Proxy Statement (definitive) (def 14a)

Date : 12/05/2019 @ 5:36PM
Source : Edgar (US Regulatory)
Stock : Visa Inc (V)
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Proxy Statement (definitive) (def 14a)

Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant                        Filed by a Party other than the Registrant  

Check the appropriate box:

 

  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Pursuant to §240.14a-12

VISA INC.

 

 

(Name of Registrant as Specified In Its Charter)

 

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

  No fee required.
  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  (1)  

Title of each class of securities to which transaction applies:

 

 

 

(2)

 

 

Aggregate number of securities to which transaction applies:

 

 

 

(3)

 

 

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

 

(4)

 

 

Proposed maximum aggregate value of transaction:

 

 

 

(5)

 

 

Total fee paid:

 

  Fee paid previously with preliminary materials.
  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  (1)  

Amount Previously Paid:

 

 

 

(2)

 

 

Form, Schedule or Registration Statement No.:

 

 

 

(3)

 

 

Filing Party:

 

 

 

(4)

 

 

Date Filed:

 

 

 

 


Table of Contents

LOGO

Notice of 2020 Annual Meeting and Proxy Statement VISA


Table of Contents

 

LOGO   

 

Tuesday, January 28, 2020     

at 8:30 a.m. Pacific Time     

 

 

LOGO   

 

Le Méridien San Francisco     

333 Battery Street,     

San Francisco, California 94111     

 

LOGO   

 

If you wish to attend the     

Annual Meeting in person, you     

must reserve your seat by     

January 24, 2020 by contacting     

our Investor Relations     

Department at (650) 432-7644 or      InvestorRelations@visa.com.     

Please refer to the “Voting and     

Meeting Information” section of     

the proxy statement for     

additional information.     

 

LOGO   

 

A live audio webcast of the    

Annual Meeting will be    

available on the Investor    

Relations page of our website    

at http://investor.visa.com at    

8:30 a.m. Pacific Time on    

January 28, 2020.    

 

    

 

Items of Business

 

1.  To elect the eleven director nominees named in this proxy statement;

2.  To approve, on an advisory basis, the compensation paid to our named executive officers;

3.  To ratify the appointment of KPMG LLP as our independent registered public accounting firm for fiscal year 2020; and

4.  To transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof.

 

The proxy statement more fully describes these proposals.

 

Record Date

 

Holders of our Class A common stock at the close of business on November 29, 2019 are entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof. Holders of our Class A common stock will be entitled to vote on all proposals.

 

Proxy Voting

 

Your vote is very important. Whether or not you plan to attend the Annual Meeting, please vote at your earliest convenience by following the instructions in the Notice of Internet Availability of Proxy Materials or the proxy card you received in the mail. You may revoke your proxy at any time before it is voted. Please refer to the “Voting and Meeting Information” section of the proxy statement for additional information.

 

On or about December 5, 2019, we expect to release the proxy materials to the stockholders of our Class A common stock and to send to these stockholders (other than those Class A stockholders who previously requested electronic or paper delivery) a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials, including our proxy statement and our fiscal year 2019 Annual Report, and to vote through the Internet or by telephone.

 

By Order of the Board of Directors

 

LOGO

 

Kelly Mahon Tullier

Executive Vice President, General

Counsel and Corporate Secretary

 

Foster City, California

December 5, 2019

 

 

 

Important Notice Regarding the Availability of Proxy Materials
for the 2020 Annual Meeting of Stockholders to be held on
January 28, 2020. The proxy statement and Visa’s Annual
Report for fiscal year 2019 are available at
http://investor.visa.com.

 

 

 


Table of Contents

TABLE OF CONTENTS

 

PROXY SUMMARY

     1  

CORPORATE GOVERNANCE

     13  

Board Leadership Structure

     13  

Board of Directors and Committee Evaluations

     14  

Director Succession Planning and Board Refreshment

     15  

Independence of Directors

     15  

Executive Sessions of the Board of Directors

     16  

Limitation on Other Board and Audit Committee Service

     16  

Management Development and Succession Planning

     16  

The Board of Directors’ Role in Risk Oversight

     17  

Stockholder Engagement on Corporate Governance, Corporate Responsibility and Executive Compensation Matters

     18  

Communicating with the Board of Directors

     19  

Attendance at Board, Committee and Annual Stockholder Meetings

     19  

Codes of Conduct and Ethics

     19  

Political Engagement and Disclosure

     19  

Corporate Responsibility and Sustainability

     20  

COMMITTEES OF THE BOARD OF DIRECTORS

     23  

Audit and Risk Committee

     23  

Certain Relationships and Related Person Transactions

     24  

Report of the Audit and Risk Committee

     25  

Compensation Committee

     26  

Compensation Committee Interlocks and Insider Participation

     27  

Risk Assessment of Compensation Programs

     27  

Compensation Committee Report

     28  

Finance Committee

     28  

Nominating and Corporate Governance Committee

     29  

Process for Nomination of Director Candidates

     30  

Stockholder Recommended Candidates

     30  

Criteria for Nomination to the Board of Directors and Diversity

     31  

COMPENSATION OF NON-EMPLOYEE DIRECTORS

     32  

Highlights of our Non-Employee Directors Compensation Program

     32  

Annual Retainers Paid in Cash

     33  

Equity Compensation

     33  

Stock Ownership Guidelines

     34  

Charitable Matching Gift Program

     34  

Director Compensation Table for Fiscal Year 2019

     34  

Fees Earned or Paid in Cash

     35  

Fiscal Year 2020 Director Compensation

     35  

PROPOSAL 1  – ELECTION OF DIRECTORS

     36  

DIRECTOR NOMINEE BIOGRAPHIES

     38  

BENEFICIAL OWNERSHIP OF EQUITY SECURITIES

     44  

EXECUTIVE OFFICERS

     46  

 

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COMPENSATION DISCUSSION AND ANALYSIS

     48  

Executive Summary

     48  

Say-on-Pay

     55  

Setting Executive Compensation

     56  

Summary of Fiscal Year 2019 Base Salary and Incentive Compensation

     58  

Fiscal Year 2019 Compensation

     59  

Fiscal Year 2020 Compensation

     70  

Other Equity Grant Practices and Policies

     71  

Policy Regarding Clawback of Incentive Compensation

     72  

Tax Implications – Deductibility of Executive Compensation

     72  

CEO PAY RATIO

     74  

EXECUTIVE COMPENSATION

     75  

Summary Compensation Table for Fiscal Year 2019

     75  

All Other Compensation in Fiscal Year 2019 Table

     77  

Grants of Plan-Based Awards in Fiscal Year 2019 Table

     78  

Outstanding Equity Awards at 2019 Fiscal Year-End Table

     80  

Option Exercises and Stock Vested Table for Fiscal Year 2019

     82  

Pension Benefits Table for Fiscal Year 2019

     83  

Visa Retirement Plan

     83  

Visa Excess Retirement Benefit Plan

     84  

Non-qualified Deferred Compensation for Fiscal Year 2019

     84  

Employment Arrangements and Potential Payments upon Termination or Change of Control

     86  

PROPOSAL 2  – APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS

     91  

PROPOSAL 3  – RATIFICATION OF THE APPOINTMENT OF KPMG LLP

     92  

Independent Registered Public Accounting Firm Fees

     93  

VOTING AND MEETING INFORMATION

     94  

Information About Solicitation and Voting

     94  

Who Can Vote

     94  

How to Vote

     95  

Change or Revoke a Proxy or Vote

     95  

How Proxies are Voted

     95  

Proxy Solicitor

     97  

Voting Results

     97  

Viewing the List of Stockholders

     97  

Attending the Meeting

     97  

OTHER INFORMATION

     98  

Stockholder Nomination of Director Candidates and Other Stockholder Proposals for 2021 Annual Meeting

     98  

Stockholders Sharing the Same Address

     98  

Fiscal Year 2019 Annual Report and SEC Filings

     99  

 

 

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PROXY SUMMARY

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.

