is proved. Our bye-laws provide that the shareholders waive all claims or rights of action that they might have, individually or in right of the Company, against any of the companys directors or
officers for any act or failure to act in the performance of such directors or officers duties, except in respect of any fraud or dishonesty of such director or officer.
In addition, we have entered into agreements with our officers and directors to indemnify them against expenses and liabilities to the fullest extent permitted by law. These agreements also provide, subject
22
to certain exceptions, for indemnification for related expenses including, among others, attorneys fees, judgments, penalties, fines and settlement amounts incurred by any of these
individuals in any action or proceeding.
We have also purchased and maintain a directors and officers liability policy for the benefit of
any officer or director in respect of any loss or liability attaching to him or her in respect of any negligence, default, breach of duty or breach of trust, whether or not we may otherwise indemnify such officer or director.
Director Compensation During Fiscal Year 2016
The
following table sets forth information concerning the compensation of each of our nonemployee directors during the fiscal year beginning December 1, 2015 and ending November 30, 2016. Directors did not receive any stock options, non-equity
incentive plan compensation, or any other compensation. Directors do not participate in defined benefit and actuarial pension plans or nonqualified defined contribution plans.
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Name
(1)
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Fees
Earned or
Paid
in Cash
(2)
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Stock
Awards
($)
(3)
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Total ($)
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Dinyar S. Devitre
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116,667
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165,161
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281,828
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Ruann F. Ernst
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46,500
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46,500
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William E.
Ford
(4)
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43,750
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74,248
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117,998
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Balakrishnan Iyer
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|
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44,563
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|
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44,563
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Robert P. Kelly
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|
|
152,084
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189,952
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342,036
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Deborah McWhinney
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44,563
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44,563
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Jean-Paul Montupet
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42,625
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42,625
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Richard Roedel
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46,500
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46,500
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Gillian H.
Denham
(5)
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50,000
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132,186
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182,186
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Timothy J.A.
Frost
(5)
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25,000
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132,186
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157,186
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(1)
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Edwin D. Cass, Cheng Chi Sung, and Anne Walker served as directors of Markit from the beginning of the fiscal year through the close of the Merger. None of these former directors
received compensation from Markit. James A. Rosenthal has served as a director throughout the fiscal year, but voluntarily waived his compensation as he was an executive officer of Morgan Stanley until December 31, 2016. Please see Item
13. Certain Relationships and Related Transactions, and Director IndependenceCertain Relationships and Related TransactionsCredit Agreement. These directors are excluded from the table above.
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(2)
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Fees Earned or Paid in Cash are reported on a post-Merger basis (July 12, 2016 through November 30, 2016) for legacy IHS directors (Dr. Ernst, Ms. McWhinney, Messrs.
Iyer, Montupet and Roedel). Includes the value of deferred share units granted in the first quarter of fiscal year 2017 to Messrs. Ford, Kelly and Roedel in lieu of cash fees earned in the fourth quarter of fiscal year 2016. The deferred share units
will be distributed in IHS Markit common shares after the directors service terminates.
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(3)
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For share awards granted prior to the close of the Merger on July 12, 2016, the value was calculated in accordance with IFRS 2. For share awards granted after the close of
the Merger on July 12, 2016, the value was calculated in accordance with FASB ASC Topic 718. In both cases, any estimated forfeitures are excluded from the values reported in this table. For a discussion of the assumptions made in valuing these
awards and a description of how we factor forfeitures into our overall equity compensation expense, refer to Note 14 - Stock-Based Compensation to our financial statements contained in our Annual Report on Form 10-K for the 2016
fiscal year.
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(4)
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Mr. Ford did not receive compensation for his services as a director of Markit. He began receiving compensation upon the close of the Merger, July 12, 2016.
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(5)
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Ms. Denham and Mr. Frost ceased to be directors upon close of the Merger.
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23
The following table sets forth information concerning the outstanding share awards held by each director on
November 30, 2016:
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Outstanding Share Awards at End of Fiscal Year
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Name
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Deferred
Share
Units #
(1)
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|
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Unvested Restricted
Share Awards and
Units #
(2)
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Total Share Awards
Outstanding at
Fiscal Year End #
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Dinyar S. Devitre
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|
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3,746
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3,746
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Ruann F. Ernst
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|
|
54,953
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|
|
|
5,165
|
|
|
|
60,118
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William E. Ford
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|
|
|
|
|
|
2,004
|
|
|
|
2,004
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|
Balakrishnan Iyer
|
|
|
58,827
|
|
|
|
5,165
|
|
|
|
63,992
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|
Robert P. Kelly
|
|
|
|
|
|
|
4,238
|
|
|
|
4,238
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|
Deborah McWhinney
|
|
|
7,044
|
|
|
|
5,165
|
|
|
|
12,209
|
|
Jean-Paul Montupet
|
|
|
21,957
|
|
|
|
5,165
|
|
|
|
27,122
|
|
Richard
Roedel
(3)
|
|
|
124,785
|
|
|
|
5,165
|
|
|
|
129,950
|
|
(1)
|
Represents (a) deferred share units held by legacy IHS directors that were acquired during his or her service in lieu of receiving cash retainers to IHS Inc. and will be
delivered in IHS Markit shares upon termination of service, and (b) vested annual equity awards that have not yet been released because the director deferred receipt until after termination of service. The table excludes deferred share units
that were granted after the close of the fiscal year for service in the fourth quarter of the fiscal year. The amount deferred for these deferred share units is reported in the compensation table above.
|
(2)
|
Represents unvested restricted share awards and restricted share units held by the directors at fiscal year end. These unvested awards vested on December 1, 2016 except that
Messrs. Devitre and Kelly have 2,856 and 3,570 restricted share awards, respectively, that will vest on May 5, 2017.
|
(3)
|
Mr. Roedel has gifted all of his equity grants to his spouse.
|
24
Executive Officers
Set forth below is information concerning our executive officers as of February 21, 2017.
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
Jerre Stead
|
|
74
|
|
Chairman and Chief Executive Officer
|
Lance Uggla
|
|
54
|
|
President and Chief Integration Officer, Director
|
Shane Akeroyd
|
|
52
|
|
Executive Vice President-Global Head of Account Management and Regional Head of Asia Pacific
|
Jane Okun Bomba
|
|
54
|
|
Executive Vice President and Chief Administrative Officer
|
Jonathan Gear
|
|
46
|
|
Executive Vice President, Resources and Transportation
|
Sari Granat
|
|
46
|
|
Executive Vice President and General Counsel
|
Randy Harvey
|
|
63
|
|
Executive Vice President and Chief Technology Officer
|
Todd Hyatt
|
|
56
|
|
Executive Vice President and Chief Financial Officer
|
Adam Kansler
|
|
47
|
|
Executive Vice President-Financial Markets
|
Yaacov Mutnikas
|
|
62
|
|
Executive Vice President-Financial Market Technologies
|
Jeffrey Sisson
|
|
60
|
|
Executive Vice President and Chief of Staff
|
Michele Trogni
|
|
51
|
|
Executive Vice President-Consolidated Markets and Solutions
|
Daniel Yergin
|
|
70
|
|
Vice Chairman
|
Michael Easton
|
|
44
|
|
Senior Vice President and Chief Accounting Officer
|
Executive officers are appointed by our Board. Unless otherwise indicated, all executive officers were appointed to their current
positions as of the completion of the Merger. As of the completion of the Merger on July 12, 2016, Jeffrey Gooch, Kevin Gould and Stephen Wolff, Markits chief financial officer, president and head of corporate development, respectively,
were no longer executive officers of IHS Markit.
Heather Matzke-Hamlin served as our Senior Vice President and Chief Accounting Officer from
July 12, 2016 until February 15, 2017, when she stepped down from that position to serve as an advisor to our Chief Financial Officer.
Information about Mr. Stead and Mr. Uggla is provided under Business Experience and Qualification of Board Members. A brief biography for
each of our other executive officers and key members of our executive team follows.
Shane Akeroyd
Shane Akeroyd is executive vice president, global head of account management and regional head of Asia Pacific for IHS Markit. Mr. Akeroyd joined Markit as
head of sales in 2008 from RBC Capital Markets where he was head of global debt markets distribution and a member of the executive management team. Prior to RBC, Mr. Akeroyd was vice chair, capital market sales at TD Securities, responsible for
Europe, Asia and Australia. He holds a B.S. (Hons) in economics from University College London.
25
Jane Okun Bomba
Jane Okun Bomba is executive vice president and chief administrative officer of IHS Markit, supporting the human resources, communications, marketing, investor relations and sustainability teams. Ms. Okun
Bomba joined IHS 12 years ago and helped complete its successful IPO, led the architecture of a global ERP and launched the corporate sustainability program. Previously, she served in corporate finance and investor relations leadership positions at
Genesis, Velocom, MediaOne Group and Northwest Airlines. Ms. Okun Bomba holds a B.G.S. and an MBA from the University of Michigan.
Jonathan Gear
Jonathan Gear is executive
vice president of resources and transportation for IHS Markit, including business lines supporting the automotive, energy, chemicals, maritime and aerospace industries. Mr. Gear was previously executive vice president of resources and
transportation for IHS. Earlier, he served in multiple senior vice president positions and as president/COO of IHS CERA. Mr. Gear previously held leadership positions at Activant Solutions, smarterwork.com and Booz Allen Hamilton. He holds a
B.A. from the University of California, Berkeley and an MBA from Stanford Graduate School of Business.
Sari Granat
Sari Granat is executive vice president and general counsel at IHS Markit, responsible for the companys legal, compliance, regulatory and government affairs,
enterprise risk and information security functions. Prior to joining Markit in 2012, Ms. Granat was lead counsel and chief administrative officer of TheMarkets.com LLC. She has served in senior legal and strategy positions at media and
technology companies including Dow Jones & Company and Kaplan, Inc. Sari holds a B.A. in English from Yale University and a J.D. from New York University School of Law.
Randy Harvey
Randy Harvey is executive vice
president and chief technology officer of IHS Markit. As senior vice president and CTO of IHS, Mr. Harvey led information technology operations, infrastructure and product development teams that delivered world-class products and customer
support throughout the solution lifecycle. Mr. Harvey previously held senior management positions at Seismic Micro Technology, Reynolds & Reynolds, and Sterling Commerce. He has a B.A. from the University of Maryland.
Todd Hyatt
Todd Hyatt is executive vice
president and chief financial officer of IHS Markit. Mr. Hyatt served in those same roles at IHS after previously serving as chief information officer, senior vice president of FP&A, and leading the finance organization for the
companys engineering segment. He also worked for LoneTree Capital, US WEST/MediaOne, AT&T, Arthur Young and Arthur Andersen. He holds a B.S. in accounting from the University of Wyoming and an M.S. in management from Purdue University.
Adam Kansler
Adam Kansler is
executive vice president of the financial markets business at IHS Markit, which includes pricing and reference data, trade processing, valuations, indices, and economic and country risk products. Mr. Kansler previously served as global co-head
of Markits information division and head of North American operations. Earlier, Mr. Kansler was Markits chief administrative officer and
26
general counsel, leading human resources, legal, corporate communications, risk, regulatory and strategic alliances. Before joining Markit in 2009, Mr. Kansler spent 17 years with Proskauer
LLP as a corporate partner. He holds a B.A. in economics from Hobart College and received his J.D. from Columbia University School of Law.
Yaacov Mutnikas
Yaacov Mutnikas is executive vice president of financial market technologies, with
responsibility for software products including Enterprise Data Management, Markit Analytics, ThinkFolio, Information Mosaic, WSO and Global Equities. He has over thirty years of experience from previous roles as senior advisor to the Bank of
England, head of risk architecture at the FSA, head of business architecture at Bridgewater and CTO at Algorithmics. Mr. Mutnikas holds an M.Sc. in philosophy of science from Kings College London and an M.Sc. in finance and investment banking
from Reading University.
Jeffrey Sisson
Jeffrey Sisson is executive vice president and chief of staff for IHS Markit. From 2005 to 2016, Mr. Sisson served as senior vice president and chief human resources officer for IHS. Prior to IHS, he was
senior vice president, human resources, EaglePicher, Inc.; senior director, human resources, Snap-on Inc.; and director, human resources, Whirlpool Corporation. Jeff earned a B.A. and an M.A. from Michigan State University.
Michele Trogni
Michele Trogni is executive
vice president of consolidated markets and solutions for IHS Markit. She was previously co-head of Markits Solutions Division and was responsible for Markits managed services businesses, which included KYC, KY3P, Markit digital and
Markit tax solutions. Prior to joining Markit in 2013, Ms. Trogni had over 25 years of experience in banking, most recently acting as group chief information officer for UBS and, prior to that, as head of UBS investment bank operations. She
holds a B.A. (Hons) in accounting from Northumbria University and is a qualified accountant (ACCA).
Daniel Yergin
Daniel Yergin is vice chairman of IHS Markit. The Pulitzer-Prize winning author of The Prize and The Quest, Dr. Yergin was vice chairman of IHS and founded IHS
CERA. He is an authority on energy, international politics and economics. His awards include Lifetime Achievement from the Prime Minister of India and the United States Energy Award for lifelong achievements in energy and the promotion of
international understanding. He holds a B.A. from Yale University and a Ph.D. from Cambridge University, where he was a Marshall Scholar.
Michael Easton
Michael Easton is Senior Vice President and Chief Accounting Officer for IHS Markit.
Previously, Mr. Easton was Senior Vice President-Financial Planning and Analysis of IHS Markit since July 2016 and of IHS Inc. from October 2012 to July 2016. Prior to joining IHS Inc., Mr. Easton was a Senior Manager at Ernst &
Young LLP and spent over 14 years in audit services. Mr. Easton holds a masters degree in accounting from Brigham Young University and is a Certified Public Accountant in the state of Colorado.
Section 16(a) Beneficial Ownership Reporting Compliance
The executive officers and directors of IHS Markit are voluntarily complying with the rules of Section 16(a) of the Exchange Act that require ownership reports to be filed on Forms 3, 4 and 5 with
27
the SEC. Based solely on our review of the copies of such forms we have received and written representations from our executive officers and directors that they filed all applicable reports, we
believe that, since the Merger, all filings normally required by executive officers and directors under Section 16(a) have been voluntarily filed on a timely basis.
Item 11. Executive Compensation
Report of the Human Resources Committee
The Human Resources Committee of the Board has reviewed and discussed with Company management the Compensation Discussion and Analysis
(CD&A). Based on such review and discussion the Human Resources Committee has recommended to the Board of Directors that the CD&A be included in the Companys Annual Report on Form 10-K and the proxy statement for the
Companys 2017 annual general meeting of shareholders.
Respectfully submitted on February 21, 2017 by the members of the Human Resources
Committee of the Board:
Dr. Ruann F. Ernst, Chair
Mr. Robert P. Kelly
Mr. Jean-Paul Montupet
Mr. James A. Rosenthal
Former Members of
the Human Resources and Compensation Committee of the Markit Ltd. Board (serving from December 1, 2015 to July 12, 2016):
Mr. William E. Ford
Ms. Gillian H. Denham
The foregoing
report of the Human Resources Committee does not constitute soliciting material and shall not be deemed filed or incorporated by reference into any other filing by IHS Markit under the Securities Act of the Exchange Act.
Compensation Discussion and Analysis
Overview
This has been a historic year with
the Merger of our two companies, Markit and IHS, and we have a complex and compelling compensation story to tell. In July 2016, we completed the Merger, resulting in Markit emerging as the surviving company with the name IHS Markit. This transaction
created strong value for shareholders, delivering fiscal year 2016 (FY16) shareholder return of 23 percent, which is 13 percent higher than that of the S&P 500 Index (discussed further in the Financial Results section below). In
accordance with the terms of the Merger Agreement, IHS stockholders received 3.5566 common shares of IHS Markit for each share of IHS common stock they owned and the IHS common stock was delisted from the New York Stock Exchange and deregistered
under the Exchange Act. IHS Markit was listed on NASDAQ under the INFO ticker symbol.
As is often the case for any two companies coming
together in a merger of equals, IHS and Markit had different compensation philosophies and practices. During the few months since the Merger closed, we have been in the process of building a new total rewards program that includes cash compensation,
short-term and long-term incentives, and benefits. We have evaluated pay practices from both companies, choosing to keep the best, while adopting new policies and practices to deliver competitive
28
packages to our colleagues and ensuring strong shareholder alignment. We are proud of the progress we have made in the six months since the close of the Merger, and we will work through the end
of fiscal year 2017 (FY17) to fully implement our new compensation program.
In FY17, our executive officers will have a compensation
program that includes (a) a competitive base salary, (b) an annual incentive tied to pre-established financial goals, and (c) long-term incentives also tied to pre-established goals aimed to motivate and retain executives while
driving the long-term performance of the Company.
Immediately upon close of the Merger, the IHS Markit Board appointed the Human Resources Committee
(the Committee) and tasked the Committee with developing a total rewards strategy to attract and retain top talent, drive company performance, and align with shareholders. With that overarching directive, we have already accomplished the
following for executive compensation:
|
|
|
Appointment of an independent compensation consultant holding no previous relationships with either IHS or Markit.
|
|
|
|
Agreement on the guiding principles for executive compensation.
|
|
|
|
Establishment of a new annual incentive program under which incentive payments will be based on achievement of financial metrics.
|
|
|
|
Adoption of a robust incentive compensation recoupment (clawback) policy.
|
|
|
|
Elimination of virtually all perquisites except those related to relocation or international assignments.
|
|
|
|
Design of a new long-term incentive program that, for the CEO and the President, will be solely in the form of performance share units with a three-year
performance period tied to Earnings per Share (EPS) growth and Total Shareholder Return (TSR).
|
|
|
|
Approval of equity award terms that do not permit single-trigger acceleration of unvested equity in the event of a change in control.
|
|
|
|
Adoption of hedging and pledging policies.
|
|
|
|
Establishment of share ownership guidelines for executive officers and the Board.
|
Most decisions affecting the FY16 compensation of our executive officers were made prior to the completion of the Merger by the legacy Human Resources and Compensation Committee of the Markit board (the
Markit Committee) and the legacy Human Resources Committee of the IHS board (the IHS Committee). Because we only had one full quarter as a combined company in FY16, our executive officers compensation in FY16 is based
on the programs and philosophies of the respective legacy companies. Pre-Merger compensation decisions (those made before July 12, 2016) are not decisions of the current Committee, but all post-Merger compensation decisions (those made after
July 12, 2016) represent decisions made by the current Committee.