INFORMATION ABOUT OUR 2020 ANNUAL MEETING OF STOCKHOLDERS

 

 

LOGO

     

 

Tuesday, January 28, 2020 at 8:30 a.m. Pacific Time

 

 

LOGO

 

     

 

Le Méridien San Francisco, 333 Battery Street, San Francisco, California 94111

 

LOGO

 

     

Stockholders planning to attend the Annual Meeting in person must contact our Investor Relations Department at InvestorRelations@visa.com or (650) 432-7644 by January 24, 2020 to reserve a seat at the Annual Meeting.

LOGO

 

     

A live audio webcast of the Annual Meeting will be available on the Investor Relations page of our website at http://investor.visa.com at 8:30 a.m. Pacific Time on January 28, 2020.

LOGO

 

     

 

November 29, 2019

 

VOTING MATTERS

 

   

Proposals

   Board
Recommendation
   Page Number
for Additional
Information

LOGO

 

      

Election of eleven director nominees

  

FOR (each nominee)

 

   36

LOGO

 

      

Approval, on an advisory basis, of compensation paid to our named executive officers

   FOR    91

LOGO

 

      

Ratification of the appointment of our independent registered public accounting firm

   FOR    92


 

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CORPORATE GOVERNANCE AND BOARD HIGHLIGHTS

We are committed to corporate governance practices that promote long-term value and strengthen board and management accountability to our stockholders, customers and other stakeholders. Information regarding our corporate governance framework begins on page 13, which includes the following highlights:

 

 

  Number of director nominees

 

 

 

11

 

  

 

Demonstrated commitment to board refreshment

 

 

 

LOGO

 

  Percentage of independent director nominees

 

 

 

91%

 

  

 

Annual board, committee and director evaluations

 

 

 

LOGO

 

  Directors attended at least 75% of meetings

 

 

 

LOGO

  

 

Regularly focus on director succession planning

 

 

 

LOGO

 

  Annual election of directors

 

 

 

LOGO

  

 

Risk oversight by full board and committees

 

 

 

LOGO

 

  Majority voting for directors

 

 

 

LOGO

  

 

Stockholder outreach/engagement program

 

 

 

LOGO

 

  Proxy access (3%/3-years)

 

 

 

LOGO

  

 

Stock ownership requirements for directors and executive officers

 

 

 

LOGO

 

  Robust Lead Independent Director duties

 

 

 

LOGO

  

 

Political Participation, Lobbying and Contributions Policy

 

 

 

LOGO

 

  Regular executive sessions of independent   directors

 

 

 

LOGO

  

 

Oversight of corporate culture and human capital management

 

 

 

LOGO



 

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Snapshot of 2020 Director Nominees

Our director nominees exhibit an effective mix of diversity, experience and perspective

 

 

LOGO

 

       

 

Director

Since

         

Committee
Memberships

 

Other

Current

Public

Boards

   
     Name   Principal Occupation   Independent   ARC   CC   FC   NGC     

LOGO

 

Lloyd A. Carney

  2015   CEO, Carney Global Ventures LLC    

 

LOGO

 

 

 

 

 

 

  3  

LOGO

 

Mary B. Cranston

 

 

2007

 

 

Director

               

 

2

   

LOGO

  Francisco Javier
Fernández-Carbajal
  2007   Director General, Servicios
Administrativos Contry SA de CV
             

 

  3    

LOGO

 

Alfred F. Kelly, Jr.

  2014   Chairman and CEO, Visa  

 

       

 

   

 

   

 

     

LOGO

 

Ramon Laguarta

  2019   Chairman and CEO, PepsiCo, Inc.  

 

     

 

   

 

    1    

LOGO

 

John F. Lundgren

 

 

2017

 

 

Lead Independent Director, Visa

     

 

   

 

   

 

   

 

1

   

LOGO

 

Robert W. Matschullat

  2007   Director      

 

    LOGO    

 

  1    

LOGO

 

Denise M. Morrison

  2018   Founder, Denise Morrison & Associates, LLC          

 

   

 

  2    

LOGO

 

Suzanne Nora Johnson

  2007   Director         LOGO         3    

LOGO

 

John A. C. Swainson

  2007   Director        

 

   

 

  LOGO   1    

LOGO

 

Maynard G. Webb, Jr.

  2014   Founder, Webb Investment Network      

 

       

 

  1    

 

ARC = Audit and Risk Committee     CC = Compensation Committee     FC = Finance Committee

NGC = Nominating & Corporate Governance Committee

 

 

LOGO  = Chair     = Member



 

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EXECUTIVE COMPENSATION PROGRAM HIGHLIGHTS

Highlights of Our Compensation Programs

 

WHAT WE DO:
 

 

LOGO

  

 

Pay for performance

 

 

LOGO

  

 

Annual say-on-pay vote

 

 

LOGO

  

 

Clawback policy

   

 

LOGO

  

 

Short-term and long-term incentives/measures

 

 

LOGO

  

 

Capped incentive awards

 

 

LOGO

  

 

Independent compensation consultant

 

 

LOGO

  

 

Stock ownership guidelines

   

 

LOGO

  

 

Limited perquisites and no related tax gross-ups

 

 

LOGO

  

 

Engagement with stockholders

 WHAT WE DO NOT DO:
 

 

LOGO

  

 

Gross-ups for excise taxes

 

 

LOGO

  

 

Reprice stock options

 

 

LOGO

  

 

Fixed-term employment agreements

 

 

LOGO

  

 

No single-trigger severance arrangements

 

 

LOGO

  

 

Permit hedging and pledging of Visa securities

 


 

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Our Compensation Philosophy, Principles and Key Elements

We provide our named executive officers with short- and long-term compensation opportunities that encourage increasing performance to enhance stockholder value while avoiding excessive risk-taking.

We maintain compensation plans that tie a substantial portion of our named executive officers’ overall target annual compensation to the achievement of our corporate performance goals as well as their individual performance. The Compensation Committee employs multiple performance measures and strives to award an appropriate mix of annual and long-term equity incentives to avoid overweighting short-term objectives. As described below, these performance measures include environmental, social and governance (ESG) factors because ESG practices are important elements of the Company’s long-term corporate strategy.

 

 

LOGO

 

       

Annual Incentive Plan: Individual and Corporate Performance

 

 

     

  A significant portion of our executive officers’ individual performance goals is tied to one or more of our strategic pillars (as explained further in this proxy statement under Individual Performance Goals and Results for Fiscal Year 2019)

 

  The executive officers’ individual performance goals may also include ESG factors such as:

·  Diversity and inclusion

·  Employee leadership and development

·  Cybersecurity and data privacy

·  Financial inclusion and access

 

  We link a substantial portion of compensation to corporate performance through use of annual cash incentives determined by Net Income Growth and Net Revenue Growth

 

 

       

Aligns executive officers’ interests with stockholders’ interests by:

 

  rewarding individual performance for achievement of strategic goals (designed to position the Company competitively)

 

  promoting strong annual net income and revenue growth

 

 

 

       

Long-Term Equity Grants: Individual and Corporate Performance

 

 

       

  We consider individual performance (which is tied to the strategic pillars, including relevant ESG factors) in setting the value of our executive officers’ long-term equity grant

 

  We link a substantial portion of compensation to long-term corporate performance through the use of long-term incentives, including performance shares that use EPS and relative TSR as financial metrics

       

Further aligns executive officers’ interests with long-term stockholders’ interests by:

 

  taking individual performance (which is tied to strategic pillars) into account in making grants

 

  linking a substantial portion of long-term compensation to long-term corporate performance and operational efficiency

 

 

 



 

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Principles of Our Compensation Programs
Pay for Performance   

 

The key principle of our compensation philosophy is pay for performance.

 

Alignment with Stockholders’ Interests

  

We reward performance that meets or exceeds the performance goals that the Compensation Committee establishes with the objective of increasing stockholder value.

 

 

Variation
Based on Performance

  

 

We favor variable pay opportunities that are based on performance over fixed pay. The total compensation received by our named executive officers varies based on corporate and individual performance measured against annual and long-term goals.



 

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LOGO

 



 

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FISCAL YEAR 2019 COMPANY PERFORMANCE HIGHLIGHTS

 

 

LOGO

 

 

(1) 

For further information regarding non-GAAP adjustments, including a reconciliation to GAAP, please see Item 7- Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview in our 2019 Annual Report as filed on Form 10-K with the Securities and Exchange Commission on November 14, 2019.

(2) 

Total shareholder return includes reinvestment of dividends.



 

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BOARD’S ROLE IN LONG-TERM STRATEGIC PLANNING

The Board takes an active role with management to formulate and review Visa’s long-term corporate strategy. Our strategic framework contains foundational pillars that are fundamental to maintaining Visa’s operational excellence and reputation as a trusted leader in the industry, and growth pillars that are critical for driving long-term sustained growth in a rapidly evolving landscape. At the center of our strategic framework is the “develop best talent” pillar, which reflects how our commitment to attract, develop and retain the best people globally is crucial to all aspects of Visa’s activities and long-term success.

Each quarter, the Board and management routinely confer on the execution of our long-term strategic plans, the status of key initiatives and the key opportunities and risks facing Visa. In addition, the Board regularly conducts in-depth long-term strategic reviews with our senior management team. During these reviews, the Board and management discuss the payments landscape, emerging technological and competitive threats, and short- and long-term plans and priorities within these strategic pillars.

Additionally, the Board annually discusses and approves the budget and capital requests, which are firmly linked to Visa’s long-term strategic plans and priorities. Through these processes, the Board brings its collective, independent judgment to bear on the most critical long-term strategic issues facing Visa. For more information on our long-term strategy and the progress we made against our strategic goals in fiscal 2019, please see our 2019 Annual Report, including the letter from our Chairman and Chief Executive Officer, Alfred F. Kelly, Jr., to our stockholders.

Strategic Framework

 

 

LOGO



 

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Corporate Culture and Human Capital Management

Attracting, developing and retaining the best people globally is crucial to all aspects of Visa’s activities and long-term success, and is central to our long-term strategy. We are investing in our employees to ensure we remain an employer of choice, and to continue to build an inclusive culture that inspires leadership, encourages innovative thinking and welcomes everyone.

Visa has created a culture where all employees are encouraged to be leaders. To build this culture, we have embraced the following Visa Leadership Principles that are integrated into all we do, and drive accountability for the way we act and the way we lead:

 

 

LOGO

The Board and its committees have oversight of our leadership culture. We foster an inclusive workplace that encourages diversity of thought, culture and background. Our Nominating and Corporate Governance Committee includes women and minority candidates in the pool from which the Committee considers director candidates.

Management is responsible for ensuring our policies and processes reflect and reinforce our desired corporate culture, including policies and processes related to strategy, risk management, and ethics and compliance. Recently, our Chairman and Chief Executive Officer was a signatory to The Business Roundtable Statement on Corporate Purpose, which commits signatories to (i) delivering value to customers, (ii) investing in employees, (iii) dealing fairly and ethically with suppliers, (iv) supporting communities, and (v) generating long-term shareholder value.

Employee Development and Engagement

Visa understands that being an employer of choice requires providing best-in-class training and development opportunities, while creating innovative programs that enable a vibrant and engaged learning culture to flourish. We strive to achieve this through a number of forums, including Visa University, our signature global learning platform that houses more than 80,000 learning resources. Classes are taught and facilitated by company leaders and external speakers who bring real-world context and ideas for practical application that are aligned with Visa’s goals.

We recognize that building an inclusive and high-performance culture requires an engaged workforce, where employees are motivated to do their best work every day. Our engagement approach centers on communication and recognition. We communicate with our employees in a variety of ways, including company intranet, digital signage, live events in regional offices and quarterly all-staff meetings. Our recognition programs include our Go Beyond program, where managers and peers recognize employees who exemplify our leadership principles.

We assess employee engagement through a variety of channels, including our annual employee survey, which provides feedback on a variety of topics, such as company direction and strategy, diversity and inclusion, individual growth and development, collaboration and confidence and trust. For the second year in



 

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a row we had an exceptional response rate of 95% with improvement in the survey results across the board and no items with notably declining scores. We had high scores in areas such as Strategy and Direction; Confidence and Trust; and Diversity and Inclusion.

Employee Benefits

We believe our employees are one of our most important assets, and we structure our total rewards and benefits package to attract and retain a talented and engaged workforce. We continue to evolve our programs to meet our employees’ needs, providing comprehensive health, financial wellness and quality of life coverage. Our programs vary by location, but may include:

 

 

LOGO

Diversity and Inclusion

Visa is committed to cultivating a diverse and inclusive environment that supports the development and advancement of all. We create a feeling of connectedness in the workplace; support diversity of background; experience and thought; support pay equity and actively work to eliminate unconscious biases that can hold us all back.

As a global company, we believe our workforce should reflect the diversity of our clients and partners to better understand how to tailor our products and services to meet their demands and expectations. With that mission in mind, Visa’s approach to diversity and inclusion involves four key areas of focus:

Diversity and Inclusion Strategy

 

 

LOGO

These goals help us harness the innovative potential of a diverse workforce and drive our business initiatives.



 

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Workforce Demographics and Pay Equity

Visa tracks, measures and evaluates our workforce representation and impact as part of our strategic business imperative to build a diverse and inclusive organization. We are committed to reporting our workforce demographics annually.

 

 

LOGO

Equal Pay for Equal Work

Men and women earn the same pay for the same work globally, and the same is true

for racial and ethnic minorities and their white peers in the US.

 

 

LOGO

* Notes:

 

Data is based on company records as of September 30, 2019.

 

Leadership: Defined as VP and above.

 

Others: American Indian/Alaska Native, Native Hawaiian/Other Pacific Islander and two or more races. Ethnicity data does not include undeclared and blanks.

 

Equal pay analysis is based on FY19 total compensation, which includes base salary, VIP (Visa Incentive Plan) and LTIP (Long-Term Incentive Program).



 

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CORPORATE GOVERNANCE

Members of our Board oversee our business through discussions with our Chief Executive Officer; President; Vice Chairman and Chief Financial Officer; General Counsel; Chief Risk Officer; President, Technology; and other officers and employees, and by reviewing materials provided to them and participating in regular meetings of the Board and its committees.

The Board regularly monitors our corporate governance policies and profile to ensure we meet or exceed the requirements of applicable laws, regulations and rules, and the listing standards of the New York Stock Exchange (NYSE). We have instituted a variety of practices to foster and maintain responsible corporate governance, which are described in this section. To learn more about Visa’s corporate governance and to view our Corporate Governance Guidelines, Code of Business Conduct and Ethics, the charters of each of the Board’s committees, and our Corporate Responsibility and Sustainability Report, please visit the Investor Relations page of our website at http://investor.visa.com under “Corporate Governance.” You may request a printed copy of any of these documents free of charge by contacting our Corporate Secretary at Visa Inc., P.O. Box 193243, San Francisco, CA 94119 or corporatesecretary@visa.com.

Board Leadership Structure

The Board believes that it is in the best interests of the Company and its stockholders to periodically review and evaluate the Board’s leadership structure based on the Company’s strategy, business, culture and operating environment. Over the course of the past year, the Board discussed the relative benefits of combining the Chairperson and Chief Executive Officer roles versus retaining the separate roles with an independent Chairperson in our current competitive and regulatory environment. After considering the perspectives of our independent directors, views of our stockholders, peer companies’ practices, and recent governance trends, the Board unanimously elected Al Kelly, our Chief Executive Officer, as Chairman. The Board believes that Mr. Kelly’s inclusive leadership style and decades of payments expertise make him uniquely qualified to lead discussions of the Board; foster an important unity of leadership between the Board and management; and promote alignment of the Company’s strategy with its operational execution.