Historically, Markit has been a foreign private issuer (FPI) under
the rules of the SEC. IHS Markit continues to qualify as an FPI. As an FPI, we are not required to provide a CD&A and the related disclosure; however, we believe it is important to provide investors with transparent disclosure and a holistic
view of our past years executive compensation and our newly designed compensation philosophy and approach for IHS Markit.
Thus, we are voluntarily disclosing this information
. In addition, we intend to voluntarily provide for
say-on-pay and say-on-pay frequency advisory votes to shareholders at our 2017 annual general meeting of shareholders.
Our
disclosures are different than what would have been reported for a full year as a combined company. To determine the most highly compensated executive officers under the rules of the SEC,
29
we were required to consider a full fiscal year of compensation for executive officers who were previously employed by Markit and only post-Merger compensation for executive officers who were
previously employed by IHS. Going forward, these disclosures and tables will reflect 12 full months of compensation for all executive officers, and the Summary Compensation Table will reflect the most highly compensated executives without the
distortion that is created by this Merger year. As a result of including only post-Merger compensation for legacy IHS executive officers, the executive officers included in the FY16 Summary Compensation Table (the Named Executive
Officers or NEOs) and named below, other than the CEO and CFO, are legacy Markit executive officers.
|
|
|
Jerre Stead: Chairman of the Board and Chief Executive Officer (the CEO)
|
|
|
|
Lance Uggla: President and Chief Integration Officer and former Chief Executive Officer of Markit
|
|
|
|
Todd Hyatt: Executive Vice President and Chief Financial Officer (the CFO)
|
|
|
|
Shane Akeroyd: Executive Vice President, Global Head of Account Management and Regional Head of Asia Pacific
|
|
|
|
Sari Granat: Executive Vice President and General Counsel
|
|
|
|
Adam Kansler: Executive Vice President, Financial Markets
|
|
|
|
Jeffrey Gooch: former chief financial officer of Markit
|
|
|
|
Stephen Wolff: former head of Group Corporate Strategy of Markit
|
Financial Performance
In FY16, we successfully executed the Merger and delivered significant value to
shareholders, as demonstrated by the information in the below table. Accounting rules require that we report financial information as a combined company only from the date of the completion of the Merger through the close of the fiscal year. As
such, a full 12 months of combined results is not available. To show growth, the information below is provided by fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Performance
|
|
|
|
Markit
|
|
|
IHS
|
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
Revenue
(1)
|
|
$
|
1,113 million
|
|
|
$
|
1,165 million
|
|
|
$
|
2,184 million
|
|
|
$
|
2,286 million
|
|
Adjusted EPS (legacy companies)
(2)
|
|
$
|
1.44
|
|
|
|
|
|
|
$
|
1.60
|
|
|
|
|
|
Adjusted EPS (IHS
Markit)
(3)
|
|
|
|
|
|
$
|
1.80
|
|
|
|
|
|
|
$
|
1.80
|
|
Stock Price as of November 30
|
|
$
|
29.50
|
|
|
$
|
35.94
|
|
|
$
|
34.67
|
(4)
|
|
$
|
35.94
|
|
(1)
|
Revenue for IHS and Markit is reported on the IHS Markit fiscal year basis ending November 30, except for FY15 revenue for Markit, which is reported on
Markits historical fiscal year basis ending December 31. IHS revenue represents the combined revenue from the Resources, Transportation and Consolidated Markets and Solutions segments. Markit revenue represents FY15 revenue for Markit and
pro forma FY16 revenue from the Financial Services segment. Please see Note 3 to our audited financial statements in our annual report on Form 10-K for the year ended November 30, 2016 for further information on our pro forma FY16 revenue.
|
(2)
|
Adjusted EPS for FY15 for IHS reflects the reported Adjusted EPS for IHS for its
stand-alone fiscal year from December 1, 2014 to November 30, 2015. Adjusted EPS for Markit reflects the reported Adjusted EPS for Markit for its stand-alone fiscal year from January 1, 2015 to December 31, 2015.
|
(3)
|
Adjusted EPS for FY16 is for the IHS Markit fiscal year from December 1, 2015 to November 30, 2016, and includes the results from the Financial
Services segment for the period from the completion date of the Merger until November 30, 2016.
|
(4)
|
The November 30, 2015 stock price for IHS has been adjusted for the 3.5566 Merger exchange ratio.
|
Throughout this CD&A, we refer to Free Cash Flow, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted EPS. These are non-GAAP financial measures used to
supplement our financial statements, which are based on U.S. generally accepted accounting principles (GAAP). For a definition and discussion of these measures, see Definitions of Non-GAAP Financial Measures at the end of this CD&A.
We also refer to Revenue and Global Revenue which are GAAP financial measures.
30
Shareholder Return
As shown below, our Total Shareholder Return since the Markit initial public offering in 2014 was 14 percent higher than the S&P 500 Index. A $100 investment made on June 19, 2014 in our stock would
be worth approximately $135 as of November 30, 2016, whereas the same investment in the S&P 500 Index would be worth approximately $118.
For 2016, our Total Shareholder Return also exceeded the S&P 500 Index by 13 percent. A $100 investment made on
December 1, 2015 in our stock would be worth approximately $122 as of November 30, 2016, whereas the same investment in the S&P 500 Index would be worth approximately $108.
31
Leadership Structure
The leadership team of IHS Markit was structured to incorporate executive talent from IHS and Markit. Mr. Stead, former Chairman and CEO of IHS, is our current Chairman of the Board and CEO. Mr. Uggla,
former Chairman and CEO of Markit, is our President and Chief Integration Officer. Mr. Uggla will assume the role of Chairman of the Board and CEO upon Mr. Steads retirement in fiscal year 2018 (FY18), a succession that was announced
at the time of the Merger.
The table below shows our executive officers and their legacy companies:
|
|
|
|
|
|
|
Executive Officers From Legacy IHS
|
|
Executive Officers From Legacy Markit
|
Name
|
|
Title at IHS Markit
|
|
Name
|
|
Title at IHS Markit
|
Jerre Stead
|
|
Chairman of the Board and CEO
|
|
Lance Uggla
|
|
President and Chief Integration Officer
|
Todd Hyatt
|
|
EVP and CFO
|
|
Shane Akeroyd
|
|
EVP, Global Head of Account Mgmt
|
Daniel Yergin
|
|
Vice Chairman of the Company
|
|
Sari Granat
|
|
EVP, General Counsel
|
Jonathan Gear
|
|
EVP, Resources and Transportation
|
|
Adam Kansler
|
|
EVP, Financial Markets
|
Randall Harvey
|
|
EVP, Chief Technology Officer
|
|
Yaacov Mutnikas
|
|
EVP, Financial Market Technologies
|
Jane Okun Bomba
|
|
EVP, Chief Administrative Officer
|
|
Michele Trogni
|
|
EVP, Consolidated Markets
|
Jeff Sisson
|
|
EVP, Chief of Staff
|
|
|
|
|
Detailed information about our leadership team can be found under Item 10. Directors, Executive Officers and Corporate
Governance Executive Officers.
Shareholder Engagement
Engagement with our shareholders is a significant priority for us. As a company, we believe in broad and open access and invest significant time and resource into investor outreach, as detailed below:
|
|
|
We host quarterly earnings calls during which our CEO and CFO present a detailed analysis of our performance, overview of progress on key initiatives and updates
to annual guidance.
|
|
|
|
We remain available to answer questions from shareholders and analysts and have a goal of returning all calls within 24 hours.
|
|
|
|
We host an annual investor day, to which anyone is invited and which we webcast and record for future viewing on our website. At this annual event, we provide
extensive information on our strategy, growth and profit drivers, and future opportunity and our executive officers and members of our Board are present to discuss and answer any questions or concerns a shareholder may have.
|
|
|
|
We also do extensive investor outreach, traveling to many cities to visit both current and prospective investors, and we are interested in listening to and
understanding our shareholders positions on executive pay, pay-for-performance, and governance, among other subjects. In addition, our management team engages regularly with representatives from the major proxy advisory firms.
|
|
|
|
We have a very robust investor relations program and continue to meet regularly with a broader group of our shareholders, analysts, portfolio managers, and
governance groups to ensure we understand their perspectives on IHS Markit.
|
32
Based on all of these meetings and the feedback we have received, we believe we are meeting shareholder expectations
with regard to executive compensation. We have noted that some of our shareholders have expressed a concern about our run rate for our equity compensation. We are actively managing our share usage to drive improvement. We also have an active share
buyback program in place that helps manage dilution from our presently outstanding equity awards.
Additionally, we intend to be transparent in our pay
programs and pay practices. As an FPI, Markit has not, historically, been required to provide for a shareholder vote on executive compensation, but IHS has. We believe it is important to maintain the same level of compensation disclosure IHS
provided; thus, we are voluntarily providing this CD&A and related compensation tables. At our 2017 annual general meeting, shareholders will have an opportunity to approve, on an advisory basis, the compensation of our NEOs. Shareholders will
also have an opportunity to approve a proposal to hold an annual advisory vote on executive pay in future years.
Key compensation information was
included in the proxy statements related to the Merger, and IHS stockholders approved, on an advisory basis, the specified compensatory arrangements between IHS and its named executive officers related to the Merger at the special meeting of
shareholders held to approve the terms of the Merger.
Corporate Governance
The Committee has adopted compensation governance policies and practices that are designed to ensure effective oversight of the Companys executive compensation program while driving Company performance and
aligning managements interests with our shareholders:
|
|
|
Corporate Governance Practice
|
|
Description
|
|
|
Pay-for-Performance
|
|
We tie compensation to performance by having the majority of total target compensation comprised of performance-based components that are linked to
financial goals of the Company.
|
|
|
Share Ownership Guidelines
|
|
Senior executives and directors are required to hold our common shares with an aggregate value equal to a multiple of base salary or annual director
fees, as applicable. Each of the CEO and the President are required to hold five times salary; the Vice Chairman of the Company is required to hold four times salary; and each other executive officer is required to hold three times salary. The
non-employee directors of the Board are required to hold five times their annual board retainer.
|
|
|
Hedging and Pledging Policy
|
|
We have a hedging and pledging policy for executive officers and directors that (a) prohibits them from engaging in any hedging transactions that
are designed to hedge or speculate on any change in the market value of IHS Markit equity securities, and (b) requires pre-clearance before allowing them to hold IHS Markit securities in margin accounts or pledge IHS Markit securities as
collateral.
|
33
|
|
|
Corporate Governance Practice
|
|
Description
|
|
|
Incentive Compensation Recoupment (clawback) Policy
|
|
We may require the return, repayment or forfeiture of any annual or long-term incentive compensation payment or award, whether in the form of cash
or equity, made or granted to any current or former executive officer during the three-year period preceding a Triggering Event, as defined in our policy on recovery of incentive compensation.
|
|
|
Engagement with Shareholders
|
|
We regularly engage with shareholders throughout the year regarding executive compensation and corporate governance matters.
|
|
|
Limit on Equity Dilution
|
|
We have made a commitment to shareholders limiting annual equity award dilution (excluding employee stock purchase plan purchases) to a maximum
annual run rate for FY17 at 1.25 percent of total shares outstanding and we intend to continue to manage and improve our equity award share usage.
|
|
|
No Excise Tax Gross-ups
|
|
No NEO has any excise tax gross-up protection.
|
|
|
No Shareholder Rights Agreement
|
|
We do not currently have a stockholder rights agreement, commonly referred to as a poison pill.
|
|
|
No Single Trigger on Equity Awards
|
|
Beginning in FY17, we have unified equity award terms so that future awards will not automatically vest in the event of a change in
control
|
|
|
Independent Compensation Committee
|
|
All members of the Committee are independent as required by NASDAQ, our Corporate Governance Guidelines and the Committee charter.
|
|
|
Independent Compensation Consultant
|
|
The Committee has retained an independent compensation consultant that performs no other services for the Company and has no conflicts of
interest.
|
34
Legacy FY16 Executive Compensation Programs and Actions
Legacy Compensation Plans
For FY16, the executive officers
received compensation under their applicable legacy Markit or IHS compensation programs (base salary, annual incentive, and long-term incentive plans).
|
|
|
Legacy Markit Compensation Program
|
|
Legacy IHS Compensation Program
|
A. Base Salary
|
|
A. Base Salary
|
|
|
B. Discretionary annual performance
compensation is determined as a total incentive amount and delivered in a mix of (i) cash bonus and (ii) equity. The overall amount each individual receives is based on the achievement of individual financial and strategic objectives and
Company performance.
(i) For FY16, the annual cash incentive was funded based on the achievement of Revenue and
Adjusted EBITDA goals, and was allocated on an individual basis in consideration of each executives performance compared to the prior years performance and as a percentage of his or her total direct compensation.
(ii) Equity was delivered in
form of restricted share awards with a three-year graded vesting period. Equity was granted in consideration of each executives performance compared to the prior years performance and as a percentage of his or her direct
compensation.
|
|
B. Annual Incentive Plan
(AIP) is based on financial and non-financial metrics. Each executive officer is designated a target payout as a percent of salary with opportunity to earn above and below target payouts based on actual performance.
Under the legacy IHS annual incentive plan, executive officers were
provided with target incentive opportunities that would pay out above or below target based on financial performance. The payouts were based on four metrics that represented key business performance areas for legacy IHS: Free Cash Flow, Adjusted
EBITDA Margin, Global Revenue and Customer Delight.
For FY16,
the AIP paid out at 112.5 percent of target based on achievement of goals.
C. Long term incentives were delivered in the form of restricted share units (RSUs) with a three-year cliff vest and performance share units (PSUs) with a
three-year performance period. Competitive equity ranges were established by position and level, with the final award determined by an individual executives past and expected future performance.
|
Base Salary
In January 2016, the Markit Human Resources Committee approved an increase in Mr. Ugglas base salary from $750,000 to $800,000, stated in U.S. dollars
(USD).
In October 2016, after reviewing internal equity and external market data, the Committee increased Ms. Granats salary
from $400,000 to $450,000 to bring her salary more in line with the market.
In June 2015, prior to the Merger, Mr. Stead was re-appointed as CEO
of IHS after previously retiring as CEO of IHS in May 2013. At the time of his re-appointment, the IHS Committee approved a base salary of $745,428. In addition, based on prior service to IHS, Mr. Stead receives annual payments totaling
$214,572 that were previously earned from the IHS Supplemental Income Plan. Mr. Stead requested that payments from the Supplemental Income Plan be deducted from the market competitive value in determining his base salary. At that time, a
competitive salary for his position as CEO of IHS was approximately $1 million. Mr. Steads target bonus is calculated based on $960,000, the combination of his base salary and annual Supplemental Income Plan payment.
35
Annual Incentive Plan and Bonus
Because our financial results are combined only on a post-Merger basis, the Committee decided to keep the executive officers under the terms of their respective legacy annual performance and incentive plans for
FY16. Payments for legacy Markits annual performance plan are discretionary and described below, under Legacy Markit Annual Incentive. Payments under the legacy IHS AIP were based upon the achievement of specific financial metrics,
and the Committee used no further discretion to determine the amounts received by each NEO. These payments are described below under Legacy IHS Annual Incentive Plan.
Legacy Markit Annual Incentive
. Legacy Markits overall annual cash incentive pool was determined as a percentage of Revenue for the Financial Services segment and Adjusted EBITDA. Under the legacy
Markit compensation program, annual performance compensation included a mix of cash incentive and restricted share awards.
The Committee determined
FY16 cash incentives after a comprehensive review and evaluation of the Company and individual performance for the year, both on a year-over-year basis and as compared to key competitors.
|
|
|
Company performance: Management reviewed the Companys forecasted 2016 financial performance with the Committee in December 2016, and the Committee assessed
full-year actual financial results before finalizing compensation decisions in January 2017.
|
|
|
|
Individual performance: The Committee considered the following individual contributions of the President and each other NEO (other than Mr. Gooch and
Mr. Wolff, who were not eligible to receive any incentive compensation for 2016 due to their departure from the Company following the Merger):
|
Mr. Uggla provided outstanding leadership of Markit and of IHS Markit, including delivering solid financial results. Mr. Uggla successfully negotiated the Merger for Markit, guided Markit through the
closing, and then led the integration program for the combined Company. Mr. Uggla has met extensively with colleagues, customers and shareholders to ensure that all constituencies understand the strategy behind the Merger and the potential
opportunity available and value to be created through this transaction.
Mr. Akeroyd successfully led the sales teams within Markit
and subsequently the global account management team within IHS Markit, building deeper relationships with our customers and growing the pipeline of business. He successfully positioned IHS Markit as a company able to deliver best-in-class
information, insight and analytics to our customers and delivered training on our positioning to colleagues globally. Mr. Akeroyd coordinated across product, sales and marketing teams to deliver the initial revenue synergy deals and built the
pipeline to deliver more transactions in 2017.
Ms. Granat led Markit through the successful closing of the Merger and assumed the
expanded role of general counsel for the Company. Ms. Granat completed five other M&A transactions and resolved a number of competition claims and/or investigations all with no finding of wrongdoing or payment of fines.
Mr. Kansler delivered solid business results for Markits Information division prior to the Merger and for IHS Markits Financial
Markets division post-Merger, increasing Revenue and Adjusted EBITDA in line with our strategy. Mr. Kansler completed the acquisitions and successful integrations of Prism, a global leader in complex derivatives valuations to complement the
divisions existing valuations businesses, and the HSBC ALBI index, which forms part of IHS Markits index portfolio. Following the Merger, Mr. Kansler delivered
36
long-term cost savings through careful cost management and completed the full integration of country risk content to the Connect platform to enable integrated access for our customers.
|
|
|
|
|
Legacy Markit Annual Incentive
|
|
Name
|
|
FY16 Annual Incentive ($)
|
|
Lance Uggla
|
|
|
1,100,000
|
|
Shane Akeroyd
|
|
|
300,000
|
|
Sari Granat
|
|
|
300,000
|
|
Adam Kansler
|
|
|
300,000
|
|
Legacy IHS Annual Incentive Plan
.