In addition, the independent directors reaffirmed the Board’s commitment to independent board leadership by unanimously electing John Lundgren as Lead Independent Director. Mr. Lundgren has significant experience as a CEO, including in a combined role of CEO and Chair, so he is familiar with the combined board leadership structure and the importance of building strong relationships with the various constituencies. In order to ensure independent leadership, the Board developed a robust set of responsibilities for the Lead Independent Director role, including:

 

   

calling, setting the agenda for, and chairing periodic executive sessions and meetings of the independent directors;

 

   

chairing Board meetings in the absence of the Chairperson of the Board or when it is deemed appropriate arising from the Chairperson’s management role or non-independence;

 

   

providing feedback to the Chairperson and CEO on corporate and Board policies and strategies and acting as a liaison between the Board and the CEO;

 

   

facilitating communication among directors and between the Board and management;

 

   

in concert with the Chairperson and CEO, advising on the agenda, schedule and materials for Board meetings and strategic planning sessions based on input from directors;

 

   

coordinating with the Chair of the Nominating and Corporate Governance Committee, leading the independent directors’ involvement in CEO succession planning, selection of committee chairs and committee membership, and the board evaluation process;

 

   

coordinating with the Chair of the Compensation Committee, leading the independent directors’ evaluation of CEO performance and compensation;

 

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communicating with major shareholders as necessary; and

 

   

carrying out such other duties as are requested by the independent directors, the Board or any of its committees from time to time.

The Board will continue to periodically review the Board’s leadership structure and its appropriateness given the needs of the Board and the Company at such time.

In addition to our Lead Independent Director, independent directors chair the Board’s four standing committees: the Audit and Risk Committee, chaired by Lloyd A. Carney; the Compensation Committee, chaired by Suzanne Nora Johnson; the Finance Committee, chaired by Robert W. Matschullat; and the Nominating and Corporate Governance Committee, chaired by John A.C. Swainson. In their capacities as independent committee chairs, Messrs. Carney, Matschullat, Swainson and Ms. Nora Johnson each have responsibilities that contribute to the Board’s oversight of management, as well as facilitating communication among the Board and management.

Board of Directors and Committee Evaluations

Our Board recognizes that a robust and constructive Board and committee evaluation process is an essential component of board effectiveness. As such, our Board and each of our committees conduct an annual evaluation facilitated by an independent third party, which includes a qualitative assessment by each director of the performance of the Board and the committee or committees on which the director sits. The Board also conducts an annual peer review, which is designed to assess individual director performance. The Nominating and Corporate Governance Committee, in conjunction with the Lead Independent Director, oversees the evaluation process.

 

 

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Feedback Incorporated

Over the past few years, the evaluation process has led to a broader scope of topics covered in the board meetings and
improvements in board process. Last year’s evaluation contributed to the Board:

  combining the Chair and CEO roles and electing a Lead Independent Director with robust responsibilities
  refreshing board committee memberships, and
  conducting additional robust strategy sessions

 

This year’s evaluation identified areas for continued focus, including:

  strategy and broader market trends
  enhancements to board effectiveness
  risk management, including the Board’s role in a crisis
  Board composition in support of long-term strategy, and
  management succession planning

 

 

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Director Succession Planning and Board Refreshment

In addition to executive and management succession, the Nominating and Corporate Governance Committee regularly oversees and plans for director succession and refreshment of the Board to ensure a mix of skills, experience, tenure, and diversity that promote and support the Company’s long-term strategy. In doing so, the Nominating and Corporate Governance Committee takes into consideration the overall needs, composition and size of the Board, as well as the criteria adopted by the Board regarding director candidate qualifications, which are described in the section entitled Corporate Governance – Nomination of Directors. Individuals identified by the Nominating and Corporate Governance Committee as qualified to become directors are then recommended to the Board for nomination or election.

Independence of Directors

The NYSE’s listing standards and our Corporate Governance Guidelines provide that a majority of our Board and every member of the Audit and Risk, Compensation and Nominating and Corporate Governance committees must be “independent.” Our Certificate of Incorporation further requires that at least fifty-eight percent (58%) of our Board be independent. Under the NYSE’s listing standards, our Corporate Governance Guidelines and our Certificate of Incorporation, no director will be considered to be independent unless our Board affirmatively determines that such director has no direct or indirect material relationship with Visa or our management. Our Board reviews the independence of its members annually and has adopted guidelines to assist it in making its independence determinations. For details, see our Corporate Governance Guidelines, which can be found on the Investor Relations page of our website at http://investor.visa.com under “Corporate Governance.”

In October 2019, with the assistance of legal counsel, our Board conducted its annual review of director independence and affirmatively determined that each of our then-serving non-employee directors (Lloyd A. Carney, Mary B. Cranston, Francisco Javier Fernández-Carbajal, Suzanne Nora Johnson, John F. Lundgren, Robert W. Matschullat, Denise M. Morrison, John A. C. Swainson and Maynard G. Webb, Jr.) is “independent” as that term is defined in the NYSE’s listing standards, our independence guidelines and our Certificate of Incorporation. In connection with his appointment to the Board in November 2019, our Board reviewed and affirmatively determined that Mr. Laguarta is independent under the same standard.

In making the determination that the directors listed above are independent, the Board considered relevant transactions, relationships and arrangements, including those specified in the NYSE listing standards and our independence guidelines, and determined that these relationships were not material relationships that would impair the director’s independence. In this regard, the Board considered that certain directors serve as directors of other companies with which the Company engages in ordinary-course-of-business transactions, and that, in accordance with our director independence guidelines, none of these relationships constitute material relationships that would impair the independence of these individuals. Discretionary contributions to certain charitable organizations with which some of our directors are affiliated also were considered, and the Board determined that the amounts contributed to each of these charitable organizations in the past fiscal year were less than $120,000 and that these contributions otherwise created no material relationships that would impair the independence of those individuals.

In addition, each member of the Audit and Risk Committee and the Compensation Committee meets the additional, heightened independence criteria applicable to such committee members under the applicable NYSE rules.

 

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Executive Sessions of the Board of Directors

The non-employee, independent members of our Board and all committees of the Board generally meet in executive session without management present during their regularly scheduled in-person board and committee meetings, and on an as-needed basis during telephonic and special meetings. John Lundgren, our Lead Independent Director, presides over executive sessions of the Board and the committee chairs, each of whom is independent, preside over executive sessions of the committees.

Limitation on Other Board and Audit Committee Service

In response to market trends, in 2019, the Board reduced the number of outside boards on which directors may serve. The Board also applied limits to executive officers of publicly-traded companies, in addition to CEOs. Our Corporate Governance Guidelines establish the following limits on our directors serving on publicly-traded company boards and audit committees:

 

Director Category   

Limit on publicly-traded board and

committee service, including Visa

All directors

         4 boards

Directors who are executives of a publicly-traded company

         2 boards

Directors who serve on our Audit and Risk Committee

         3 audit committees

The Nominating and Corporate Governance Committee may grant exceptions to the limits on a case-by-case basis after taking into consideration the facts and circumstances of the request. The Guidelines provide that prior to accepting an invitation to serve on the board or audit committee of another publicly-traded company, a director should advise the Chair of the Board and the Nominating and Corporate Governance Committee of the invitation so that the Board, through the Nominating and Corporate Governance Committee, has the opportunity to review the director’s ability to continue to fulfill his or her responsibilities as a member of the Company’s Board or Audit and Risk Committee. When reviewing such a request, the Nominating and Corporate Governance Committee may consider a number of factors, including the director’s other time commitments, record of attendance at board and committee meetings, potential conflicts of interest and other legal considerations, and the impact of the proposed directorship or audit committee service on the director’s availability.