Under the legacy IHS annual incentive plan, executive officers were provided
with target incentive opportunities that would pay out above or below target based on financial performance. The payouts were based on four metrics that represented key business performance areas for legacy IHS: Free Cash Flow, Adjusted EBITDA
Margin, Global Revenue and Customer Delight. After the close of the year, performance was measured against the annual incentive plan metrics to determine the amount earned, as shown in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY16 Legacy IHS Annual Incentive Plan Payout
|
|
Metric
|
|
Weighting
|
|
|
Payout Level
(1)
|
|
|
FY16
Goal
|
|
|
Goal as a % of
Target
|
|
|
FY16
Results
|
|
|
AIP Level
Achieved
|
|
Free Cash Flow
(2)
|
|
|
30
|
%
|
|
Threshold
Target
Maximum
|
|
|
30%
100%
150%
|
|
|
$
$
$
|
475M
500M
525M
|
|
|
|
96.0
100.0
106.0
|
%
%
%
|
|
$
|
525M
|
|
|
|
150
|
%
|
Adjusted EBITDA Margin
(2)
|
|
|
25
|
%
|
|
Threshold
Target
Maximum
|
|
|
30%
100%
150%
|
|
|
|
32.8
33.2
33.6
|
%
%
%
|
|
|
98.5
100
101.5
|
%
%
%
|
|
|
34.6
|
%
|
|
|
150
|
%
|
Global Revenue
(3)
|
|
|
25
|
%
|
|
Threshold
Target
Maximum
|
|
|
30%
100%
150%
|
|
|
$
$
$
|
2,330M
2,390M
2,449M
|
|
|
|
97.5
100
102.5
|
%
%
%
|
|
$
|
2,286M
|
|
|
|
0
|
%
|
Customer Delight
(4)
|
|
|
20
|
%
|
|
Threshold
Target
Maximum
|
|
|
30%
100%
150%
|
|
|
|
72
74
75
|
%
%
%
|
|
|
97.3
100.0
101.4
|
%
%
%
|
|
|
75
|
%
|
|
|
150
|
%
|
Calculated AIP Payout (as a Percent of Target)
|
|
|
|
112.5
|
%
|
(1)
|
Percentage of target earned is interpolated between these points. No amount is paid below the level identified as Threshold.
|
(2)
|
Free Cash Flow and Adjusted EBITDA Margin are non-GAAP financial measures. See Definitions of Non-GAAP Financial Measures in this CD&A for definitions and a
discussion of Free Cash Flow and Adjusted EBITDA Margin.
|
(3)
|
Global Revenue is calculated in accordance with U.S. GAAP. For purposes of the legacy IHS AIP, Global Revenue is reported in our financial reports within the following operating
segments: Resources, Transportation, and CMS.
|
(4)
|
The Customer Delight metric for legacy IHS, the only non-financial metric included in the AIP, was measured with an ongoing, dedicated assessment of customers preferences
and product needs through surveys and follow-up contacts. Each year, a target goal for Customer Delight was established and performance was then evaluated throughout the year based on the results of external customer surveys. The Customer Delight
baseline (or threshold) goal for FY16 was 72 percent and was established based on the prior years performance. Target and stretch goals were assigned based on incremental gains to the established threshold goal. In FY16, actual performance for
Customer Delight was determined after the completion of two surveys and this performance was measured against the pre-established targets. For FY16, the target goal was a Customer Delight score of 74 percent, with a stretch goal of 75 percent.
Because the stretch goal was met, each of the legacy IHS executive officers received a payout of 150 percent of their target tied to Customer Delight. The amount earned for the Customer Delight portion was paid to the NEOs in the form of IHS common
stock to better align executive officers interests with stockholders interests as well as the interests of all other colleagues who receive an equity award when the Customer Delight goal is met.
|
The IHS free cash flow target goal for FY16 was lower than our FY15 cash flow. Our free cash flow goals will vary from year to year based on how we utilize our
cash and make investments. The target free cash flow goal is dependent upon our intended use of cash for strategic purposes, and will not always be higher than the prior years actual free cash flow.
37
Based on achievement of these goals, the following legacy IHS executive officers received actual annual incentive
payouts for the full fiscal year as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY16 Legacy IHS Annual Incentive Payments
|
|
Name
|
|
FY16 AIP Target as
a Percent of Salary
|
|
|
FY16 AIP
Target ($)
|
|
|
FY16 AIP Earned
Payment (%)
|
|
|
FY16 AIP
Earned
Payment ($)
|
|
Jerre Stead
|
|
|
120
|
(1)
|
|
|
1,152,000
|
|
|
|
112.5
|
|
|
|
1,296,000
|
|
Todd Hyatt
|
|
|
75
|
|
|
|
451,350
|
|
|
|
112.5
|
|
|
|
507,769
|
|
(1)
|
Mr. Steads annual AIP opportunity is 120 percent of fixed cash compensation that includes his base salary and payments from the IHS Supplemental Income Plan.
|
Awards of Long-Term Incentives (Equity)
Equity awards were approved by each legacy companys human resources committee in the first quarter of FY16, with the exception of Mr. Steads post-Merger grant.
CEO Equity Award
In August 2016, the
Committee approved a grant of PSUs, with a target grant date fair value of $6,155,700, to Mr. Stead that will vest in the first quarter of fiscal year 2018 based upon the achievement of FY17 EPS goals. Generally, our PSUs will have a three-year
performance period, but we determined it was in shareholders best interest to provide Mr. Stead with a one-year performance period to ensure he is highly motivated to achieve the Mergers near-term goals. The Committee chose FY17 EPS
performance as this is a key indicator of the Companys success post-Merger. If EPS is achieved at the maximum performance level, Mr. Stead will vest in 150 percent of the target PSUs granted.
Legacy Markit Equity Awards
In the first
quarter of FY16, as part of their annual performance compensation, the Markit Committee approved awards of restricted share awards to legacy Markit executives. The awards vest ratably over a three-year period. Historically, Markit established a
target compensation level comprised of salary, cash incentive and equity awards for each executive officer. In determining the value of awards to grant, the Markit Committee considered each executives performance compared to
prior years performance and his or her total direct compensation.
|
|
|
|
|
|
|
|
|
|
Markit Long-Term Incentive Program (Annual Equity Grants)
|
|
|
|
|
|
|
Name
|
|
Restricted Share Awards
Grant Date Value ($)
|
|
|
|
|
|
|
Lance Uggla
|
|
|
5,472,597
|
|
Shane Akeroyd
|
|
|
965,742
|
|
Sari
Granat
(1)
|
|
|
304,989
|
|
Adam Kansler
|
|
|
1,067,384
|
|
Jeffrey Gooch
|
|
|
1,016,548
|
|
Stephen Wolff
|
|
|
711,590
|
|
|
|
|
|
|
(1)
|
In addition to the restricted share awards listed above, prior to the Merger, the Markit Committee approved a grant of stock options with a grant date fair value of $880,000 to
Ms. Granat to recognize her promotion to general counsel of legacy Markit.
|
Benefits and Perquisites
Legacy Markit and IHS benefits remained in place during FY16. Both IHS and Markit provided executive officers with life and medical insurance, and other benefits
generally available to all
38
employees. Both IHS and Markit sponsored a qualified defined contribution plan (401(k)) that provided matches to employee contributions. IHS offered its most senior level U.S. colleagues an
opportunity to participate in a voluntary deferred compensation program through which they could defer a portion of their annual cash compensation; however, IHS did not provide any matching contributions or interest payments on amounts deferred.
This deferred compensation program has been adopted by the Company and expanded to include all eligible colleagues from both Markit and IHS. In FY17, we intend to harmonize benefits across both companies.
Generally, the Committee believes that perquisites should be kept to a minimum, and in most cases our executive officers did not receive perquisites that exceeded
the $10,000 disclosure threshold. However, under terms of his employment agreement that Mr. Uggla has had with Markit since inception of the company, he has long received from Markit a housing allowance with a tax-related payment, an automobile
allowance, and other perquisites described in his employment agreement. In FY16, Mr. Uggla voluntarily waived all perquisites other than those related to the housing and automobile allowances. In FY17, the Committee determined that limited
perquisites would be the ongoing policy of the Company, with exceptions made for relocations and international assignments. Mr. Uggla will not be eligible to receive any of these perquisites in FY17. In recognition of the significant change in
the perquisite policy for Mr. Uggla, and in light of the Companys new leadership structure, the Committee approved a FY17 salary increase for Mr. Uggla.
The Committee believes that, in the case of international assignments and relocations, additional allowances are warranted to ensure executive officers are able to maintain their standard of living and do not
experience a personal negative financial impact due to their assignment or relocation. Mr. Hyatt received relocation assistance in FY16 that is consistent with what would be received by other colleagues who are relocated for business reasons.
In connection with Mr. Hyatts expatriate assignment in the United Kingdom, he also received allowances, tax equalization, and other benefits in FY16 that were approved by the IHS Committee prior to the Merger.
FY17 Executive Compensation Philosophy and Design
FY17 Executive Compensation Philosophy
Our executive
compensation program for FY17 is governed by the following guiding principles:
|
|
|
Total rewards strategy that
supports our mission, vision and values
|
|
|
|
A philosophy designed to
attract, retain and motivate top talent
|
|
|
|
Programs that are
globally consistent and locally competitive
|
|
|
|
Short-term incentives that are
aligned to key business objectives
appropriate to colleague roles
|
|
|
|
Long-term incentives that align colleague and shareholder interests and
promote shareholder return
|
|
|
|
Supporting
a pay-for-performance
culture
|
With these guiding principles, we will operationalize as follows for FY17:
|
|
|
All incentive plans will have specific financial-based metrics that directly support our near-term and long-term business objectives.
|
|
|
|
The annual incentive performance metrics for executive officers will be corporate revenue and corporate Adjusted EBITDA with an individual modifier.
|
|
|
|
Long-term incentives will be delivered in the form of PSUs and RSUs to manage dilution.
|
39
|
|
|
PSUs may be earned based on three-year cumulative adjusted earnings per share (Adjusted EPS) growth with a TSR modifier that prevents above-target
payouts if TSR performance is below the 50
th
percentile of the S&P 500.
|
FY17 Executive Compensation Design
In FY17, our executive officers will have a compensation program that includes: (a) a competitive base salary, (b) an annual incentive tied to pre-established financial goals, and (c) long-term
incentives aimed to motivate and retain executives while driving the long-term performance of the Company.
Compensation Peer Group
With the advice of Pay Governance LLC, the independent executive compensation consultant retained by the Committee, the Committee chose a peer
group of 18 companies to be used in benchmarking executive pay. The peer group was developed with consideration given to: key competitors identified in interviews with IHS and Markit executives; the composition of legacy IHS and Markit compensation
peer groups; and industry and size (revenue, EBITDA, market cap) factors. In this peer group, IHS Markit is at the 51
st
percentile for revenue and the 59
th
percentile for market capitalization. The Committee does not rely solely on peer group compensation data in making its individual compensation determinations. Generally, the Committee aims to provide total pay opportunities to our executives based
on consideration of a number of factors, including pay levels for executives in similar positions within in our peer group, nature and scope of each executives duties, individual performance, and internal pay positioning, taking into account
each NEOs pay components and levels relative to other executives with respect to role, length of time the executive has served in the executives current position, seniority and levels of responsibility.
The companies identified as our peer group were:
|
|
|
|
|
|
IHS Markit Peer Group for Compensation Benchmarking
|
|
Computer Sciences Corporation
|
|
DST Systems, Inc.
|
|
The Dun & Bradstreet Corporation
|
Equifax Inc.
|
|
FactSet Research Systems Inc.
|
|
Fidelity National Information Services Inc.
|
Fiserv, Inc.
|
|
Gartner, Inc.
|
|
Informa plc
|
Moodys Corporation
|
|
MSCI Inc.
|
|
Nielsen Holdings plc
|
RELX PLC
|
|
S&P Global, Inc.
|
|
Thomson Reuters Corporation
|
TransUnion
|
|
Verisk Analytics, Inc.
|
|
Wolters Kluwer N.V.
|
|
40
Elements of Pay
The following table describes the components of the executive compensation program and the purpose of each component:
|
|
|
|
|
|
Component
|
|
Description
|
|
Objective
|
|
Base Salary
|
|
Fixed pay to recognize individuals role and responsibilities
|
|
Pay for expertise and experience
Attract and retain NEOs
by providing competitive level of fixed compensation
|
|
|
|
|
Short-Term
Incentive Plan
|
|
Performance-based annual compensation component linked to Company financial performance and individual
performance compared to pre-determined goals
|
|
Motivate and provide annual recognition of superior operational and financial
performance
|
|
|
|
|
|
Annual incentive target stated as percent of base salary
|
|
Align with shareholder interests by determining bonus amounts based on key financial metrics used to measure
success
|
|
|
|
|
|
Payout opportunity from 0 percent to 200 percent of target
|
|
|
|
|
|
Long-Term
Incentive Awards
|
|
Multi-year equity awards linked to share price and Company performance
|
|
Provide incentives for executives to deliver strong Company share and financial performance over the
long-term
|
|
|
|
|
|
Long-term incentive target value stated as a percentage of salary
|
|
Reinforce alignment between interests of NEOs and shareholders
|
|
|
|
|
|
Value ultimately earned by NEOs depends on share price at vesting and, for PSUs, also on Company Adjusted EPS
and relative TSR performance over 3-year performance period
|
|
Promote long-term retention by providing a meaningful and yet forfeitable ownership stake denominated in our
shares
|
|
|
|
|
|
For the CEO and the President, value delivered 100% through PSUs
|
|
|
|
|
|
|
|
For other NEOs, value delivered through 50% RSUs and 50% PSUs
|
|
|
|
|
|
|
Retirement Programs
|
|
Contribute to a competitive total rewards program
|
|
Programs are consistent with those of Company employees generally
|
|
|
|
|
Retention Programs
|
|
Retention awards to key executives in the form of equity and / or cash awards
|
|
To ensure retention and stability of leadership team through the merger integration and CEO
succession
|
|
41
Total Pay Mix
For FY17, target variable compensation will represent 87 percent of the direct compensation for each of the CEO and the President and 75 percent of the direct compensation for the other NEOs.
|
Fixed and Variable Pay Elements
|
Role of Management, Committee and Independent Consultant
Role of Management
At the Committees request, the Companys management provides the Committee with
information, analyses, and recommendations regarding the Companys executive compensation program and policies and assists the Committee in carrying out its responsibilities. The Committee also meets regularly in executive session without
management present, including regularly meeting with its independent compensation consultant. While the Committee considers the recommendations of the CEO and the President regarding NEO compensation levels (other than with respect to their own
compensation), the Committee ultimately makes all decisions relating to NEO compensation.
Role of the Committee
The Committee, which is composed of four independent directors, is responsible for the compensation of the NEOs. This means that the Committee sets base salaries
and short-term and long-term incentive targets, and approves the individual compensation elements for each executive officer. In consultation with an independent compensation consultant and Company management, the Committee actively participates in
the design process of the Companys incentive compensation programs, and provides the final approval of incentive programs and quantitative performance metrics. The Committee establishes target compensation and performance goals for the NEOs
and determines annual incentive payments for the prior year, based upon a review of the performance achieved. As the Committee makes its decisions, it considers financial results in the most recent year, along with feedback from shareholders through
the Companys engagement activities and input from the independent compensation consultant. The Committee reviews and approves compensation with a view to support the Companys long-range plans, achieve superior annual and long-term
financial results and make continued progress on the Companys long-term strategic objectives.
Role of Independent Compensation Consultant
In September 2016, the Committee engaged Pay Governance as its independent executive compensation advisor to guide it on executive compensation and
related governance matters. In choosing Pay Governance, the Committee was specifically searching for a credible leader in the executive compensation field with diversified industry experience and expertise working through mergers of equals and
harmonization of compensation plans and philosophies. In FY16, following the
42
closing of the Merger, Pay Governance has advised on the establishment of a new peer group, provided recommendations for immediate and longer-term actions to bring the executive compensation team
into alignment with the competitive market, and recommended the current design of our short-term and long-term incentive programs. While the Committee considers the recommendations of Pay Governance, the Committee ultimately makes all decisions
relating to NEO compensation.
The Committee has direct access to the Pay Governance advisors. Pay Governance had not previously provided services to
Markit or IHS. Pay Governance does not perform any other work for IHS Markit, does not trade in IHS Markit shares, and does not have any other economic interests or other relationships that would conflict with their obligation to provide impartial
advice to the Committee.
Employment Contracts, Termination of Employment Arrangements, and Change in Control Arrangements
Our CEO does not have an employment agreement. Both legacy IHS and legacy Markit have entered into employment agreements and severance agreements with certain
executive officers that are described under Executive Employment Agreements and Potential Payments upon Termination or Change in Control. In FY17, the Committee expects to harmonize the form of employment agreements for IHS
Markit executive officers.
In FY16, the Company entered into termination agreements with Mr. Gooch and Mr. Wolff that provided for severance
and accelerated vesting of equity consistent with the change in control terms of their employment agreements. They each received a termination payment in recognition of their efforts to ensure a successful closing of the Merger.
Compensation and Risk
As we designed our
compensation philosophy and strategy, the Committee has considered the balance between appropriately motivating our executives while ensuring that the Companys compensation program does not encourage excessive risk-taking. We believe that the
balance between our short- and long-term incentives, selection of performance measures, and other governance practices such as our share ownership guidelines, anti-hedging/pledging policy, incentive compensation recoupment policy, and sound internal
controls over financial reporting to ensure that performance-based compensation is earned on the basis of accurate financial data all contribute to ensure that our compensation plans and practices do not create risks that are reasonably likely to
have a material adverse effect on the Company.
Accounting and Tax Treatment
The Committee considers the anticipated accounting and tax treatment to IHS Markit and to the NEOs in its decision-making process. From an accounting perspective, the Committees preference is that there are
no significant negative accounting implications due to the design of the compensation program.
Our compensation programs are designed with Sections
409A and 457A of the Internal Revenue Code in mind, with the intent to avoid adverse tax consequences for our executive officers.
43
Definitions of Non-GAAP Financial Measures
Throughout this CD&A, we refer to Free Cash Flow, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted EPS. These are non-GAAP financial measures used to supplement our financial statements, which are based on
U.S. generally accepted accounting principles (GAAP). We also refer to Revenue and Global Revenue, which are GAAP financial measures.
We define Free
Cash Flow as net cash provided by operating activities less capital expenditures. We define EBITDA as net income plus or minus net interest, plus provision for income taxes, depreciation, and amortization. Our definition of Adjusted EBITDA further
excludes primarily non-cash items and other items that we do not consider to be useful in assessing our operating performance (e.g., stock-based compensation expense, restructuring charges, acquisition-related costs, exceptional litigation, net
other gains and losses, pension mark-to-market and settlement expense, the impact of joint ventures and noncontrolling interests, and discontinued operations). Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue. We define
Adjusted EPS as Adjusted Net Income divided by diluted weighted average shares. Adjusted Net Income is defined as net income plus primarily non-cash items and other items that management does not consider to be useful in assessing our operating
performance (e.g., stock-based compensation expense, amortization related to acquired intangible assets, restructuring charges, acquisition-related costs, acquisition financing fees, net other gains and losses, pension mark-to-market and settlement
expense, the impact of noncontrolling interests, and discontinued operations, all net of the related tax effects).