Mr. Carney serves as chief executive officer of ChaSerg Technology Acquisition Corp., a special purpose acquisition company (SPAC). He is not considered an executive of a publicly-traded company for purposes of the Board’s policy limiting service on other public company boards given that service as a chief executive officer of a SPAC does not have the same demands as being an executive officer of a typical publicly-traded company. ChaSerg Technology Acquisition Corp. recently announced a definitive merger agreement with another company. Mr. Carney expects to step down from this role following the closing of the merger, which is subject to approval by stockholders and certain other conditions, and is expected to close in the first quarter of 2020.

Management Development and Succession Planning

Our Board believes that one of its primary responsibilities is to oversee the development and retention of executive talent and to ensure that an appropriate succession plan is in place for our Chief Executive Officer and other members of management. Each quarter, the Nominating and Corporate Governance Committee meets with our Executive Vice President, Human Resources and other executives to discuss management succession and development planning and to address potential vacancies in senior leadership. The Nominating and Corporate Governance Committee also annually reviews with the Board succession planning for our Chief Executive Officer.

 

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The Board of Directors’ Role in Risk Oversight

Our Board recognizes the importance of effective risk oversight in running a successful business and in fulfilling its fiduciary responsibilities to Visa and its stockholders. While the Chief Executive Officer, Chief Risk Officer, General Counsel, Vice Chairman and Chief Financial Officer, President, Technology and other members of our senior leadership team are responsible for the day-to-day management of risk, our Board is responsible for promoting an appropriate culture of risk management within the Company and for setting the right “tone at the top,” overseeing our aggregate risk profile and monitoring how the Company addresses specific risks, such as strategic and competitive risks, financial risks, brand and reputation risks, cybersecurity and technology risks, legal and compliance risks, regulatory risks and operational risks.

 

 

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Audit and Risk Committee

 

Oversees risks related to our enterprise risk framework and programs, including:

 

•  financial statements, financial reporting and internal controls

 

•  legal and regulatory

 

•  key operational risks

 

•  technology, including information security and cybersecurity

 

•  data privacy, including GDPR

 

•  compliance and ethics program, including AML and sanctions; and

 

•  business continuity plan

 

 

    

Compensation Committee

 

Oversees risks related to employees and compensation, including:

 

•  our compensation policies and practices for all employees; and

 

•  our incentive and equity- based compensation plans

 

For additional information regarding the Compensation Committee’s review of compensation-related risk, please see the section entitled Risk Assessment of Compensation Programs.

 

    

Finance Committee

 

Oversees risks related to mergers and acquisitions and certain financial matters, including:

 

•  capital investments

 

•  debt

 

•  credit and liquidity

 

•  capital structure; and

 

•  tax strategy

 

    

Nominating and Corporate Governance Committee

 

Oversees risks related to our overall corporate governance, including:

 

•  board effectiveness

 

•  board and committee composition

 

•  board size and structure

 

•  director independence

 

•  board succession

 

•  senior management succession

 

•  our corporate responsibility, sustainability and philanthropy; and

 

•  political participation and contributions

 

In addition, each of the Committees meet in executive session with management to discuss our risk profile and risk exposures. For example, the Audit and Risk Committee meets regularly with our Chief Financial Officer, General Counsel, Chief Risk Officer, Chief Auditor and other members of senior management to discuss our major risk exposures and other programs.

 

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Stockholder Engagement on Corporate Governance, Corporate Responsibility and Executive Compensation Matters

Our Board and management team greatly value the opinions and feedback of our stockholders, which is why we have proactive, ongoing engagement with our stockholders throughout the year focused on corporate governance, corporate responsibility and executive compensation, in addition to the ongoing dialogue among our stockholders and our Chairman and Chief Executive Officer, Vice Chairman and Chief Financial Officer and Investor Relations team on Visa’s financial and strategic performance. Our Lead Independent Director and Chairman and Chief Executive Officer met with several of our investors this year to discuss corporate governance, corporate responsibility and executive compensation matters.

 

 

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Prior to Annual Meeting

 

•  We reach out to our top 50 investors to discuss corporate governance, corporate responsibility and executive compensation matters, and solicit feedback.

 

•  Our Board is provided with our stockholders’ feedback for consideration.

 

•  Board and management discuss feedback and whether action should be taken.

 

•  Disclosure enhancements are considered.

 

•  We review vote proposals and solicit support for Board recommendations on management and stockholder proposals.

 

 

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Annual Meeting of Stockholders

 

Our stockholders vote on election of directors, executive compensation, ratification of our auditors and other management and stockholder proposals.

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Post Annual Meeting

 

•  Our Board and management review the vote results from our annual meeting.

 

•  Board and management discuss vote results and whether action should be taken.

 

•  We start preparing our agenda for our next proxy season outreach.

 

 

Feedback was positive overall with many investors expressing appreciation for the increased transparency in our disclosures on corporate governance, executive compensation and corporate responsibility matters. Topics covered during our discussions with investors included:

 

   

board leadership

 

   

board composition, including diversity and skills criteria

 

   

board risk oversight, including cybersecurity and privacy

 

   

our executive compensation program and philosophy

 

   

corporate responsibility and sustainability, including human capital management

A summary of the feedback we received was discussed and considered by the Board, and enhancements have been made to our disclosures to improve transparency in these areas.

Stockholders and other interested parties who wish to communicate with us on these or other matters may contact our Corporate Secretary electronically at corporatesecretary@visa.com or by mail at Visa Inc., P.O. Box 193243, San Francisco, CA 94119.

 

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Communicating with the Board of Directors

Our Board has adopted a process by which stockholders or other interested persons may communicate with the Board or any of its members. Stockholders and other interested parties may send communications in writing to any or all directors (including the Chair or the non-employee directors as a group) electronically to board@visa.com or by mail c/o our Corporate Secretary, Visa Inc., P.O. Box 193243, San Francisco, CA 94119. Communications that meet the procedural and substantive requirements of the process approved by the Board will be delivered to the specified member of the Board, non-employee directors as a group or all members of the Board, as applicable, on a periodic basis, which generally will be in advance of or at each regularly scheduled meeting of the Board. Communications of a more urgent nature will be referred to the General Counsel, who will determine whether it should be delivered more promptly. Additional information regarding the procedural and substantive requirements for communicating with our Board may be found on our website at http://investor.visa.com, under “Corporate Governance – Contact the Board.”

All communications involving accounting, internal accounting controls, and auditing matters, possible violations of, or non-compliance with, applicable legal and regulatory requirements or the Codes, or retaliatory acts against anyone who makes such a complaint or assists in the investigation of such a complaint, may be made via email to businessconduct@visa.com; through our Confidential Compliance Hotline at (888) 289-9322 or our Confidential Online Compliance Hotline at https://visa.alertline.com; or by mail to Visa Inc., Business Conduct Office, P.O. Box 193243, San Francisco, CA 94119. All such communications will be handled in accordance with our Whistleblower Policy, a copy of which may be obtained by contacting our Corporate Secretary.

Attendance at Board, Committee and Annual Stockholder Meetings

Our Board and its committees meet throughout the year on a set schedule, hold special meetings as needed, and act by written consent from time to time. The Board met 13 times during fiscal year 2019. Each director attended at least 75% or more of the aggregate of: (i) the total number of meetings of the Board held during the period in fiscal year 2019 for which he or she served as a director, and (ii) the total number of meetings held by all committees of the Board on which such director served as a member during the period in fiscal year 2019. The total number of meetings held by each committee is listed below, under the heading Committees of the Board of Directors. It is our policy that all members of the Board should endeavor to attend the annual meeting of stockholders. All ten of our then directors attended the 2019 Annual Meeting of Stockholders. Mr. Laguarta joined the Board in November 2019 and, therefore, did not attend the 2019 Annual Meeting.