Reconciliations of comparable GAAP
measures to non-GAAP measures are provided with the schedules to each of our quarterly earnings releases. The most recent non-GAAP reconciliations for IHS and IHS Markit were furnished as an exhibit to our Form 8-K filed on January 17, 2017.
The non-IFRS reconciliations for fiscal year 2015 Markit were furnished as an exhibit to the Markit Ltd. Form 6-K furnished on February 10, 2016. They are also available on our website (http://investor.ihsmarkit.com).
Compensation Committee Interlocks and Insider Participation
None of the members of our Human Resources Committee was at any time during fiscal 2016, or at any other time, an officer or employee of IHS Markit or any of our subsidiaries or had any relationship
requiring disclosure under the SECs rules regarding related person transactions. None of our executive officers serves on the board of directors or compensation committee of a company that has an executive officer that serves on our board of
directors or our Human Resources Committee. Mr. Rosenthal was an executive officer of Morgan Stanley until December 31, 2016. Please see Item 13. Certain Relationships and Related Transactions, and Director Independence
Certain Relationships and Related Transactions Credit Agreement.
44
Executive Compensation Tables
2016 Summary Compensation Table
The following table sets forth information concerning aggregate
compensation earned by or paid to: (i) each person who served as CEO of Markit or IHS Markit during FY16; (ii) each person who served as Principal Financial Officer of Markit or IHS Markit during FY16; (iii) our three other most
highly compensated executive officers who served in such capacities as of November 30, 2016, the last day of our fiscal year, determined by calculating the total FY16 compensation for legacy Markit executive officers and the post-Merger FY16
compensation for legacy IHS executive officers; and (iv) two former officers, including a former Principal Financial Officer, who would have been in our three other most highly compensated executive officers had they been serving in that
capacity as of November 30, 2016. We refer to these individuals as our named executive officers or NEOs.
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FY16 Summary Compensation Table
(1)
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Change in
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Pension
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Value and
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Non-Equity
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Nonqualified
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Incentive
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Deferred
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All
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Name
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Stock
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Option
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Plan
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Compensation
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Other
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and Principal
|
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Year
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Salary
|
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Bonus
|
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Awards
|
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Awards
|
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Compensation
|
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Earnings
|
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Compensation
|
|
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Total
|
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Position
|
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(2)
|
|
|
($)
|
|
|
($)
(3)
|
|
|
($)
(4)
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|
$
(5)
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|
($)
(6)
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($)
(7)
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($)
(8)
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($)
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Jerre
Stead
(9)
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2016
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|
|
|
287,173
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|
|
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|
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|
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6,155,700
|
|
|
|
|
|
|
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499,279
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|
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65,006
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|
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541
|
|
|
|
7,007,699
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|
Chairman of the Board and CEO
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Lance
Uggla
(10)
|
|
|
2016
|
|
|
|
795,833
|
|
|
|
1,100,000
|
|
|
|
5,472,597
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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399,040
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|
|
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7,767,470
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|
President/Chief Integration Officer/former Markit CEO
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Todd
Hyatt
(11)
|
|
|
2016
|
|
|
|
231,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
195,616
|
|
|
|
20,061
|
|
|
|
579,112
|
|
|
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1,026,630
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|
Exec. Vice Pres., and CFO
|
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|
|
|
|
|
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Shane Akeroyd
|
|
|
2016
|
|
|
|
500,000
|
|
|
|
300,000
|
|
|
|
965,742
|
|
|
|
|
|
|
|
|
|
|
|
|
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14,043
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|
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1,779,785
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Exec. Vice Pres., Global Head of Acct Mngmt.
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|
|
|
|
|
|
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Sari Granat
|
|
|
2016
|
|
|
|
405,510
|
|
|
|
300,000
|
|
|
|
304,989
|
|
|
|
880,500
|
|
|
|
|
|
|
|
|
|
|
|
13,793
|
|
|
|
1,904,792
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|
Exec. Vice Pres., General Counsel
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|
|
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|
|
|
|
|
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Adam Kansler
|
|
|
2016
|
|
|
|
500,000
|
|
|
|
300,000
|
|
|
|
1,067,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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14,043
|
|
|
|
1,881,427
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|
Exec. Vice Pres., Financial Markets
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|
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|
|
|
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Jeffrey
Gooch
(12)
|
|
|
2016
|
|
|
|
344,471
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|
|
|
|
|
|
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1,016,548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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1,214,893
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|
|
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2,575,912
|
|
Former Markit CFO
|
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|
|
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Stephen
Wolff
(13)
|
|
|
2016
|
|
|
|
368,327
|
|
|
|
|
|
|
|
711,590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,015,643
|
|
|
|
2,095,560
|
|
Former Markit head of Corp. Strategy
|
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45
(1)
|
The Summary Compensation Table describes compensation for FY16. As an FPI, we are not required to disclose past years compensation for the NEOs who were employed by Markit
prior to the Merger: Messrs. Uggla, Akeroyd, Kansler, Gooch, and Wolff and Ms. Granat (the legacy Markit NEOs). Messrs. Stead and Hyatt (the legacy IHS NEOs) became executive officers post-Merger and we are required to report
their post-Merger compensation (between July 12, 2016 and November 30, 2016).
|
(2)
|
Per SEC disclosure requirements, the Summary Compensation Table discloses a full fiscal year of compensation for the legacy Markit NEOs and post-Merger compensation (between
July 12, 2016 and November 30, 2016) for legacy IHS NEOs. See Footnotes 9 and 11 to this table for additional information on FY16 amounts paid to Messrs. Stead and Hyatt, the legacy IHS NEOs.
|
(3)
|
Represents payments under the legacy Markit annual performance compensation program to legacy Markit NEOs. Discretionary payments were made in FY17 based on the individuals
and Markits performance in FY16.
|
(4)
|
For Mr. Stead, the value reported reflects the grant date fair value of PSUs assuming target performance level. The value of this award was calculated in accordance with
FASB ASC Topic 718. For the legacy Markit NEOs, the value reported reflects the grant date fair value of RSAs calculated in accordance with International Financial Reporting Standard 2, Share-based Payment (IFRS 2). Any estimated
forfeitures are excluded from the values reported in this table. For a discussion of the assumptions made in valuing these awards and a description of how we factor forfeitures into our overall equity compensation expense, refer to the
Stock-Based Compensation footnote to our financial statements contained in our Annual Report on Form 10-K for the 2016 fiscal year. The values exclude any additional stock based compensation recognized as a result of a re-valuation of
outstanding awards held by these legacy Markit NEOs at the time of the Merger, as required by the U.S. GAAP accounting rules governing the Merger.
|
(5)
|
Reflects the grant date fair value of stock options calculated in accordance with IFRS 2. Any estimated forfeitures are excluded from the values reported in this table. For
a discussion of the assumptions made in valuing these awards and a description of how we factor forfeitures into our overall equity compensation expense, refer to the Stock-Based Compensation footnote to our financial statements
contained in our Annual Report on Form
10-K
for the 2016 fiscal year. Excludes any amounts recognized as a result of a re-valuation of outstanding stock options held by legacy Markit NEOs at the time of the
Merger, as required by the U.S. GAAP accounting rules governing the Merger.
|
(6)
|
Represents the post-Merger pro-rata payment made under the legacy IHS Annual Incentive Plan to the legacy IHS NEOs. Payments were made in FY17 based on achievement of
pre-determined FY16 goals. The full fiscal year portion of this incentive payment tied to Customer Delight ($345,600 for Mr. Stead and $135,405 for Mr. Hyatt) was paid in shares of IHS Markit stock.
|
(7)
|
Amounts represent the aggregate increase in actuarial value, pro-rated for the post-Merger period of July 12, 2016 to November 30, 2016, to the NEO of legacy IHS
pension benefits accrued during the fiscal year. The amounts are based on the November 30th measurement date used for financial statement reporting purposes. Assumptions used to calculate the change in pension value are discussed in the note
Pensions and Postretirement Benefits to our financial statements contained in our Annual Report on Form 10-K for the 2016 fiscal year.
|
(8)
|
The table below provides a breakdown of Other Annual Compensation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Compensation
|
|
|
|
Description
|
|
Stead
|
|
|
Uggla
|
|
|
Hyatt
|
|
|
Akeroyd
|
|
|
Granat
|
|
|
Kansler
|
|
|
Gooch
|
|
|
Wolff
|
|
|
|
Retirement Plan Contributions
|
|
|
|
|
|
|
12,211
|
|
|
|
15,900
|
|
|
|
13,250
|
|
|
|
13,000
|
|
|
|
13,250
|
|
|
|
12,211
|
|
|
|
12,211
|
|
Life Insurance Premiums
|
|
|
541
|
|
|
|
1,458
|
|
|
|
675
|
|
|
|
793
|
|
|
|
793
|
|
|
|
793
|
|
|
|
885
|
|
|
|
885
|
|
End-of-Service Payments
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,201,797
|
|
|
|
1,002,547
|
|
Perquisites Benefits
(b)
|
|
|
|
|
|
|
211,044
|
|
|
|
123,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional Tax Payments
(c)
|
|
|
|
|
|
|
174,327
|
|
|
|
439,235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
541
|
|
|
|
399,040
|
|
|
|
579,112
|
|
|
|
14,043
|
|
|
|
13,793
|
|
|
|
14,043
|
|
|
|
1,214,893
|
|
|
|
1,015,643
|
|
|
|
|
(a)
|
Mr. Goochs and Mr. Wolffs end-of-service payments were converted from GBP to USD using an annual average exchange rate of 1.355 USD for 1 GBP. The severance
payments for Mr. Gooch and Mr. Wolff are paid monthly over a 12-month period from termination, and are contingent upon their remaining in compliance with non-compete and non-solicitation terms. Only the severance amounts actually paid in
FY16 are included in this table. For a full description of their termination payments, see Potential Payments Upon Termination or Change in Control.
|
|
(b)
|
Mr. Ugglas perquisites include a housing allowance of $196,583. Mr. Ugglas perquisites were converted from GBP to USD using an annual average exchange rate
of 1.355 USD for 1 GBP. Mr. Uggla will not receive these perquisites in fiscal year 2017. Mr. Hyatts perquisites represent payments related to his expatriate assignment to the United Kingdom and include $28,402 for housing, $36,208
for the household move, and $40,758 in professional tax services.
|
|
(c)
|
For Mr. Uggla, Additional Tax Payments are for taxes paid on his housing allowance. For Mr. Hyatt, Additional Tax Payments are for the accrual made in FY16 for
Mr. Hyatts tax equalization related to his expatriate assignment.
|
(9)
|
Mr. Steads compensation reported in the Summary Compensation Table represents amounts received or allocated to the post-Merger period of FY16, as explained in Footnote
1. Mr. Steads total direct compensation for the full fiscal year is $12,820,328, and is comprised of (a) an annual salary of $745,428; (b) an AIP payout of $1,296,000; and (c) grant date value of equity of $10,778,900, at
the target performance level. The $10,778,900 in equity is comprised of two PSU grants. The first PSU grant with a grant date value of $4,623,300 at target, was approved prior to the Merger and converted to RSUs in the Merger. The second PSU grant,
approved post-Merger, is shown in the Stock Awards column in the table above, and is based on the shares that would be received should the target performance be met. In addition, the PSUs granted post-Merger have a threshold value of 75
percent of target ($4,616,775) and a maximum payout of 150 percent of target ($9,233,550), provided a stretch performance goal is met.
|
(10)
|
Mr. Ugglas salary was set in USD, and his salary was then converted to GBP. For purposes of this table, Mr. Ugglas GBP salary was converted to USD using an
average annual exchange rate of 1.355 USD for 1 GPB. Mr. Uggla also received a cash adjustment, included in the Salary column, to ensure that the total amount he received in GBP was equivalent to his salary as stated in USD. Going
forward, Mr. Uggla will be paid in USD, and therefore, there will be no future exchange rate adjustments.
|
46
(11)
|
Mr. Hyatts compensation reported in the Summary Compensation Table represents amounts received or allocated to the post-Merger period of FY16, as explained in Footnote
1. Mr. Hyatts total direct compensation for the full fiscal year is $5,498,029, and is comprised of (a) an annual salary of $601,800; an AIP payout of $507,769; and (c) grant date value of equity of $4,388,460, with PSUs
reported at target performance. Mr. Hyatts PSUs were converted to RSUs in the Merger.
|
(12)
|
Mr. Gooch served as CFO of Markit from the beginning of FY16 through the close of the Merger on July 12, 2016. He was not an executive officer of IHS Markit and he
ceased being employed by IHS Markit on September 16, 2016. Mr. Goochs GBP salary was converted to U.S. dollars using an average annual exchange rate of 1.355 USD for 1 GPB.
|
(13)
|
Mr. Wolff served as an executive officer of Markit from the beginning of FY16 through the close of the Merger on July 12, 2016. He was not an executive officer of IHS
Markit and he ceased being employed by IHS Markit on October 16, 2016. Mr. Wolffs GBP salary was converted to U.S. dollars using an average annual exchange rate of 1.355 USD for 1 GPB.
|
47
2016 Grants of Plan-Based Awards During Fiscal Year
The following table provides information regarding grants of plan-based awards. Per SEC disclosure requirements, the Grants of Plan-Based Awards Table discloses a
full fiscal year of grants for legacy Markit NEOs and the post-Merger grants for legacy IHS NEOs.
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY16 GRANTS OF PLAN-BASED AWARDS
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards
|
|
|
Awards:
|
|
|
Exercise
|
|
|
Date Fair
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
or Base
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
Under Equity
|
|
|
|
|
|
|
|
|
Shares of
|
|
|
Securities
|
|
|
Price of
|
|
|
Stock and
|
|
|
|
|
|
|
Date
|
|
|
Incentive Plan Awards
|
|
|
|
|
|
|
|
|
Stock or
|
|
|
Underlying
|
|
|
Option
|
|
|
Option
|
|
|
|
Grant
|
|
|
Award
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Units
|
|
|
Options
|
|
|
Awards
|
|
|
Awards
(2)
|
|
Name
|
|
Date
|
|
|
Approved
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
($/Sh)
|
|
|
($)
|
|
|
|
Jerre Stead
|
|
|
8/22/2016
|
|
|
|
8/22/2016
|
|
|
|
127,500
|
|
|
|
170,000
|
(3)
|
|
|
255,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,155,700
|
(4)
|
|
|
Lance Uggla
|
|
|
1/1/2016
|
|
|
|
12/2/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
181,392
|
(5)
|
|
|
|
|
|
|
|
|
|
|
5,472,597
|
|
|
|
Todd Hyatt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shane Akeroyd
|
|
|
1/1/2016
|
|
|
|
12/2/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,010
|
(6)
|
|
|
|
|
|
|
|
|
|
|
965,742
|
|
|
|
Sari Granat
|
|
|
1/1/2016
|
|
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,109
|
(8)
|
|
|
|
|
|
|
|
|
|
|
304,989
|
|
|
|
|
|
|
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000
|
(9)
|
|
|
27.61
|
|
|
|
880,500
|
|
|
|
Adam Kansler
|
|
|
1/1/2016
|
|
|
|
12/2/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,379
|
(10)
|
|
|
|
|
|
|
|
|
|
|
1,067,384
|
|
|
|
Jeffrey Gooch
|
|
|
1/1/2016
|
|
|
|
12/2/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,694
|
(11)
|
|
|
|
|
|
|
|
|
|
|
1,016,548
|
|
|
|
Stephen Wolff
|
|
|
1/1/2016
|
|
|
|
12/2/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,586
|
(12)
|
|
|
|
|
|
|
|
|
|
|
711,590
|
|
|
|
(1)
|
This table excludes stock awards that were granted to Messrs. Stead and Hyatt for the portion of their Annual Incentive Plan payment that was tied to FY16 Customer Delight
metrics and described in footnote 6 to the FY16 Summary Compensation Table. This table also excludes stock awards that were granted prior to the Merger to Messrs. Stead and Hyatt, as noted in Footnote 2 to the FY16 Summary Compensation Table.
|
(2)
|
For legacy Markit NEOs, grant date fair value is calculated in accordance with IFRS2. For legacy IHS NEOs, grant date fair value is calculated in accordance with FASB ASC Topic
718. Any estimated forfeitures are excluded from the values reported in this table. The values reported in this table exclude the re-valuation of the legacy Markit options and awards as required by the U.S. GAAP accounting rules governing the
Merger.
|
(3)
|
On August 22, 2016, Mr. Stead was granted 170,000 PSUs that will be earned after the end of fiscal year 2017 based upon achievement of FY17 adjusted EPS goals.
|
(4)
|
The grant date fair value reported is at a target performance level. The grant date fair value at threshold performance level is $4,616,775 and the grant date fair value at
maximum performance level is $9,233,550.
|
(5)
|
On January 1, 2016, Mr. Uggla was granted 181,392 RSAs, of which one-third vested January 1, 2017 and one-third will vest on each of January 1, 2018 and 2019,
respectively.
|
(6)
|
On January 1, 2016, Mr. Akeroyd was granted 32,010 RSAs, of which one-third vested January 1, 2017 and one-third will vest on each of January 1, 2018 and
2019, respectively.
|
(7)
|
This grant was awarded prior to Ms. Granats appointment as executive officer, and was approved by delegation of authority by the Committee to certain executive
officers of the Company.
|
(8)
|
On January 1, 2016, Ms. Granat was granted 10,109 RSAs, of which one-third vested January 1, 2017 and one-third will vest on each of January 1, 2018 and 2019,
respectively.
|
(9)
|
On February 24, 2016, Ms. Granat was granted 150,000 non-qualified stock options, of which one-fifth will vest on each of February 24, 2017, 2018, 2019, 2020 and
2021, respectively. The options expire on February 24, 2023.
|
(10)
|
On January 1, 2016, Mr. Kansler was granted 35,379 RSAs, of which one-third vested January 1, 2017 and one-third will vest on each of January 1, 2018 and
2019, respectively.
|
(11)
|
On January 1, 2016, Mr. Gooch was granted 33,694 RSAs, which vested upon Mr. Goochs termination on September 13, 2016.