Codes of Conduct and Ethics

Our Board has adopted a Code of Business Conduct and Ethics, which applies to all directors, officers, employees and contingent staff of the Company. This Code includes a supplemental Code of Ethics for Certain Executives and Financial Officers, which applies to our Chief Executive Officer, Chief Financial Officer, Controller, General Counsel and other senior financial officers, whom we refer to collectively as senior officers. These Codes require the senior officers to engage in honest and ethical conduct in performing their duties, provide guidelines for the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, and provide mechanisms to report unethical conduct. Our senior officers are held accountable for their adherence to the Codes. If we amend or grant any waiver from a provision of our Codes for officers or directors, we will publicly disclose such amendment or waiver in accordance with and if required by applicable law, including by posting such amendment or waiver on our website at http://investor.visa.com or by filing a current report on Form 8-K with the Securities and Exchange Commission (SEC).

Political Engagement and Disclosure

Public sector decisions significantly affect our business and industry, as well as the communities in which we operate. For this reason, we participate in the political process through regular and constructive engagement with government officials and policy-makers, by encouraging the civic involvement of our employees, and by

 

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contributing to candidates and political organizations where permitted by applicable law. We are committed to conducting these activities in a transparent manner that reflects responsible corporate citizenship and best serves the interests of our stockholders, employees, and other stakeholders. Additional information regarding our political activities and oversight may be found at https://usa.visa.com/about-visa/operating-responsibly.html.

Visa has a Political Participation, Lobbying and Contributions Policy (the “Policy”) that prohibits our directors, officers and employees from using Company resources to promote their personal political views, causes or candidates, and specifies that the Company will not directly or indirectly reimburse any personal political contributions or expenses. Directors, officers and employees also may not lobby government officials on the Company’s behalf absent the pre-approval of the Company’s Global Government Engagement department. As such, our lobbying and political spending seek to promote the interests of the Company and its stockholders, and not the personal political preferences of our directors or executives.

Under the Policy, the Nominating and Corporate Governance Committee must pre-approve the use of corporate funds for political contributions, including contributions made to trade associations to support targeted political campaigns and contributions to organizations registered under Section 527 of the U.S. Internal Revenue Code to support political activities. The Policy further requires the Company to make reasonable efforts to obtain from U.S. trade associations whose annual membership dues exceed $25,000 the portion of such dues that are used for political contributions. This information must then be included in the annual contributions report that is posted on our website.

We endeavor to maintain a healthy and transparent relationship with governments around the world by communicating our views and concerns to elected officials and policy-makers. As an industry leader, we encounter challenges and opportunities on a wide range of policy matters. These issues may include regulations and policies on interchange fees, cybersecurity, data security, privacy, intellectual property, surcharging, payroll and prepaid cards, mobile payments, tax, international trade and market access, and financial inclusion, among others.

The Nominating and Corporate Governance Committee annually reviews our political contributions and lobbying expenditures, which includes information regarding memberships in, or payments to, tax-exempt organizations that write and endorse model legislation. Additional information on our political contributions and lobbying expenditures can be found on our website, including our annual contributions report and links to our quarterly U.S. federal lobbying activities and expenditures reports.

In 2019, the Center for Political Accountability assessed our disclosures for its annual CPA-Zicklin Index of Corporate Political Disclosure and Accountability, and designated Visa a “trendsetter” (the highest designation in the CPA-Zicklin Index).

Corporate Responsibility and Sustainability

We believe that as a trusted brand in payments, Visa has a tremendous opportunity and responsibility to use our business to connect the world – enabling inclusive and sustainable economic growth and strengthening economies while also helping improve lives and create a better world. We are committed to managing the risks and opportunities that arise from ESG issues.

Integrated Approach

As detailed below, Visa takes an integrated approach to managing ESG performance and transparency, which consists of governance, engagement and reporting on our initiatives.

 

   

Materiality: we conduct formal ESG materiality assessments on a biennial basis to identify the topics most relevant to Visa and our external stakeholders. We organize and calibrate our corporate responsibility and sustainability strategy around these topics.

 

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Governance: individual ESG topic areas are managed at a function level, with responsibility rolling up to executive level oversight; our cross-function Corporate Responsibility & Sustainability Leadership Council serves as a central coordinating body; and the Nominating and Corporate Governance Committee’s charter includes formal responsibility and oversight at the Board of Directors level for corporate responsibility and sustainability.

 

   

Engagement: we regularly engage with our stakeholders to inform our corporate responsibility and sustainability priorities, including dialogue with employees, clients, shareholders, policymakers and third-party organizations.

 

   

Reporting: we are committed to operating with transparency, including through our annual Visa Corporate Responsibility and Sustainability Report as well as additional ESG disclosures and submissions.

Key Focus Areas of ESG Strategy and Recent Progress

Strategy focuses on priority issues in four areas. Each informed by materiality assessment and stakeholder engagement.

 

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 Increased our financial empowerment focus on micro and small businesses (MSB) via programs and partnerships

 

 Promoted financial inclusion through core products and solutions

 

 Helped unbanked individuals access electronic payments accounts – now reaching 396 million toward our 2015 goal of 500 million by 2020

 

 Expanded our women’s empowerment initiatives, including She’s Next, Visa Everywhere Initiative: Global Women’s Edition and Money is Changing

 

  Provided support during times of humanitarian crisis

 

 

 Expanded the Visa Token Service (VTS) to better protect consumers’ sensitive information from fraud

 

 Received the highest rating in our sector from Gartner Consulting during our 2019 Cybersecurity program review

 

  Continued implementation of the EU General Data Protection Regulation (GDPR) and prepared for other pending privacy regulations

 

 

 Expanded Visa University, our signature global learning platform

 

 Bolstered leadership development programs for female employees, for African American/Black and Hispanic/Latinx employees, and continued Ready to Return, a program for professionals returning to the workforce after family-related leave

 

 Created a global Gender Inclusion Council, composed of 20 Visa leaders

 

 Evolved our benefits programs to meet our employees’ needs, providing comprehensive health, financial wellness and quality-of-life coverage

 

 

 Reduced our direct greenhouse gas emissions by 5 percent year-over-year from 2017

 

 Progressed towards our goal to source 100 percent renewable electricity for our offices and data centers by the end of 2019

 

 Implemented Supplier Code of Conduct and expanded Supplier Diversity program

 

 

 

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Third Party Recognition of our Progress

We continued to receive recognition of our ESG leadership by third-party organizations:

 

   

Dow Jones Sustainability North America Index – In 2019, placed on DJSI for third consecutive year

 

   

FTSE4Good Index – Continued to be named to this Index

 

   

MSCI – Maintained “A” rating

 

   

Sustainalytics – Outperformer, Software and Services sector

 

   

JUST Capital – #38 on “America’s Most Just 100 Companies” and #1 of Consumer & Diversified Finance companies in 2019

 

   

100 Best Corporate Citizens 2019 – Ranked #33

 

   

World’s Most Ethical Companies – Named for the seventh consecutive time in 2019

 

   

Best Compliance and Ethics Program – Winner of Corporate Secretary magazine’s “Best Compliance and Ethics Program (Large cap company)” award in both 2017 and 2018

 

   

Forbes’ Global 2000 Best Regarded Companies 2019 – Ranked #1

We encourage you to read more about how we are working to build a connected world and a better future for everyone, everywhere on our website and in our 2018 Corporate Responsibility & Sustainability Report. Our 2018 Corporate Responsibility & Sustainability Report is not part of or incorporated by reference into this proxy statement.

 

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COMMITTEES OF THE BOARD OF DIRECTORS

The current standing committees of the Board are the Audit and Risk Committee, the Compensation Committee, the Finance Committee, and the Nominating and Corporate Governance Committee. Each of the standing committees operates pursuant to a written charter, which are available on the Investor Relations page of our website at http://investor.visa.com under “Corporate Governance – Committee Composition.”

 

   

Audit and Risk Committee

 

    
         
         
         

 

  Committee members:

  Lloyd A. Carney*, Chair

  Mary B Cranston*

  Ramon Laguarta (effective November 20,   2019)

  Denise M. Morrison*

  John A. C. Swainson*

 

      * Audit Committee Financial Expert

 

  Number of meetings in
  fiscal year 2019: 7

 

 

    

“In my new role as Chair of the Audit and Risk Committee, I worked closely with Mary Cranston to ensure a smooth transition of chair responsibilities as we continue to oversee the Company’s key risks including technology, cybersecurity, legal and regulatory, data privacy and financial reporting.”

 

– Lloyd A. Carney, Chair

 

 

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Key Activities in 2019

 

 

Monitored the integrity of our financial statements, our compliance with legal and regulatory requirements, our internal control over financial reporting and the performance of our internal audit function and KPMG, our independent registered public accounting firm;

 

Discussed the qualifications and independence of KPMG and recommended their re-appointment for FY2019;

 

Selected, approved the compensation of, and oversaw the work of KPMG, including the scope of and plans for the audit for FY2020;

 

Reviewed and discussed with management the disclosures required to be included in our annual report on Form 10-K and our quarterly reports on Form 10-Q, including the Company’s significant accounting policies, and areas subject to significant judgment and estimates;

 

Discussed with KPMG their critical audit matters;

 

Approved fees for KPMG for FY2019 and all audit, audit-related and non-audit fees and services consistent with our pre-approval policy;

 

On a quarterly basis, reviewed audit results and findings prepared by internal audit;

 

Reviewed and recommended the Board approve amendments to our Audit and Risk Committee charter and Code of Business Conduct and Ethics;

 

Monitored compliance with our Code of Business Conduct and Ethics, and reviewed the implementation and effectiveness of the Company’s compliance and ethics program;

 

Reviewed and discussed with management the Company’s financial risks, top risks and other risk exposures and the steps taken to monitor and control those exposures, including our enterprise risk framework and programs;

 

Monitored the Company’s technology risks, including business continuity, privacy and data protection, and cybersecurity;

 

Reviewed and approved the FY2019 Global Business Continuity Program plan, Risk Appetite Framework, the FY2019 internal audit plan and the Internal Audit Charter;

 

Reviewed and approved our Related Person Transactions Policy; and

 

Reviewed and approved the Company’s Whistleblower Policy, procedures for the receipt, retention and treatment of complaints we receive including regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

 

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Certain Relationships and Related Person Transactions

The Audit and Risk Committee has adopted a written Statement of Policy with respect to Related Person Transactions (the “Statement of Policy”), governing any transaction, arrangement or relationship between the Company and any related person where the aggregate amount involved will or may be expected to exceed $120,000 and any related person had, has or will have a direct or indirect material interest. Under the Statement of Policy, the Audit and Risk Committee reviews related person transactions and may approve or ratify them only if it is determined that they are in, or not inconsistent with, the best interests of the Company and its stockholders. When reviewing a related person transaction, the Audit and Risk Committee may take into consideration all of the relevant facts and circumstances available to it, including: (i) the material terms and conditions of the transaction or transactions; (ii) the related person’s relationship to Visa; (iii) the related person’s interest in the transaction, including their position or relationship with, or ownership of, any entity that is a party to or has an interest in the transaction; (iv) the approximate dollar value of the transaction; (v) the availability from other sources of comparable products or services; and (vi) an assessment of whether the transaction is on terms that are comparable to the terms available to us from an unrelated third party.

In the event we become aware of a related person transaction that was not previously approved or ratified under the Statement of Policy, the Audit and Risk Committee will evaluate all options available, including ratification, revision or termination of the related person transaction. The Statement of Policy is intended to augment and work in conjunction with our other policies that include code of conduct or conflict of interest provisions, including our Code of Business Conduct and Ethics.

We engage in transactions, arrangements and relationships with many other entities, including financial institutions and professional organizations, in the ordinary course of our business. Some of our directors, executive officers, greater than five percent stockholders and their immediate family members, each a related person under the Statement of Policy, may be directors, officers, partners, employees or stockholders of these entities. We carry out transactions with these entities on customary terms, and, in many instances, our directors and executive officers may not be aware of them. To our knowledge, since the beginning of fiscal year 2019, no related person has had a material interest in any of our business transactions or relationships.

 

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Report of the Audit and Risk Committee

The Committee, composed of independent directors, is responsible for monitoring and overseeing Visa’s financial reporting process on behalf of the Board. The functions of the Committee are described in greater detail in the Audit and Risk Committee Charter, adopted by the Board, which may be found on the Company’s website at http://investor.visa.com under “Corporate Governance – Committee Composition.” Visa’s management has the primary responsibility for establishing and maintaining adequate internal financial controls, for preparing the financial statements, and for the public reporting process. KPMG LLP, Visa’s independent registered public accounting firm, is responsible for expressing opinions on the conformity of the Company’s audited financial statements with accounting principles generally accepted in the United States of America, and on the Company’s internal control over financial reporting.

In this context, the Committee has reviewed and discussed with management the Company’s audited consolidated financial statements for the fiscal year ended September 30, 2019. In addition, the Committee has discussed with KPMG the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the Securities and Exchange Commission.

The Committee also has received the written disclosures and the letter from KPMG required by the applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the audit committee concerning independence, and the Committee has discussed the independence of KPMG with that firm. The Committee also has considered whether KPMG’s provision of non-audit services to the Company impairs the auditor’s independence, and concluded that KPMG is independent from the Committee and the Company’s management.

Based on the Committee’s review and discussions noted above, the Committee recommended to the Board that the Company’s audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2019, for filing with the Securities and Exchange Commission.

Audit and Risk Committee of the Board of Directors

Lloyd A. Carney (Chair)

Mary B. Cranston

Denise M. Morrison

John A. C. Swainson

 

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Compensation Committee

 

    
       
       
       

 

  Committee members:

Francisco Javier Fernández-Carbajal

      Suzanne Nora Johnson, Chair

      Robert W. Matschullat

      Denise M. Morrison

      Maynard G. Webb, Jr.

 

  Number of meetings in

  fiscal year 2019: 7

 

  

“The Committee remains committed to a philosophy of pay for performance and the alignment of compensation with stockholders’ interests. We prioritize variable over fixed pay and employ multiple performance measures, compensation types, and measurement periods to support stockholder value creation while avoiding undue risk.”

 

– Suzanne Nora Johnson, Chair

 

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Key Activities in 2019

 

 

Reviewed the overall executive compensation philosophy for the Company;

 

Reviewed and approved corporate goals and objectives relevant to our Chief Executive Officer’s and other named executive officers’ compensation, including annual performance objectives;

 

Evaluated the performance of our Chief Executive Officer and other named executive officers in light of the corporate goals and objectives and, based on such evaluation, determined, approved and reported to the Board the annual compensation of our Chief Executive Officer and other named executive officers, including salary, bonus, equity and other benefits;

 

Reviewed and recommended to the independent members of the Board the form and amount of compensation of our directors;

 

Oversaw administration and regulatory compliance with regard to the Company’s incentive and equity-based compensation plans;

 

Reviewed the operations of the Company’s executive compensation programs to determine whether they are properly coordinated and achieving their intended purposes;

 

Reviewed an annual compensation-risk assessment report and considered whether the Company’s compensation policies and practices contain incentives for executive officers and employees to take risks in performing their duties that are reasonably likely to have a material adverse effect on the Company;

 

Reviewed the Company’s stock ownership guidelines for directors and named executive officers, as well as individual compliance;

 

Reviewed and discussed with management the compensation disclosures required to be included in the Company’s annual filings;

 

Oversaw the Company’s submissions to a stockholder vote on executive compensation matters, including the advisory vote on executive compensation (“Say-on-Pay”);

 

Reviewed the results of stockholder votes on executive compensation matters and discussed with management the appropriate engagement with stockholders in response to the votes;

 

Reviewed the appropriateness of the Company’s peer group;

 

Reviewed the Company’s programs and practices related to executive workforce diversity and the administration of executive compensation programs in a non-discriminatory manner; and

 

Received and reviewed updates on regulatory and compensation trends and compliance.