|
(12)
|
On January 1, 2016, Mr. Wolff was granted 23,586 RSAs, which vested upon Mr. Wolffs termination on October 5, 2016.
|
48
Outstanding Equity Awards at 2016 Fiscal Year-End
The following table sets forth information concerning outstanding equity awards held by our NEOs as of November 30, 2016. The market value of the shares set
forth under the Stock Awards column was determined by multiplying the number of unvested or unearned shares by $35.94, the closing price of our common stock on November 30, 2016, the last day of our fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OUTSTANDING EQUITY AWARDS AT 2016 FISCAL YEAR-END
|
|
|
|
OPTION AWARDS
|
|
|
STOCK AWARDS
|
|
|
|
Number
of Securities
Underlying
Unexercised
Options
Exercisable
|
|
|
Number
of Securities
Underlying
Unexercised
Options
Unexercisable
|
|
|
Option
Exercise
Price
|
|
|
Option
Expiration
Date
|
|
|
Number
of Shares
or Units
of Stock
That Have
Not Vested
|
|
|
Market
Value
of Shares
or Units
of Stock
That Have
Not Vested
|
|
|
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other Rights
That Have
Not
Vested
|
|
|
Equity
Incentive
Plan Awards:
Markit or
Payout Value
of Unearned
Shares, Units
or Other Rights
That
Have
Not Vested
|
|
Name
|
|
(#)
|
|
|
(#)
|
|
|
($)
|
|
|
|
|
|
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
Jerre Stead
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
450,978
|
(6)
|
|
|
16,208,149
|
|
|
|
170,000
|
(12)
|
|
|
6,109,800
|
|
Lance Uggla
|
|
|
716,560
|
|
|
|
|
|
|
|
12.84
|
|
|
|
12/31/2017
|
|
|
|
402,944
|
(7)
|
|
|
14,481,807
|
|
|
|
|
|
|
|
|
|
|
|
|
575,260
|
|
|
|
|
|
|
|
20.31
|
|
|
|
12/31/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,800,000
|
(1)
|
|
|
26.70
|
|
|
|
7/31/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Todd Hyatt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
322,942
|
(8)
|
|
|
11,606,535
|
|
|
|
|
|
|
|
|
|
Shane Akeroyd
|
|
|
588,960
|
|
|
|
|
|
|
|
12.84
|
|
|
|
6/29/2018
|
|
|
|
65,706
|
(9)
|
|
|
2,361,474
|
|
|
|
|
|
|
|
|
|
|
|
|
235,160
|
|
|
|
|
|
|
|
20.31
|
|
|
|
12/31/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
|
|
|
20.31
|
|
|
|
6/29/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,260
|
|
|
|
|
|
|
|
22.57
|
|
|
|
12/31/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
118,870
|
|
|
|
|
|
|
|
24.46
|
|
|
|
12/31/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000
|
(2)
|
|
|
26.70
|
|
|
|
7/31/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sari Granat
|
|
|
50,000
|
|
|
|
|
|
|
|
22.57
|
|
|
|
4/15/2019
|
|
|
|
14,639
|
(10)
|
|
|
526,126
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
24.46
|
|
|
|
12/31/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000
|
(3)
|
|
|
26.70
|
|
|
|
7/31/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000
|
(4)
|
|
|
27.61
|
|
|
|
2/24/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adam Kansler
|
|
|
98,270
|
|
|
|
|
|
|
|
20.31
|
|
|
|
12/31/2017
|
|
|
|
74,195
|
(11)
|
|
|
2,666,568
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
|
|
|
20.31
|
|
|
|
6/29/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,910
|
|
|
|
|
|
|
|
22.57
|
|
|
|
12/31/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
63,400
|
|
|
|
|
|
|
|
24.46
|
|
|
|
12/31/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000
|
(5)
|
|
|
26.70
|
|
|
|
7/31/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey Gooch
|
|
|
324,750
|
|
|
|
|
|
|
|
26.70
|
|
|
|
9/13/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen Wolff
|
|
|
451,200
|
|
|
|
|
|
|
|
26.70
|
|
|
|
10/5/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
49
(1)
|
Consists of 1,266,660 options that will vest on June 19, 2017; 1,266,660 options that will vest on June 19, 2018; and 1,266,680 options that will vest on June 19,
2019.
|
(2)
|
Consists of 333,330 options that will vest on June 19, 2017; 333,330 options that will vest June 19, 2018; and 333,340 options that will vest June 19, 2019.
|
(3)
|
Consists of 50,000 options that will vest on June 19, 2017, 2018 and 2019.
|
(4)
|
Consists of 30,000 options that will vest on February 24, 2017, 2018, 2019, 2020 and 2021.
|
(5)
|
Consists of 333,330 options that will vest on June 19, 2017; 333,330 options that will vest June 19, 2018; and 333,340 options that will vest June 19, 2019.
|
(6)
|
Consists of 202,016 RSUs that vested on February 1, 2017; and 248,962 RSUs that will vest on February 1, 2018.
|
(7)
|
Consists of 211,630 RSUs that vested on January 1, 2017; 130,850 RSUs that will vest on January 1, 2018; and 60,464 RSUs that will vest on January 1, 2019.
|
(8)
|
Consists of 75,756 RSUs that vested on February 1, 2017; 93,361 RSUs that will vest on February 1, 2018; 53,349 RSUs that will vest on July 1, 2018; and 100,476
RSUs that will vest on February 1, 2019.
|
(9)
|
Consists of 34,128 RSUs that vested on February 1, 2017; 20,908 RSUs that will vest on February 1, 2018; and 10,670 RSUs that will vest on February 1, 2019.
|
(10)
|
Consists of 6,299 RSUs that vested on February 1, 2017; 4,970 RSUs that will vest on February 1, 2018; and 3,370 RSUs that will vest on February 1, 2019.
|
(11)
|
Consists of 37,811 RSUs that vested on January 1, 2017; 24,591 RSUs that will vest on January 1, 2018; and 11,793 RSUs that will vest on January 1, 2019.
|
(12)
|
These awards consist of PSUs that may vest in the first quarter of fiscal year 2018, based upon achievement of FY17 Company goals. The PSUs have three primary vesting levels:
threshold, target and maximum. If threshold performance is not met, the award will be forfeited. The column titled Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested reports the number of
PSUs that would vest if target performance is met. At threshold performance, 75 percent of the PSUs would vest and at maximum performance, 150 percent of the PSUs would vest.
|
Options Exercises and Stock Vested During Fiscal Year 2016
The following table provides information
regarding options exercised and stock vested by our NEOs. Per SEC disclosure requirements, the Option Exercises and Stock Vested Table discloses a full fiscal year of activity for NEOs who were employed by Markit prior to the Merger (Mr. Uggla,
Mr. Akeroyd, Ms. Granat, Mr. Kansler, Mr. Gooch, and Mr. Wolff) and the post-Merger activity for NEOs who were employed by IHS prior to the Merger (Mr. Stead and Mr. Hyatt).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPTION EXERCISES AND STOCK VESTED DURING FISCAL YEAR 2016
|
|
|
|
Option Awards
(1)
|
|
|
Stock Awards
(1)
|
|
|
|
Number of
Shares
Acquired on
Exercise
|
|
|
Value
Realized
on Exercise
|
|
|
Number of
Shares
Acquired on
Vesting
|
|
|
Value
Realized on
Vesting
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
Jerre Stead
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lance Uggla
|
|
|
150,030
|
|
|
|
2,048,916
|
|
|
|
151,165
|
|
|
|
4,465,414
|
|
Todd Hyatt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shane Akeroyd
|
|
|
231,040
|
|
|
|
4,482,894
|
|
|
|
23,458
|
|
|
|
692,949
|
|
Sari Granat
|
|
|
|
|
|
|
|
|
|
|
2,920
|
|
|
|
86,257
|
|
Adam Kansler
|
|
|
750,000
|
|
|
|
12,910,254
|
|
|
|
26,017
|
|
|
|
768,542
|
|
Jeffrey Gooch
|
|
|
1,911,070
|
|
|
|
28,524,244
|
|
|
|
103,726
|
|
|
|
3,625,386
|
|
Stephen Wolff
|
|
|
548,800
|
|
|
|
5,236,232
|
|
|
|
48,465
|
|
|
|
1,721,296
|
|
(1)
|
No amounts were deferred upon the exercise of options or the vesting of stock awards.
|
Pension Benefits
Prior to July 2014, legacy IHS sponsored a tax-qualified defined benefit pension plan
(U.S. RIP) for all U.S. employees employed prior to January 1, 2012. The U.S. RIP was frozen in July 2014 and all future benefit accruals have ceased. Legacy IHS also sponsored a nonqualified supplemental
50
retirement plan (SIP) to provide benefits to participants that are limited by Internal Revenue Code limits that apply to tax-qualified defined benefit plans. The SIP was also frozen in July 2014
as it was directly linked to the U.S. RIP. Under the Internal Revenue Code, the maximum permissible benefit from the qualified plan for retirements in 2016 is $215,000 and annual compensation exceeding $270,000 in 2016 cannot be considered in
computing the maximum permissible benefit under the plan. Benefits under the SIP replace the benefits that would have been provided if the Internal Revenue Code limits were not in place.
The table below sets forth the present value of accumulated benefits payable at age 65 (or later date if applicable) as of November 30, 2016 for the two legacy IHS NEOs who participated in these plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 Pension Benefits
|
Name
|
|
Plan Name
|
|
Number of
Years of Credited
Service
|
|
|
Present Value of
Accumulated
Benefit ($)
|
|
|
Payments
During Last
Fiscal Year
|
Jerre Stead
|
|
U.S. RIP (Qualified)
|
|
|
13.5
|
|
|
|
936,496
|
|
|
|
|
|
SIP (Supplemental)
|
|
|
35.0
|
|
|
|
2,830,489
|
|
|
89,405
(1)
|
Todd Hyatt
|
|
U.S. RIP (Qualified)
|
|
|
10.2
|
|
|
|
209,453
|
|
|
|
|
|
SIP (Supplemental)
|
|
|
10.2
|
|
|
|
22,268
|
|
|
|
(1)
|
Represents payments Mr. Stead received after the Merger. He received a total of $214,572 in Qualified Payments from IHS and IHS Markit between December 1, 2015 and
November 30, 2016. In 2003, Mr. Stead was granted an additional 25 years of benefit service under the Supplemental Retirement Income Plan, which is $2,461,136 of the present value listed above.
|
Accrued Benefits
The accrued benefits are calculated
according to the formulas outlined below.
Formula A: Benefits accrued as of April 30, 2006 equals (i)+(ii)+(iii) (expressed in the form of a single
life annuity):
i. 1.25 percent of highest five years average compensation in last 10 years as of April 30, 2006 up to covered
compensation times years of benefit service (maximum 30 years), plus
ii. 1.70 percent of highest five years average compensation
in last 10 years as of April 30, 2006 in excess of covered compensation times years of benefit service (maximum 30 years), plus
iii. 0.5 percent of highest five years average compensation in last 10 years as of April 30, 2006 times years of benefit service in
excess of 30 years.
Plus
Formula B: From
May 1, 2006 to February 28, 2011, 15 percent of pensionable earnings, payable at age 65 as a lump sum pension.
Plus
Formula C: From March 1, 2011 to July 11, 2014, 10 percent of pensionable earnings, payable at age 65 as a lump sum pension.
The accumulated benefits were calculated in accordance with GAAP, using a discount rate of 4.2 percent. For purposes of determining the accrued benefit,
compensation means regular salary, bonuses, commissions and overtime prior to January 1, 1987, and regular salary, commissions and overtime for January 1, 1987 and later. Compensation after January 1, 2009 excludes commissions for the
SIP.
51
For grandfathered participants, service through March 31, 2011 is covered under Formula A. Mr. Stead is the
only NEO who is a grandfathered participant.
Vesting
Participants are 100 percent vested in their benefit at the earlier of the time they are credited with three years of vesting service or the date they reach age 65. Mr. Stead and Mr. Hyatt are 100 percent
vested.
Retirement Eligibility
Normal
retirement age under the plan is 65, but a participant who terminates employment with at least ten years of vesting service may retire as early as age 55. Under Formula A above, participants who terminate employment after age 55 with ten years of
vesting service will receive a benefit reduction equal to 0.5 percent for each month that benefit commencement precedes age 62. Participants who terminate employment before age 55 with ten years of vesting service will receive a benefit reduction
equal to 0.5 percent for each month that benefit commencement precedes age 65. Formula A will be actuarially reduced for benefit commencements prior to age 55.
Under Formulas B and C, participants who terminate prior to age 65 will receive a benefit reduction equal to 4.5 percent compounded annually for each year commencement precedes age 65.
Participants who continue employment after attaining age 70 1/2 will have actuarial adjustments applied to the benefit amount to reflect the delay of commencement
beyond age 70 1/2.
Nonqualified Deferred Compensation
Legacy IHS established a Deferred Compensation Plan for employees who are at or above a vice president level in 2015. Under the Deferred Compensation Plan, eligible employees may defer between 10 percent and 50
percent of their salary, wages, commissions, and bonuses, including payment under the AIP. Amounts paid under the RIP or SIP are not eligible for deferral. The deferred amounts may be invested in the same funds available under the Companys
401(k) plan. Compensation may be deferred to a time one to 10 years from a specified date or after separation from service. The Company does not make any matching contributions under the Deferred Compensation Plan.
Under the terms of the legacy IHS Directors Stock Plan, legacy IHS directors were able to convert all or a portion of their annual cash retainers to deferred stock
units that will be distributed in shares of Company stock after the directors service terminated. For fiscal year 2015 (FY15), Mr. Stead elected to defer to deferred stock units his director fee for service as Chairman. Mr. Stead did
not make any compensation deferrals in FY16.
The following table shows amounts that were deferred by our NEOs and the fiscal year-end balance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONQUALIFIED DEFERRED COMPENSATION
|
|
Name
|
|
Executive
Contributions
in Last Fiscal
Year ($)
|
|
|
Registrant
Contributions
in Last Fiscal
Year ($)
|
|
|
Aggregate
Earnings
in Last
Fiscal
Year
($)
|
|
|
Aggregate
Withdrawals/
Distributions
($)
|
|
|
Aggregate
Balance
at Last
FYE
($)
|
|
Jerre Stead
|
|
|
|
|
|
|
|
|
|
|
7,335
|
|
|
|
|
|
|
|
206,727
|
|
Todd Hyatt
|
|
|
300,900
|
(1)
|
|
|
|
|
|
|
35,179
|
|
|
|
|
|
|
|
613,036
|
|
(1)
|
This amount is also included in the amount reported under the column heading Salary in the Summary Compensation Table.
|
52
Executive Employment Agreements
The Company has entered into an employment agreement with each of the Companys NEOs, except for Mr. Stead, which sets forth the terms of employment and details the compensation elements and benefits, if
any, due to NEOs upon termination of employment.
Below are descriptions of those employment agreements with the Companys NEOs. These descriptions
summarize the agreements material terms and do not describe all of their provisions. The NEO employment agreements are filed as exhibits to the Companys public filings with the SEC.
Each of the employment agreements described below provides for certain benefits upon termination of employment (for a summary of these benefits, see
Potential Payments upon Termination or Change in Control below).
Lance Uggla
.
Effective as of
July 1, 2014, legacy Markit entered into an employment agreement with Mr. Uggla, which was further amended on March 20, 2016 and on December 1, 2016, and that included the following provisions:
Term.
Mr. Ugglas agreement does not entitle Mr. Uggla to employment for any specified period of time and his employment will continue to be
considered employment-at-will. The Company may terminate Mr. Ugglas employment by giving four weeks notice and an additional week of notice for each additional year of service up to 12 weeks notice or may provide payment in
lieu of notice.
Base salary, bonus and benefits.
The agreement provides for an initial base salary of £450,000 to be reviewed
annually. Mr. Ugglas salary is currently set in USD, as described in the Compensation Discussion and Analysis above. Mr. Ugglas salary may not be reduced, unless there is a salary reduction for similarly situated
members of management. Mr. Uggla will be eligible to participate in the AIP and may receive an incentive payment if he remains employed on the date the incentive is paid. The Company in its sole discretion determines the amount of the incentive
awards. Mr. Uggla is also entitled to participate in the employee benefits plans, programs and arrangements as are customarily accorded to our executives as well as the Pensions Salary Sacrifice option, which allows Mr. Uggla to authorize
the Company to pay a portion of his salary as an additional employer contribution to the Markit Group Personal Pension Plan. The agreement also provides for certain perquisites described in the Compensation Discussion and Analysis
above.
Covenants.
Under Mr. Ugglas agreement, he has agreed not to disparage the Company or any of our subsidiaries and
to maintain the confidentiality of our proprietary or confidential information at all times during his employment and thereafter, and he has assigned to us all of the intellectual property rights in any work product created or developed by him
during the term of his employment. He has also agreed not to compete with us during the term of his employment and the 12-month period following termination of his employment, subject to specific exclusions and definitions of permissible advisory
and academic activities. He has also agreed not to solicit any of our customers, employees, or prospective customers of any of our subsidiaries during that restricted period.
Amendment
. In the terms of the Merger agreement, Mr. Uggla is to assume the CEO role in FY18. In connection with the pending Merger and Mr. Ugglas appointment as the President of the combined
Company, Mr. Ugglas employment agreement was amended on March 20, 2016 to provide that, if he is not serving as the CEO and Chairman of IHS Markit by January 1, 2018 (the Succession Trigger, as defined in the amended
agreement) as designated in the Merger terms, he may resign. In such case, he would be entitled to receive the same change in control severance and equity award vesting he would have received if he was terminated without cause or resigned for good
reason within 12 months of the closing. The Succession Trigger is intended to provide Mr. Uggla with the assurance that he would be protected if he were not to receive the CEO position at the designated time, as previously agreed.
53
Mr. Ugglas employment agreement was amended effective as of December 1, 2016 to remove any entitlement
to perquisites.
Todd Hyatt
. Effective as of November 1, 2013, legacy IHS entered into an employment agreement with Mr. Hyatt,
which included the following provisions:
Term.
Mr. Hyatts agreement does not entitle Mr. Hyatt to employment for any specified
period of time and his employment will continue to be considered employment-at-will.
Base salary, bonus and benefits
. The agreement
provides for a base salary to be reviewed and increased at the discretion of our management. Mr. Hyatt will be eligible to participate in the AIP with a target bonus of 75 percent of his base salary, which bonus payout will be based on actual
business results. Mr. Hyatt is also entitled to participate in the employee benefits plans, programs, and arrangements as are customarily accorded to our executives.
Equity Incentives
. In accordance with his agreement, Mr. Hyatt is eligible to participate in the IHS Long-Term Incentive Program (following the Merger, Mr. Hyatt is eligible to participate in
the IHS Markit 2014 Equity Incentive Award Plan).
Covenants
. Under Mr. Hyatts agreement, he has agreed to maintain the
confidentiality of our proprietary or confidential information at all times during his employment and thereafter, unless first obtaining our prior written consent. He also has assigned to us all of the intellectual property rights in any work
product created or developed by him during the term of his employment.
New Letter Agreement
. On July 8, 2016, legacy IHS entered into an
expatriate agreement with Mr. Hyatt. The expatriate agreement is not a contract of employment but rather a summary of the terms of his assignment, which is anticipated to be two years effective as of September 1, 2016. The agreement
provides for various benefits provided to certain executive officers serving on an international assignment.
Amendment.
On July 8, 2016,
legacy IHS entered into a letter agreement with Mr. Hyatt in connection with the Merger to extend severance payable on certain terminations until January 31, 2019. This agreement was amended on February 2, 2017. Under the terms of the
original letter agreement, upon an involuntary termination without cause, Mr. Hyatt would be entitled to acceleration of equity awards outstanding at the time of the Merger and enhanced severance equal to two times salary and target bonus plus
a pro rata bonus payment at target. The agreement also includes benefits if Mr. Hyatt terminates his employment for Good Reason. Good Reason, as of November 30, 2016, would include, from the Merger through January 31, 2019, a material
reduction in his role, or an office move more than 50 miles from the current location. These benefits are enumerated in Potential Payments upon Termination or Change in Control below.
Pursuant to the February 2017 amendment, Mr. Hyatt is no longer eligible to receive any severance payments or benefits to which he had been entitled under the
July 2016 amendment or the October 2013 agreement under the circumstances specified in those agreements.
In addition, pursuant to the February 2017
amendment, in the event Mr. Hyatt retires from IHS Markit after he reaches the age of 60 in 2020, he will be eligible to receive (i) continuation of health and welfare benefits for 24 months following termination of employment and
(ii) continued post-termination vesting of all unvested restricted share units and other equity awards granted to him in accordance with their terms, provided that Mr. Hyatt was an employee of IHS Markit for six months following the grant
of such awards, does not engage in any activity in competition with IHS Markit at any time following his termination of employment during the full vesting period of such awards, and executes a release in favor of IHS Markit. Upon a termination
without cause or resignation for Good Reason at any
54
time after February 1, 2017, any unvested portion of the 126,746 restricted share units granted to Mr. Hyatt on February 1, 2017 will vest in full on the date of such termination,
provided that, upon the request of IHS Markit, Mr. Hyatt executes a release in favor of IHS Markit. For purposes of the February 2017 amendment, Good Reason includes a reduction in cash compensation, an assignment to a position that represents
a materially diminished level of authority, or an office move more than 50 miles from the current location without Mr. Hyatts consent.
New Expatriate Agreement
. On July 8, 2016, legacy IHS entered into an expatriate agreement for Mr. Hyatt in anticipation of his assignment from
the United States to the United Kingdom to serve as the CFO of the Company. The two-year expatriate agreement provides Mr. Hyatt with benefits that are often provided to executive officers who are serving on an international assignment,
including allowances for housing, cost of living and transportation; home leave; international health care coverage; relocation, shipment and storage services; and tax equalization and tax preparation.
Shane Akeroyd
.
Effective as of July 1, 2014, legacy
Markit entered into an employment agreement with Mr. Akeroyd, which included the following provisions:
Term.
Mr.
Akeroyds agreement does not entitle Mr. Akeroyd to employment for any specified period of time and his employment will continue to be considered employment-at-will.
Base salary, bonus and benefits.
The agreement provides for an initial base salary of $400,000 to be reviewed annually. Mr. Akeroyds salary may not be reduced, unless there is a salary
reduction for similarly situated members of management. Mr. Akeroyd will be eligible to participate in the AIP and may receive a bonus payment if he remains employed on the date the bonus is paid. The Company in its sole discretion determines
the amount of the bonus payment. Mr. Akeroyd is also entitled to participate in the employee benefits plans, programs, and arrangements as are customarily accorded to our executives.
Mr. Akeroyds agreement entitles him to benefits in the event of an involuntary termination without Cause or termination for Good Reason, which are enumerated in Potential Payments upon Termination
or Change in Control below. For Mr. Akeroyd, Good Reason may be triggered in the event of: (1) a material diminution of compensation; (2) a material diminution of authority, duties, responsibilities, or title; or (3) a
material breach by the Company of the employment agreement that is not remedied by the Company upon notice of such condition.
Modified cutback in
connection with a change in control
. Under Mr. Akeroyds agreement, if any amounts received in connection with a change in control are subject to the excise tax imposed under Section 4999 of the Internal Revenue Code, he will be
entitled to receive the greater of, on an after-tax basis, the full amount of payments subject to any excise tax or a reduced amount that does not give rise to the excise tax.
Covenants.
Under Mr. Akeroyds agreement, he has agreed to not make disparaging remarks about the Company or its subsidiaries and to maintain the confidentiality of our proprietary or
confidential information at all times during his employment and thereafter. The Company also has agreed to instruct our executive officers not to disparage Mr. Akeroyd. He has assigned to us all of the intellectual property rights in any work
product created or developed by him during the term of his employment. He has also agreed not to compete with us during the term of his employment and for the 12-month period following termination of his employment, subject to specific exclusions
and definitions of permissible advisory and academic activities. Furthermore, he has agreed not to solicit any of our customers, employees, or prospective customers of any of our subsidiaries during that restricted period.
55
New Relocation Agreement
. On September 29, 2016, IHS Markit entered into a relocation agreement with
Mr. Akeroyd in anticipation of his move from the United States to Hong Kong. The relocation agreement provides Mr. Akeroyd with benefits often provided to executive officers who are relocating, such as shipment of household goods and a
housing allowance beginning in FY17.
Amendment.
As of July 11, 2016, we amended Mr. Akeroyds employment agreement in connection
with the Merger to provide for additional severance and benefit protection in connection with a termination of employment, the terms of which are described in further detail in Potential Payments upon Termination or Change in Control
below.
Sari Granat
.
Effective as of September 1, 2015, legacy Markit entered into
an employment agreement with Ms. Granat, which included the following provisions:
Term. Ms. Granats agreement does not entitle her to
employment for any specified period of time and her employment will continue to be considered employment-at-will.
Base salary, bonus
and benefits.
The agreement provides for an initial base salary of $400,000 to be reviewed annually. Ms. Granats salary may not be reduced, unless there is a salary reduction for similarly situated members of
management. Ms. Granat will be eligible to participate in the AIP and may receive a bonus payment if she remains employed on the date the bonus is paid. The Company in its sole discretion determines the amount of the bonus payment.
Ms. Granat is also entitled to participate in the employee benefits plans, programs, and arrangements as are customarily accorded to our executives.
Ms. Granats agreement entitles her to benefits in the event of an involuntary termination without Cause or termination for Good Reason which are
enumerated in Potential Payments upon Termination or Change in Control and are the same as those provided to Mr. Akeroyd and Mr. Kansler.
Modified cutback in connection with a change in control
.
Ms. Granats agreement has the same cutback provision as that of Mr. Akeroyd if any amounts received in connection with a change
in control are subject to the excise tax imposed under Section 4999 of the Internal Revenue Code.
Covenants.
Ms. Granat is subject to
the same covenants as Mr. Akeroyd and Mr. Kansler.
Amendment
. As of July 11, 2016, we amended Ms. Granats employment agreement in
connection with the Merger to provide for additional severance and benefit protection in connection with a termination of employment, the terms of which are described in further detail in Potential Payments upon Termination or Change in
Control below.
Adam Kansler
.
Effective as of July 1, 2014, legacy Markit entered into an employment agreement with
Mr. Kansler, which included the following provisions:
Term.
Mr. Kanslers agreement does not entitle Mr. Kansler to
employment for any specified period of time and his employment will continue to be considered employment-at-will.
Base salary,
bonus and
benefits
. The agreement provides for an initial base salary of $400,000 to be reviewed annually. Mr. Kanslers salary may not be reduced, unless there is a salary reduction for similarly situated members of management).
Mr. Kansler will be eligible to participate in the AIP and may receive a bonus payment if he remains employed on the date the bonus is paid. The amount of the bonus award, if any, is in the Companys sole discretion. Mr. Kansler is
also entitled to participate in the employee benefits plans, programs, and arrangements as are customarily accorded to our executives.
56
Mr. Kanslers agreement entitles him to benefits in the event of an involuntary termination without Cause or
termination for Good Reason which are enumerated in Potential Payments upon Termination or Change in Control and are the same as those provided to Mr. Akeroyd and Ms. Granat.
Modified cutback in connection with a change in control
.
Mr. Kanslers agreement has the same cutback provision as that of
Mr. Akeroyd and Ms. Granat if any amounts received in connection with a change in control are subject to the excise tax imposed under Section 4999 of the Internal Revenue Code.
Covenants.
Mr. Kansler is subject to the same covenants as Mr. Akeroyd and Ms. Granat.
Amendment.
As of July 11, 2016, we amended Mr. Kanslers employment agreement in connection with the merger to provide for additional severance and benefit protection in connection with a
termination of employment, the terms of which are described in further detail in Potential Payments upon Termination or Change in Control below.
Separation Agreement with Jeffrey Gooch
. In connection with the Merger, we entered into a separation agreement with Mr. Gooch, which we refer to as the Gooch Separation Agreement, pursuant to
which Mr. Goochs employment agreement with legacy Markit, dated July 1, 2014, was terminated, together with Mr. Goochs employment with IHS Markit, on September 13, 2016.
The terms of the Gooch Separation Agreement provide for payment of accrued obligations (including earned salary and a sum in lieu of any accrued but unused
holiday), a lump sum equal to £55,385, which represents nine weeks notice, a sum of £600,000 in nine equal monthly installments and additional severance of £800,000 in twelve equal monthly installments, all of which would
have otherwise become payable pursuant to his original employment agreement. Additionally, IHS Markit agreed to contribute £500 inclusive of VAT and disbursements toward legal fees for advice given in connection with the termination and pay
him a termination payment of £564,784. Mr. Gooch agreed that the covenants contained in his original employment agreement related to confidentiality, intellectual property, and 12-month post-termination non-competition and
non-solicitation would survive such termination. In addition, under the Gooch Separation Agreement, 1,000,000 unvested stock options and 75,345 restricted share awards that had previously been granted to Mr. Gooch vested as of his termination
date.
The Gooch Separation Agreement also contained, among other things, customary mutual releases and non-disparagement provisions.
Separation Agreement with Stephen Wolff
.
In connection with the Merger we entered into a separation agreement with Mr. Wolff, which we
refer to as the Wolff Separation Agreement, pursuant to which Mr. Wolffs employment agreement with legacy Markit, dated July 1, 2014, was terminated, together with Mr. Wolffs employment with IHS Markit, on October 5,
2016.
The terms of the Separation Agreement provide for payment of accrued obligations (including earned salary and a sum in lieu of any accrued but
unused holiday), a lump sum equal to £24,615, which represents four weeks notice, a sum of £200,000 in three equal monthly installments and additional severance of £800,000 in twelve equal monthly installments, all of which
would have otherwise become payable pursuant to his original employment agreement. Additionally, IHS Markit agreed to contribute £750 inclusive of VAT and disbursements toward legal fees for advice given in connection with the termination and
pay him a termination payment of £448,505. Mr. Wolff agreed that the covenants contained in his original employment agreement related to confidentiality, intellectual property and 12-month post-termination non-competition and
non-solicitation would survive such termination. In addition, under the Wolff Separation Agreement, 600,000 unvested stock options and
57
40,172 restricted share awards that had previously been granted to Mr. Wolff vested as of his termination date.
The Wolff Separation Agreement also contained, among other things, customary mutual releases and non-disparagement provisions.
Potential Payments upon Termination or Change in Control
Other than Mr. Stead, each NEO has
entered into agreements that provide for key employment terms and compensation in the event of certain forms of termination of employment or a change in control of the Company. Agreements governing these payments were executed prior to the Merger by
the legacy companies, and certain terms differ. These agreements are described above in Executive Employment Agreements.
All of the NEOs,
including Mr. Stead, benefit from accelerated vesting of all or a portion of their equity awards following certain termination events, pursuant to the terms of their individual agreements. In addition to the amounts discussed in the tables
below, all of the NEOs may receive payouts from our qualified plans in the same manner that any salaried employee would (for instance, life or disability insurance payouts, pension plan payouts, or similar benefits). Mr. Stead and
Mr. Hyatt also would receive the benefits described in further detail in Pension Benefits and Nonqualified Deferred Compensation.
The table below provides details of the nature and amounts of compensation to each NEO, assuming a hypothetical termination (or a change in control of the Company and subsequent termination) on November 30,
2016, the last day of our most recent fiscal year. The tables are based on the following four scenarios:
1.
|
Voluntary Termination Other Than for Good Reason or Involuntary Termination for Cause
|
This category refers to voluntary terminations by the executive other than for Good Reason (including resignations, retirements, or other terminations by mutual agreement) as well as terminations by the Company for
Cause (including willful failure to perform material duties).
2.
|
Involuntary Termination Without Cause or Termination for Good Reason without Change in Control
|
This category refers to voluntary terminations by the executive for Good Reason or involuntary terminations by the Company without Cause, without a preceding change in control. For legacy Markit executive officers,
the Merger constituted a change in control, thus, the scenario is not applicable as of November 30, 2016 for Messrs. Uggla, Akeroyd and Kansler and Ms. Granat.
3.
|
Involuntary Termination Without Cause or Termination for Good Reason with a Change in Control
|
Other than Mr. Stead, each of the NEOs who were employed as of the last day of the fiscal year had protection in the event of termination following a change in control. For legacy Markit NEOs (Messrs. Uggla,
Akeroyd, Kansler and Ms. Granat), the Merger of IHS and Markit constituted a change in control for purposes of their employment terms and they are entitled to change in control protection through July 12, 2018.
Mr. Hyatt has protection in the
event of his death or disability. Messrs. Stead and Hyatt are entitled to accelerated vesting of their equity awards in the event of death or disability, where disability is defined as a mental or physical illness that entitles the executive to
receive benefits under the applicable Company long-term disability plan.
58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential Post-Termination Payments Table
|
|
Name
|
|
Payments Upon Separation
|
|
Voluntary
Termination
Other Than
For Good
Reason or
Involuntary
Termination
for
Cause
($)
|
|
|
Involuntary
Termination
Without
Cause or for
Good Reason
(not Related
to Change
in
Control)
($)
|
|
|
Involuntary
Termination
Without
Cause or
Termination
for Good
Reason
(Change
in
Control)
($)
|
|
|
Death
($)
|
|
|
Disability
($)
|
|
Jerre Stead
(1)
|
|
PSUs
(2)
|
|
|
|
|
|
|
|
|
|
|
6,109,800
|
|
|
|
6,109,800
|
|
|
|
6,109,800
|
|
|
|
RSUs
(3)
|
|
|
|
|
|
|
|
|
|
|
16,208,149
|
|
|
|
16,208,149
|
|
|
|
16,208,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,317,949
|
|
|
|
22,317,949
|
|
|
|
22,317,949
|
|
Lance Uggla
|
|
Cash Severance
(4)
|
|
|
|
|
|
|
(9
|
)
|
|
|
4,000,000
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Share Awards
(5)
|
|
|
|
|
|
|
(9
|
)
|
|
|
14,481,807
|
|
|
|
|
|
|
|
|
|
|
|
Stock
Options
(6)
|
|
|
|
|
|
|
(9
|
)
|
|
|
35,112,000
|
|
|
|
|
|
|
|
|
|
|
|
Perquisites
(7)
|
|
|
|
|
|
|
(9
|
)
|
|
|
212,522
|
|
|
|
|
|
|
|
|
|
|
|
Tax
Reimbursement
(8)
|
|
|
|
|
|
|
(9
|
)
|
|
|
175,548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53,981,877
|
|
|
|
|
|
|
|
|
|
Todd Hyatt
|
|
Cash
Severance
(10)
|
|
|
|
|
|
|
2,557,650
|
|
|
|
2,557,650
|
|
|
|
2,557,650
|
|
|
|
2,557,650
|
|
|
|
RSUs
(3)
|
|
|
|
|
|
|
11,606,535
|
|
|
|
11,606,535
|
|
|
|
11,606,535
|
|
|
|
11,606,535
|
|
|
|
Benefits Continuation
(11)
|
|
|
|
|
|
|
32,556
|
|
|
|
32,556
|
|
|
|
32,556
|
|
|
|
32,556
|
|
|
|
Outplacement Assistance
(12)
|
|
|
|
|
|
|
12,000
|
|
|
|
12,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,208,741
|
|
|
|
14,208,741
|
|
|
|
14,196,741
|
|
|
|
14,196,741
|
|
Shane Akeroyd
|
|
Cash
Severance
(13)
|
|
|
|
|
|
|
(9
|
)
|
|
|
2,083,333
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Share Awards
(14)
|
|
|
|
|
|
|
(9
|
)
|
|
|
2,361,474
|
|
|
|
|
|
|
|
|
|
|
|
Unvested Stock Options
(15)
|
|
|
|
|
|
|
(9
|
)
|
|
|
9,240,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,684,807
|
|
|
|
|
|
|
|
|
|
Sari Granat
|
|
Cash
Severance
(13)
|
|
|
|
|
|
|
(9
|
)
|
|
|
1,500,000
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Share Awards
(14)
|
|
|
|
|
|
|
(9
|
)
|
|
|
526,126
|
|
|
|
|
|
|
|
|
|
|
|
Unvested Stock Options
(15)
|
|
|
|
|
|
|
(9
|
)
|
|
|
2,635,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,661,626
|
|
|
|
|
|
|
|
|
|
Adam Kansler
|
|
Cash
Severance
(13)
|
|
|
|
|
|
|
(9
|
)
|
|
|
1,979,167
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Share Awards
(14)
|
|
|
|
|
|
|
(9
|
)
|
|
|
2,666,568
|
|
|
|
|
|
|
|
|
|
|
|
Unvested Stock Options
(15)
|
|
|
|
|
|
|
(9
|
)
|
|
|
9,240,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,885,735
|
|
|
|
|
|
|
|
|
|
(1)
|
Mr. Stead does not have an employment agreement and is not entitled to any payments upon termination for any reason other than the vesting of PSUs and RSUs, as described in
this table.
|
(2)
|
Upon a change in control or termination of employment due to death or disability, the vesting of Mr. Steads PSUs will be accelerated at target. The value above is
calculated by multiplying the number of unvested PSUs at target by $35.94, the closing price of IHS Markit shares on November 30, 2016. Actual awards will vest based on actual performance after the Board has certified the results.
|
(3)
|
Under a change in control or termination of employment due to death or disability, the vesting of Mr. Steads and Mr. Hyatts RSUs will be accelerated. The
value above is calculated by multiplying the number of unvested RSUs by $35.94, the closing price of IHS Markit shares on November 30, 2016.
|
(4)
|
In the event of an involuntary termination without Cause or termination for Good Reason within 12 months of a change in control, Mr. Uggla is entitled to receive a cash
severance payment equal to (a) one month of his base salary and target cash incentive (calculated at 150 percent of salary for this table) for every year of service, up to a maximum of 12 months, plus (b) an additional 12 months of salary
and target cash incentive. The severance is payable on a monthly basis over a 12-month period, with each payment contingent upon Mr. Uggla remaining in compliance with certain non-compete and non-solicitation restrictions (the Severance
Period).
|
(5)
|
In the event of an involuntary termination without Cause or termination for Good Reason during the first 12 months following the Merger, and in the event of an involuntary
termination without Cause or Termination for Good Reason as a result of the Succession Trigger (as defined in his amended employment agreement) before January 1, 2018, the vesting of Mr. Ugglas restricted share awards
will be accelerated. The value shown above is equal to the number of unvested restricted share awards multiplied by $35.94, the closing stock price of IHS Markit shares, on November 30, 2016.
|
(6)
|
In the event of an involuntary termination without Cause or termination for Good Reason during the first 12 months following the Merger, and in the event of an
involuntary termination without Cause or Termination for Good Reason as a result of the Succession Trigger (as defined in his amended employment agreement) before January 1, 2018, the vesting of Mr. Ugglas stock options
will be accelerated, and he will have 12 months from his termination date (or until the originally scheduled expiration date, if earlier) to exercise the options. The value shown above
|
59
|
is equal to $35.94, the closing stock price of IHS Markit shares on November 30, 2016, less the applicable exercise price multiplied by the number of unvested stock options held.
|
(7)
|
In the event of an involuntary termination without Cause or Termination for Good Reason, Mr. Uggla is entitled to continuation of the perquisites described in his employment
agreement for the Severance Period, which include a housing allowance, car allowance and tax reimbursement with respect to the housing allowance. Under the terms of his employment agreement, Mr. Uggla is also entitled to income tax preparation,
family travel to his home country of Canada, and certain club memberships. However, because he has currently waived receipt of those benefits, their value is not determinable.
|
(8)
|
Mr. Uggla is entitled to payments for the taxes due with respect to his housing allowance.
|
(9)
|
The Merger constituted a Change in Control under the terms of the employment agreements held by Messrs. Uggla, Akeroyd, and Kansler and Ms. Granat; thus, as of
November 30, 2016, in the event of an involuntary termination without Cause or for Good Reason, they would be entitled to Change in Control termination benefits.
|
(10)
|
As of November 30, 2016, in the case of an involuntary termination without Cause or Good Reason, or if his employment terminates due to death or disability, Mr. Hyatt
receives a cash severance payment equal to two times his base salary and target bonus plus a pro rata bonus payment at target, which for purposes of this table is reported on a full year basis. Mr. Hyatts agreement was amended in February
2017 to remove his entitlement to cash severance. See Executive Employment Agreements for a description of his new employment terms.
|
(11)
|
In the case of an involuntary termination without Cause or Good Reason, or if his employment terminates due to death or disability, in all cases prior to January 31, 2019,
Mr. Hyatt receives welfare benefits continuation for him and his family for 24 months.
|
(12)
|
In the case of an involuntary termination without Cause or Good Reason, in all cases prior to January 31, 2019, Mr. Hyatt receives outplacement assistance for 24
months.
|
(13)
|
In the event of an Involuntary Termination without Cause or Termination for Good Reason within 24 months following a Change in Control, Messrs. Akeroyd and Kansler and
Ms. Granat receive a cash severance payment equal to (a) one month of base salary and target cash incentive (calculated at 150 percent of salary for this table) for every year of service, up to a maximum of 12 months, plus (b) an
additional 12 months of salary and target cash incentive. The severance is payable on a monthly basis over a 12-month period, with each payment contingent upon the NEO complying with certain non-compete and non-solicitation restrictions.
|
(14)
|
In the event of an Involuntary Termination without Cause or Termination for Good Reason within 12 months following a Change in Control, the vesting of restricted share awards
held by Messrs. Akeroyd and Kansler and Ms. Granat will be accelerated (and the vesting of restricted share awards granted prior to the Merger will be accelerated if such a termination occurs after 12 months but before 24 months following the
Merger). The value shown above is equal to the number of unvested restricted share awards multiplied by $35.94, the closing stock price of IHS Markit shares on November 30, 2016.
|
(15)
|
In the event of an Involuntary Termination without Cause or Termination for Good Reason within 12 months following a Change in Control, the vesting of stock options held by
Messrs. Akeroyd and Kansler and Ms. Granat will be accelerated (and the vesting of stock options granted prior to the Merger will be accelerated if such a termination occurs after 12 months but before 24 months following the Merger). In
addition, each NEO will have 12 months from their respective termination date (or until the originally scheduled expiration date, if earlier) to exercise the options. The value shown above is equal to $35.94, the closing stock price of IHS Markit
shares on November 30, 2016, less the applicable exercise price multiplied by the number of unvested stock options held.
|
60
Post Termination Payments Jeffrey Gooch and Stephen Wolff
Effective as of September 13, 2016, the Company entered into an agreement to define certain terms of Mr. Goochs termination, and effective as of
October 5, 2016, the Company entered into an agreement to define certain terms of Mr. Wolffs termination. The terms of each agreement included a severance payment, a termination payment and accelerated vesting of unvested restricted
share awards and stock options as provided for in the terms of the restricted share awards and stock options award agreements. End-of-service payments for both Messrs. Gooch and Wolff were contingent upon each signing a release that, along with
other customary terms and conditions, released IHS Markit from any and all claims. Messrs. Gooch and Wolff are also each subject to non-compete and non-solicitation covenants for a period of 12 months after termination.
|
|
|
|
|
|
|
|
|
Actual Post-Termination Payments
(1)
|
|
Payments Upon Separation
|
|
Jeffrey Gooch ($)
|
|
|
Stephen Wolff ($)
|
|
Cash
Severance
(2)
|
|
|
1,897,000
|
|
|
|
1,355,000
|
|
Contractual Payment (including payment in lieu of notice)
|
|
|
75,182
|
|
|
|
33,489
|
|
Termination Payment
|
|
|
765,282
|
|
|
|
607,724
|
|
Restricted Share
Awards
(3)
|
|
|
2,787,012
|
|
|
|
1,476,321
|
|
Stock Options
(4)
|
|
|
10,290,000
|
|
|
|
6,030,000
|
|
Total
|
|
|
15,184,476
|
|
|
|
9,502,534
|
|
(1)
|
For purposes of this table, end of service payments for Messrs. Gooch and Wolff that were made in GBP (cash severance, contractual payment, termination payment and legal fees)
were converted to USD using an average annual exchange rate of 1.355 USD for 1 GBP.
|
(2)
|
Messrs. Gooch and Wolff each received a severance payment equal to (a) one month of base salary and target cash incentive (calculated at 150 percent of salary for this
table) for each year of service, plus (b) an additional 12 months of salary and target cash incentive. The severance is payable on a monthly basis over a 12-month period, with each payment contingent upon the former NEO remaining in compliance
with certain non-compete and non-solicitation restrictions.
|
(3)
|
Per the terms of Mr. Goochs and Mr. Wolffs restricted share awards, respectively, the vesting of any outstanding restricted share awards was accelerated
upon termination. For Mr. Gooch, the value shown above is equal to the number of accelerated restricted share awards multiplied by $36.99, the closing stock price of IHS Markit shares on Mr. Goochs termination date of
September 13, 2016. For Mr. Wolff, the value shown above is equal to the number of accelerated restricted share awards multiplied by $36.75, the closing stock price of IHS Markit shares on Mr. Wolffs termination date of
October 5, 2016.
|
(4)
|
Per the terms of Mr. Goochs and Mr. Wolffs stock options, respectively, the vesting of unvested stock options was accelerated, and each former NEO was given
12 months from his termination date to exercise outstanding stock options. For Mr. Gooch, the value shown above is equal to $36.99, the closing stock price of IHS Markit shares on September 13, 2016, less the applicable exercise price
multiplied by the number of accelerated stock options. For Mr. Wolff, the value shown above is equal to $36.75, the closing stock price of IHS Markit shares on Mr. Wolffs termination date of October 5, 2016, less the applicable
exercise price multiplied by the number of accelerated stock options.
|
Item 12. Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder Matters
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of February 8, 2017, unless otherwise noted, as to common shares beneficially owned
by: (i) each person who is known by us to own beneficially more than five percent of our common shares; (ii) each of our named executive officers listed in the 2016 Summary Compensation Table under Executive Compensation in
this Proxy Statement; (iii) each of our directors; and (iv) all our directors and executive officers as a group.
The percentage of common
shares beneficially owned is based on 434,965,635 common shares issued and outstanding as of February 8, 2017. We have only one class of shares issued and outstanding, that being common shares, and all holders of our common shares have the same
voting rights. Solely for purposes of the following table and accompanying footnotes relating to beneficial ownership of our common shares, the number of common shares issued and outstanding as of February 8, 2017 includes 25,219,470 common
shares held by the EBT as further described in footnote 16 to the table below and under Employee Benefit Trust.
61
In accordance with SEC rules, beneficial ownership includes voting or investment power with respect to
securities.
For purposes of this table, beneficial ownership has been determined in accordance with the provisions of Rule 13d-3 of the Exchange Act
under which, in general, a person is deemed to be the beneficial owner of a security if he or she has or shares the power to vote or direct the voting of the security or the power to dispose of or direct the disposition of the security, or if he or
she has the right to acquire beneficial ownership of the security within sixty (60) days. To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table
each have sole voting and investment power with respect to all common shares beneficially owned by them. We do not know of any arrangements which would result in a change in our control.
|
|
|
|
|
|
|
|
|
|
|
Common Shares
Beneficially Owned
|
|
Name and Address of Beneficial Owner
(1)
|
|
Number
(2)
|
|
|
Percentage
|
|
Jerre L.
Stead
(3)
|
|
|
1,173,972
|
|
|
|
*
|
|
Lance
Uggla
(4)
|
|
|
1,865,326
|
|
|
|
*
|
|
Todd Hyatt
|
|
|
74,850
|
|
|
|
*
|
|
Shane Akeroyd
|
|
|
1,119,854
|
|
|
|
*
|
|
Sari Granat
|
|
|
140,598
|
|
|
|
*
|
|
Adam Kansler
|
|
|
396,602
|
|
|
|
*
|
|
Jeffrey
Gooch
(5)
|
|
|
295,531
|
|
|
|
*
|
|
Stephen
Wolff
(6)
|
|
|
30,000
|
|
|
|
*
|
|
Dinyar S. Devitre
|
|
|
51,478
|
|
|
|
*
|
|
Ruann F. Ernst
|
|
|
70,837
|
|
|
|
*
|
|
William E.
Ford
(7)
|
|
|
10,502,984
|
|
|
|
2.4
|
%
|
Balakrishnan S.
Iyer
(8)
|
|
|
129,909
|
|
|
|
*
|
|
Robert P.
Kelly
(9)
|
|
|
66,256
|
|
|
|
*
|
|
Deborah Doyle
McWhinney
(10)
|
|
|
20,950
|
|
|
|
*
|
|
Jean-Paul
Montupet
(11)
|
|
|
30,678
|
|
|
|
*
|
|
Richard W.
Roedel
(12)
|
|
|
210,612
|
|
|
|
*
|
|
James A. Rosenthal
|
|
|
|
|
|
|
|
|
All current directors and executive officers as a group (24 persons)
|
|
|
16,921,275
|
|
|
|
3.9
|
%
|
Artisan
Partners
(13)
|
|
|
43,393,572
|
|
|
|
10.0
|
%
|
T. Rowe Price Associates, Inc.
(14)
|
|
|
29,621,576
|
|
|
|
6.8
|
%
|
The Vanguard
Group
(15)
|
|
|
26,326,470
|
|
|
|
6.1
|
%
|
Markit Group Holdings Limited Employee Benefit Trust
(16)
|
|
|
25,219,470
|
|
|
|
5.8
|
%
|
*
|
Represents less than 1 percent.
|
(1)
|
Unless otherwise stated below, the address of each beneficial owner listed on the table is c/o IHS Markit Ltd., 4th Floor, Ropemaker Place, 25 Ropemaker Street, London,
England EC2Y 9LY.
|
62
(2)
|
The number of shares reported as beneficially owned in this column includes restricted share awards, deferred share units and options that are exercisable within 60 days.
Excluded from the table above are options not exercisable within 60 days, unvested RSUs that are reported on the SEC Form 4, and performance share units that may be payable in common shares depending upon the achievement of certain performance
goals. The following table presents options not exercisable within 60 days, unvested RSUs that are reported on the SEC Form 4 and performance share units that may be payable in common shares depending upon the achievement of certain performance
goals.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluded in Security Ownership Table Above
|
|
Name
|
|
Options not
exercisable
within 60 days
|
|
|
Unvested Restricted
Share Units With
Time-Based Vesting
|
|
|
Unvested
Restricted Share
Units With
Performance-
Based Vesting
(a)
|
|
Jerre L. Stead
|
|
|
|
|
|
|
248,962
|
|
|
|
322,091
|
|
Lance Uggla
|
|
|
3,800,000
|
|
|
|
|
|
|
|
152,091
|
|
Todd Hyatt
|
|
|
|
|
|
|
399,272
|
|
|
|
25,348
|
|
Shane Akeroyd
|
|
|
1,000,000
|
|
|
|
10,773
|
|
|
|
10,773
|
|
Sari Granat
|
|
|
270,000
|
|
|
|
9,506
|
|
|
|
9,505
|
|
Adam Kansler
|
|
|
1,000,000
|
|
|
|
17,111
|
|
|
|
17,110
|
|
Jeffrey Gooch
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen Wolff
|
|
|
|
|
|
|
|
|
|
|
|
|
Dinyar Devitre
|
|
|
|
|
|
|
1,708
|
|
|
|
|
|
Ruann F. Ernst
|
|
|
|
|
|
|
1,708
|
|
|
|
|
|
William E. Ford
|
|
|
|
|
|
|
1,708
|
|
|
|
|
|
Balakrishnan S. Iyer
|
|
|
|
|
|
|
1,708
|
|
|
|
|
|
Robert Kelly
|
|
|
|
|
|
|
1,708
|
|
|
|
|
|
Deborah Doyle McWhinney
|
|
|
|
|
|
|
1,708
|
|
|
|
|
|
Jean-Paul Montupet
|
|
|
|
|
|
|
1,708
|
|
|
|
|
|
Richard W. Roedel
|
|
|
|
|
|
|
1,708
|
|
|
|
|
|
James A. Rosenthal
|
|
|
|
|
|
|
|
|
|
|
|
|
All current directors and executive officers as a group (24 persons)
|
|
|
6,970,000
|
|
|
|
1,729,787
|
|
|
|
628,760
|
|
|
(a)
|
PSUs are reported at target performance level.
|
(3)
|
Mr. Steads reported ownership includes 920,764 common shares held by JMJS II LLP, a family trust. Ownership includes 368,860 common shares pledged as collateral to
secure certain personal indebtedness.
|
(4)
|
Mr. Ugglas reported ownership does not include common shares held through a trust, of which Mr. Uggla and certain members of his family are beneficiaries.
|
(5)
|
Mr. Gooch ceased his role as an executive officer on July 12, 2016, and his share ownership is reported as of December 31, 2016 and options held as of
February 8, 2017.
|
(6)
|
Mr. Wolff ceased his role as an executive officer on July 12, 2016, and his share ownership is reported as of December 31, 2016 and options held as of
February 8, 2017.
|
(7)
|
Mr. Fords reported ownership includes 980 deferred share units and 10,500,000 common shares held by General Atlantic Partners Tango, L.P. (GA Tango). The
general partner of GA Tango is GAP (Bermuda) Limited (GAP (Bermuda) Limited). The limited partners of GA Tango are the following General Atlantic investment funds: General Atlantic Partners (Bermuda) II, L.P. (GAP Bermuda
II), GAP Coinvestments III, LLC (GAPCO III), GAP Coinvestments IV, LLC (GAPCO IV), GAP Coinvestments CDA, L.P. (GAPCO CDA) and GAPCO GmbH & Co. KG (GAPCO KG). The general partner of GAP
Bermuda II is General Atlantic GenPar (Bermuda), L.P. (GenPar Bermuda) and the general partner of GenPar Bermuda is GAP (Bermuda) Limited. General Atlantic LLC (GA LLC) is the managing member of GAPCO III and GAPCO IV and the
general partner of GAPCO CDA. GAPCO Management GmbH (Management GmbH) is the general partner of GAPCO KG. The Managing Directors of GA LLC are also the directors and voting shareholders of GAP (Bermuda) Limited. The Managing Directors of
GA LLC make voting and investment decisions with respect to securities held by GAPCO KG and Management GmbH. Mr. Ford is the Chief Executive Officer and a Managing Director of GA LLC. Mr. Ford disclaims beneficial ownership of such
securities except to the extent of his pecuniary interest therein. The common shares held by GA Tango are pledged as collateral to a third party lender to secure certain indebtedness of GA Tango. Mr. Fords address is c/o General Atlantic
Service Company, LLC, 55 East 52nd Street, 32nd Floor, New York, NY 10055.
|
(8)
|
Mr. Iyers reported ownership includes 58,827 deferred share units and 44,456 common shares held in irrevocable trusts for his children.
|
(9)
|
Mr. Kellys reported ownership includes 1,563 deferred share units.
|
(10)
|
Ms. McWhinneys reported ownership includes 7,044 deferred share units.
|
(11)
|
Mr. Montupets reported ownership includes 27,122 deferred share units and 3,556 common shares held in irrevocable family trusts.
|
(12)
|
Mr. Roedels reported ownership includes 11,029 common shares held by a profit sharing plan, as well as 130,230 deferred share units and 69,353 common shares held by
his wife. Mr. Roedel disclaims beneficial ownership of these shares.
|
(13)
|
This information was obtained from the Schedule 13G/A jointly filed with the SEC on February 3, 2017 by Artisan Partners Limited Partnership, Artisan Investments GP LLC,
Artisan Partners Holdings LP, and Artisan Partners Asset Management Inc. (collectively, Artisan Partners). Artisan Partners has shared voting power over 40,691,082 common shares and shared dispositive power over 43,393,572 common shares.
These securities have been acquired on behalf of discretionary clients of APLP. Persons other than APLP are entitled to receive all dividends from, and proceeds from the sale of, those shares. None of those persons, to the knowledge of Artisan
Partners has an economic interest in more than 5% of the class. The address of Artisan Partners is 875 East Wisconsin Avenue, Suite 800, Milwaukee, WI 53202.
|
(14)
|
This information was obtained from the Schedule 13G filed with the SEC on February 7, 2017 by T. Rowe Price Associates, Inc. (Price Associates).
Price Associates has sole voting power over 8,827,150 common shares and sole dispositive power over 29,621,576 shares. Price Associates does not serve as custodian of the assets of any of its clients; accordingly, in each instance only the client or
the clients custodian or
|
63
|
trustee bank has the right to receive dividends paid with respect to, and proceeds from the sale of, such securities. The ultimate power to direct the receipt of dividends paid with respect to,
and the proceeds from the sale of, such securities, is vested in the individual and institutional clients which Price Associates serves as investment adviser. Any and all discretionary authority which has been delegated to Price Associates may be
revoked in whole or in part at any time. To the knowledge of Price Associates, not more than 5% of the class is owned by any one client subject to the investment advice of Price Associates. The address of Price Associates is 100 E. Pratt Street,
Baltimore, Maryland 21202.
|
(15)
|
This information was obtained from the Schedule 13G filed with the SEC by The Vanguard Group (Vanguard) on February 10, 2017. Vanguard has sole voting power over
212,349 shares, shared voting power over 62,411 shares, sole dispositive power over 26,061,301 shares, and shared dispositive power over 265,169 shares. To the knowledge of Vanguard, it does not hold more than five percent of the class on behalf of
another person. The address of Vanguard is 100 Vanguard Blvd., Malvern, PA 19355.
|
(16)
|
This information was obtained from the Schedule 13G/A filed with the SEC on January 23, 2017 by Intertrust Employee Benefit Trustee Limited. Intertrust Employee Benefit
Trustee Limited (IEBTL) is the trustee of the Markit Group Holdings Limited Employee Benefit Trust (EBT) and has the shared power to vote, direct the voting of, dispose of and direct the disposition of all the common shares
held by EBT. The address for IEBTL is 44 Esplanade, St Helier, Jersey JE4 9WG, Channel Islands. Unless IHS Markit directs otherwise, IEBTL may not vote any of the shares held by the EBT and is also generally obliged to forgo dividends.
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Employee Benefit Trust
The
Markit Group Holdings Limited Employee Benefit Trust (the EBT) is a discretionary trust established by a deed dated January 27, 2010 between Markit Group Holdings Limited and Elian Employee Benefit Trustee Limited (the
trustee), as trustee of the EBT, through which shares and other benefits may be provided to IHS Markits existing and former employees in satisfaction of their rights under any compensation or share incentive arrangements
established by IHS Markit. The trustee is an independent provider of fiduciary services, based in Jersey, Channel Islands. The EBT will terminate on January 27, 2090, unless terminated earlier by the trustee.
No current or former employee has the right to receive any benefit from the EBT unless and until the trustee exercises its discretion to confer a benefit. Neither
IHS Markit nor any of its subsidiaries is permitted to be a beneficiary of the EBT. Subject to the exercise of the trustees discretion, shares held by the EBT may be delivered to such employees in satisfaction of their rights under any share
incentive arrangements established by IHS Markit. We may make non-binding recommendations to the trustee regarding the EBT.
The Trustee may amend the
EBT, subject to our consent, but not in any manner that would confer on IHS Markit any benefit or possibility of benefit. The principal activity of the EBT has been to acquire shares in Markit from its existing and former employees and to hold such
shares for their benefit. Unless we direct otherwise, the trustee of the EBT may not vote any of the common shares held by the EBT and is also generally obliged to forgo dividends.
We have historically funded the EBTs acquisition of common shares through interest-free loans that are repayable on demand, but without recourse to any assets other than those held by the trustee in its
capacity as trustee of the EBT.
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Securities Authorized for Issuance Under Equity Compensation Plans
The following table sets forth information as of November 30, 2016, the last day of fiscal year 2016, with respect to compensation plans under which equity
securities are authorized for issuance.
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Equity Compensation Plan Information
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Plan Category
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Number of securities to
be issued upon exercise
of outstanding
options,
warrants and rights
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Weighted-average
exercise price of
outstanding options,
warrants
and rights
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Number of securities
remaining available
for issuance under
equity compensation
plans
(excluding
securities reflected
in the first column)
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(in millions)
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(in millions)
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Equity compensation plans approved by security holders
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49.0
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(1)
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$
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24.89
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(2)
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20.9
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(3)
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Equity compensation plans not approved by security holders.
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Total.
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49.0
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$
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24.89
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20.9
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(1)
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Includes (a) 39.7 million stock options, (b) 8.3 million restricted share units and 0.4 million performance share units at target performance levels that
were issued with no exercise price or other consideration, (b) 0.3 million shares reserved for issuance if maximum performance on performance share units is met, and (c) 0.3 million deferred share units payable to non-employee
directors upon their termination of service.
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(2)
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The weighted-average exercise price is reported for the outstanding stock options reported in the first column. There are no exercise prices for the restricted share units,
performance share units or deferred share units included in the first column. There are no other outstanding warrants or rights.
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(3)
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Includes shares repurchased by the Company upon vesting of restricted share units and performance share units for a value equal to the minimum statutory tax liability.
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Item 13. Certain Relationships and Related Transactions, and Director Independence
Certain Relationships and Related Transactions
Credit Agreement
Until December 31, 2016, James Rosenthal, a director on our board, was an executive
officer of Morgan Stanley, whose affiliate is a party to and a lender under our revolving credit facility and term loan entered into in July 2016, and as such Mr. Rosenthal may have had an indirect interest in our revolving credit facility and
term loan. Morgan Stanley received standard fees and interest for loans made under the revolving credit facility and term loan. See our Annual Report on Form 10-K for the 2016 fiscal year for further information on our revolving credit facility and
term loan.
Use of Aircraft
From
time to time, the Company leases, on a non-exclusive basis, an aircraft operated by Jet Exchange Limited (Jet Exchange) for business-related purposes. The aircraft is owned by LJUG Partners LP, in which Lance Uggla, our President, has a
partial interest. The Company leases the aircraft on a per use basis from Jet Exchange and is not required to lease any minimum number of hours on the aircraft. Based on quotes for similar services provided by unrelated third parties, the Company
believes that the lease rates paid to Jet Exchange were no less favorable to the Company than those that could be obtained from unrelated third parties. For fiscal year 2016, the Company paid an aggregate of $0.45 million to Jet Exchange for use of
the aircraft. If Mr. Uggla uses the aircraft for business-related travel purposes, he is reimbursed per usage up to the equivalent amount of commercial airline fare in accordance with our travel policy.
65
Director nomination agreement
In Markits initial public offering in 2014, CPPIB purchased approximately $250 million of our common shares at the initial public offering price, and was given the right to nominate, in consultation with our
Nominating and Governance Committee, one director for appointment to our Board of Directors pursuant to a Director Nomination Agreement with us. This right will expire if CPPIBs beneficial ownership of our common shares falls below 100 percent
of the number of common shares CPPIB purchased in Markits initial public offering. At the time of the Merger, CPPIB determined that it would not choose to designate a nominee to our Board at that time.
Registration rights agreement
On
June 24, 2014, we entered into a registration rights and lock-up agreement (the Registration Rights Agreement) with our executive officers at the time and certain shareholders. On June 10, 2015, the Registration Rights
Agreement was amended in connection with a secondary offering of shares at that time (the 2015 Secondary Offering) in which the shareholders were permitted to sell up to 85 percent of their Initial Ownership Common Shares (as
defined below). The agreement, as amended, provides for the restrictions and rights set forth below. For purposes of this section only, Bank of America, Barclays, BNP Paribas, Citigroup, Deutsche Bank, Goldman Sachs, HSBC, J.P. Morgan, Morgan
Stanley, RBS, UBS, and Credit Suisse are referred to as the Bank Shareholders, and General Atlantic, Temasek and CPPIB are referred to as the PE Shareholders. The Bank Shareholders, PE Shareholders and the other persons party
to the agreement are collectively referred to in this section as the Shareholders.
Transfer restrictions
. Without our written
consent, the Bank Shareholders and PE Shareholders are not permitted to transfer any common shares they beneficially owned as of the closing of Markits initial public offering (the Initial Ownership Common Shares) except
(i) to certain permitted transferees (which, as a condition of transfer, must agree to be bound by the terms of the Registration Rights Agreement), (ii) after the first anniversary of the closing of Markits initial public offering,
in accordance with the registration rights provisions and the other transfer restrictions described below, or (iii) in the case of the Bank Shareholders, when the transfer restrictions cease to apply no later than the fifth anniversary of the
closing of Markits initial public offering and, in the case of the PE Shareholders, when the transfer restrictions cease to apply no later than the fourth anniversary of the closing of Markits initial public offering. With respect to a
Bank Shareholder, no more than 25 percent of such Bank Shareholders Initial Ownership Common Shares may be transferred pursuant to clause (ii) in each successive 12-month period beginning on the first anniversary of the closing of
Markits initial public offering or any anniversary thereof. With respect to a PE Shareholder, no more than
33-1/3 percent
of such PE Shareholders Initial Ownership Common Shares may be
transferred pursuant to clause (ii) in each successive 12-month period beginning on the first anniversary of the closing of Markits initial public offering or any anniversary thereof. If, however, any Bank Shareholder or PE Shareholder
does not transfer the maximum allowable number of Initial Ownership Common Shares in any 12-month period, such remaining number of Initial Ownership Common Shares will be available for transfer in the next subsequent 12-month period, and if a Bank
Shareholder or PE Shareholder sold more than 25 percent or
33-1/3
percent, as applicable, of such Shareholders Initial Ownership Common Shares in the 2015 Secondary Offering, then the number of such
shares such Shareholder would be permitted to sell in each remaining 12-month period is proportionally reduced.
In addition, our President, Lance
Uggla, separately agreed with us to transfer restrictions on 3,000,000 common shares either held by him or to which he is a beneficiary, on terms substantially similar to the transfer restrictions applicable to the PE Shareholders.
Demand registration rights
. Subject to the transfer restrictions described above, any two Shareholders that are either Bank Shareholders or PE Shareholders,
or both will be entitled to request
66
that we effect up to an aggregate of four demand registrations under the Registration Rights Agreement, but no more than one demand registration within (i) a period of 90 days after the
effective date of any other demand registration statement or (ii) any successive 12-month period beginning on the first anniversary of the closing of Markits initial public offering or any anniversary thereof. Within ten business days of
our receiving a demand notice, we must give notice of such requested demand registration to the other Shareholders. Within five business days after the date of our notice, any of such other Shareholders may request that we also effect the
registration of certain of their common shares that are eligible for registration. Any demand registration through the fourth anniversary of the closing of Markits initial public offering is required to meet an expected aggregate gross
proceeds threshold of $100 million.
The demand registration rights are subject to certain customary conditions and limitations, including customary
underwriter cut back rights and our ability to defer registration. If any Shareholders are cut back by the underwriters, they may either seek a waiver from us permitting them to sell any excluded common shares by any means available under the
Securities Act or request that we effect a second demand registration, which would not be deemed one of the four available demand registrations. If, in connection with a second demand registration, any Shareholders are cut back by the underwriters,
then such Shareholders may sell any excluded common shares by any means available under the Securities Act.
In addition, if, subsequent to the fourth
anniversary of the closing of Markits initial public offering, any PE Shareholder owns 100 percent of the number of its Initial Ownership Common Shares and our Board of Directors includes a PE Shareholder director nominee, such PE Shareholder
will be entitled to one additional demand registration (which each other PE Shareholder may join so long as it satisfies the same requirements as the requesting PE Shareholder). Such additional demand registration shall not be deemed one of the four
available demand registrations. In addition, if, as of the fourth anniversary of the closing of Markits initial public offering, any Shareholder owns more than 5 percent of our issued and outstanding common shares, then such Shareholder will
be entitled to one additional demand registration (which any other Shareholder may join so long as it satisfies the same requirements as the requesting Shareholder). Such additional demand registration shall not be deemed one of the four available
demand registrations.
Shelf registration rights
. Subject to the transfer restrictions described above, at any time after the first anniversary
of the closing of Markits initial public offering, if we are eligible to use a shelf registration statement, then any two Shareholders that are either Bank Shareholders or PE Shareholders, or both, will be entitled to request that we effect a
shelf registration on similar terms as the demand registrations described above, except that offerings will be conducted as underwritten takedowns. Each underwritten takedown constitutes a demand registration for purposes of the four demand
registrations we are obligated to effectuate subject to the additional demand rights described in the immediately preceding paragraph.
The Registration
Rights Agreement provides that we must pay all registration expenses (other than fees and expenses of the Shareholders, including counsel fees and any underwriting discounts and commissions) in connection with any effected demand registration or
shelf registration. The Registration Rights Agreement contains customary indemnification and contribution provisions.
Indemnification agreements
We have entered
into indemnification agreements with our directors and executive officers. The indemnification agreements and our bye-laws require us to indemnify our directors and executive officers to the fullest extent permitted by law.
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Review and Approval of Related Person Transactions
We have adopted a set of written related person transaction policies designed to minimize potential conflicts of interest arising from any dealings we may have with
our affiliates and to provide appropriate procedures for the disclosure, approval and resolution of any real or potential conflicts of interest which may exist from time to time. Such transactions generally include any non-ordinary course
transaction and the persons involved include any IHS Markit directors, nominees for director, executive officers, a person or entity that is known to be a beneficial owner of more than 5 percent of our voting securities,, or any immediate family
members or affiliates of any of them. It could include direct or indirect material interests in the transaction or the persons involved.
Our Board of
Directors has delegated to the Nominating and Governance Committee the responsibility for reviewing related person transactions. Such policies and procedures provide, among other things, that all related person transactions require approval by our
Nominating and Governance Committee, after considering all relevant facts and circumstances, including, without limitation, the commercial reasonableness of the terms, the benefit and perceived benefit, or lack thereof, to us, opportunity costs of
alternative transactions, the materiality and character of the related partys direct or indirect interest, and the actual or apparent conflict of interest of the related party, and after determining that the transaction is in, or not
inconsistent with, our best interests.
To support this process, each year we solicit internal disclosure of any transactions between IHS Markit and its
directors and executive officers, their immediate family members, and their affiliated entities, including the nature of each transaction and the amount involved. In addition, all directors, officers, and employees of IHS Markit are governed by the
IHS Markit Business Code of Conduct and our Conflict of Interest Policy, which require directors, officers and employees to inform the General Counsel or Chief Compliance Officer of any existing or proposed relationship, financial interest, or
business transaction that could be, or might appear to constitute, a conflict of interest or a related party transaction. The Nominating and Governance Committee annually reviews and evaluates all information received for each director as part of
its assessment of each directors independence.
There have been no related person transactions since the adoption of the related person
transaction policy where such policy was not followed.
Director Independence
Please see Item 10. Directors, Executive Officers and Corporate Governance Independent and Non-Management Directors for a discussion of director independence.
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Item 14. Principal Accountant Fees and Services
Audit, Audit-Related, and Tax Fees
In connection with
the audit of the Companys financial statements for the fiscal year ended November 30, 2016, IHS Markit entered into an engagement agreement with Ernst & Young LLP that set forth the terms by which Ernst & Young LLP
performed audit services for IHS Markit. Aggregate fees for professional services rendered for us by Ernst & Young LLP for the fiscal year ended November 30, 2016, and for IHS Inc., our accounting predecessor company, for the fiscal
year ended November 30, 2015, were as follows:
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2016
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2015
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(in thousands)
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Audit Fees
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$
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7,393
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$
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2,670
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Audit-Related Fees
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1,918
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708
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Tax Fees
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53
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19
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All Other Fees
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Total
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$
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9,364
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$
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3,397
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Audit Fees
. Audit fees consist of fees billed for professional services rendered for the audit of our consolidated financial
statements, the statutory audit of our subsidiaries, the review of our interim consolidated financial statements, and other services provided in connection with statutory and regulatory filings.
Audit-Related Fees
. Audit-related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit
or review of the Companys consolidated financial statements and are not reported under Audit Fees. These services may include employee benefit plan audits, auditing work on proposed transactions, attestation services that are not
required by regulation or statute, and consultations regarding financial accounting or reporting standards. For 2016, audit-related fees included approximately $1,043,000 for professional services rendered related to acquisitions and divestitures,
including the Merger. For 2015, audit-related fees included approximately $529,000 for professional services rendered related to acquisitions and divestitures.
Tax Fees
. Tax fees consist of tax compliance consultations, preparation of tax reports, and other tax services.
Audit Committee Pre-Approval Policies and Procedures
The Audit Committee has implemented pre-approval policies and procedures related to the provision of audit and non-audit services by Ernst & Young LLP, our
independent registered public accountants. Under these procedures, the Audit Committee pre-approves both the type of services to be provided by Ernst & Young LLP and the estimated fees related to these services.
During the approval process, the Audit Committee considers the impact of the types of services and the related fees on the independence of the registered public
accountants. The services and fees must be deemed compatible with the maintenance of such accountants independence, including compliance with rules and regulations of the U.S. Securities and Exchange Commission (the SEC or the
Commission) and the NASDAQ Stock Market.
The Audit Committee has delegated authority to pre-approve services performed by Ernst &
Young LLP to the chair of the Audit Committee for services of up to $500,000, with any approvals pursuant to
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such delegated authority regularly reported to the Audit Committee. The Audit Committee has not delegated any of its responsibilities to pre-approve services performed by Ernst & Young
LLP to management. Throughout the year, the Audit Committee will review any revisions to the estimates of audit and non-audit fees initially approved. No such services were approved pursuant to the procedures described in Rule 2-01(c)(7)(i)(C) of
Regulation S-X, which waives the general requirement for pre-approval in certain circumstances.
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