 

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Compensation Committee Interlocks and Insider Participation

None of the members who served on the Compensation Committee (Suzanne Nora Johnson, Francisco Javier Fernández-Carbajal, Robert W. Matschullat (since January 25, 2019), Denise M. Morrison (since October 1, 2019), John A. C. Swainson (until January 25, 2019), and Maynard G. Webb, Jr.) was or had ever been one of our officers or employees. In addition, during the last fiscal year, none of our executive officers served as a member of the board of directors or the compensation committee of any other entity that has one or more executive officers serving on our Board or Compensation Committee.

Risk Assessment of Compensation Programs

The Compensation Committee annually considers potential risks when reviewing and approving our compensation programs. We have designed our compensation programs, including our incentive compensation plans, with specific features to address potential risks while rewarding employees for achieving long-term financial and strategic objectives through prudent business judgment and appropriate risk-taking. The following elements have been incorporated in our compensation programs for executive officers:

 

LOGO

 

     

LOGO

 

     

LOGO

 

     

A Balanced Mix of Compensation Elements

 

•  The compensation mix for our executive officers is composed of salary, annual cash incentives and long-term equity incentives, representing a mix that is not overly weighted toward short-term cash incentives.

 

 

     

Multiple Performance Factors

 

•  Our incentive compensation plans use Company-wide metrics and individual performance goals, which encourage the achievement of objectives for the overall benefit of the Company.

 

•  Annual cash incentive awards depend on multiple performance metrics including Net Income Growth and Net Revenue Growth, both as adjusted for unusual or non-recurring items, as well as individual goals related to specific strategic or operational objectives.

 

•  Long-term equity incentives depend on Earnings Per Share (as adjusted for unusual or non-recurring items) and relative Total Shareholder Return.

 

 

     

Long-Term Incentives

 

•   Our long-term incentives are equity-based and generally have a three-year vesting schedule to complement our annual cash-based incentives.

 

 

 

LOGO

 

     

LOGO

 

     

LOGO

 

     

Capped Incentive Awards

 

•   Annual incentive awards and performance share awards are capped at 200% of target for executive officers.

 

 

     

Stock Ownership Guidelines

 

•   Our guidelines call for significant stock ownership, which aligns the interests of our executive officers with the long-term interests of our stockholders.

 

     

Clawback Policy

 

•   Our Clawback Policy authorizes the Board to recoup past incentive compensation in the event of a material restatement of the Company’s financial results due to fraud, intentional misconduct or gross negligence of the executive officer.

 

 

Additionally, the Compensation Committee annually considers an assessment of compensation-related risks for all of our employees. Based on this assessment, the Compensation Committee concluded that our compensation programs do not create risks that are reasonably likely to have a material adverse effect on Visa. In making this determination, the Compensation Committee reviewed the key design elements of our compensation programs in

 

27


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relation to industry “best practices” as presented by Frederic W. Cook & Co. (FW Cook), the Compensation Committee’s independent compensation consultant, as well as the means of mitigating potential risks, such as through our internal controls and oversight by management and the Board. In addition, management completed an inventory of incentive programs below the executive level and reviewed the design of these incentives both internally and with FW Cook to conclude that such programs do not encourage excessive risk-taking.

 

 

Compensation Committee Report

 

The Compensation Committee has:

 

•   reviewed and discussed the section entitled Compensation Discussion and Analysis with management; and

 

•   based on this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis section be included in this proxy statement.

 

COMPENSATION COMMITTEE

 

Suzanne Nora Johnson (Chair)

Francisco Javier Fernández-Carbajal

Robert W. Matschullat

Denise M. Morrison

Maynard G. Webb, Jr.

 

 
   

Finance Committee

 

    
         
         
         

 

  Committee members:

  Francisco Javier Fernández-Carbajal

  Robert W. Matschullat, Chair

  Denise Morrison (until October 1, 2019)

  Maynard G. Webb, Jr.

 

  Number of meetings in
  fiscal year 2019: 6

 

    

“The newly-formed Committee was active in its first year, reviewing several potential M&A transactions and strategic investments, in addition to discussing Visa’s capital structure, financial condition, capital investments, treasury activities, and tax strategy.”

 

– Robert W. Matschullat, Chair

 

 

LOGO

 

  

Key Activities in 2019

 

 

Reviewed several potential M&A transactions and strategic investments, including recommending or approving the acquisitions of Earthport, Payworks and Verifi that each closed in FY19, and the token services business of Rambus that closed in October;

 

Reviewed and recommended the company’s quarterly dividend and an $8.5 billion increase to the Class A share buyback program;

 

Reviewed the company’s capital structure and financial condition, including target leverage ratio and credit ratings;

 

Discussed the company’s tax strategy following U.S. tax reform;

 

Reviewed insurance coverage and programs;

 

Discussed the company’s treasury activities and strategy; and

 

Reviewed potential capital investments in advance of FY20 budget approval.

 

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Table of Contents
   

Nominating and Corporate Governance Committee

 

    
         

 

  Committee members:

  Mary B. Cranston

  Ramon Laguarta

  John F. Lundgren

  Suzanne Nora Johnson

  John A. C. Swainson, Chair

 

  Number of meetings in
  fiscal year 2019: 4

 

    

 

“In 2019, we focused on board leadership and our committee structure, resulting in a combined Chair/CEO role, robust Lead Independent Director duties and refreshed composition for our board committees.”

 

– John A. C. Swainson, Chair

 

 

LOGO

  

Key Activities in 2019

 

 

Recommended the formation of a Finance Committee to have oversight of certain financial matters, capital allocation and investments; dividends and stock repurchase programs; mergers and acquisitions; debt, credit facilities, financings and capital structure; and other tax and treasury matters, which the Board approved to be effective January 1, 2019;

 

Identified, selected and recommended a new director, Ramon Laguarta, to serve as a member of the Board, Audit and Risk Committee and Nominating and Corporate Governance Committee, effective November 20, 2019;

 

Recommended to the Board changes to the leadership of the Board’s committees, which resulted in rotating the Audit and Risk Committee Chair;

 

Reviewed the criteria used to identify individuals qualified to become directors to ensure it aligns with our current business needs and long-term strategy;

 

Regularly discussed board composition and reviewed director candidates in light of our director qualification criteria, current business needs and long-term strategy;

 

Reviewed and recommended updates to the Company’s governance practices and policies, which were approved by the Board, including

   

Bylaws, which were revised to move the description of the Lead Director’s responsibilities to the Corporate Governance Guidelines;

   

Corporate Governance Guidelines, which were revised to (i) include robust Lead Director duties; (ii) disclose a current practice that the Committee considers women and minority candidates in the pool from which the Committee considers director candidates; and (iii) reduce the number of publicly-traded boards our directors may serve on in addition to our Board; and

   

Nominating and Corporate Governance Committee Charter, which was revised to disclose the Committee’s current practice of considering women and minority candidates in the pool from which the Committee considers director candidates; and clarify that the Committee’s authority to obtain resources is not limited to search firms.

 

Reaffirmed the Board’s categorical director independence standards, and reviewed the qualifications and determined the independence of the members of the Board and its committees;

 

Reviewed each director’s compliance with the requirements of the Corporate Governance Guidelines relating to service on other boards or audit committees of publicly-traded companies;

 

Reviewed succession and development plans for management, including the succession plan for the Chief Executive Officer in the event of an emergency or retirement;

 

Oversaw the annual evaluation of the Board, its committees and directors;

 

Oversaw our stockholder engagement program on corporate governance, corporate responsibility and executive compensation matters;

 

Reviewed and approved the 2019 corporate political contribution plan, and oversaw the Company’s political contributions and lobbying activities; and

 

Reviewed corporate responsibility and sustainability developments and oversaw the Company’s charitable giving.

 

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Table of Contents

Process for Nomination of Director Candidates

The Nominating and Corporate Governance Committee regularly reviews the composition of the Board, including the qualifications, expertise and characteristics that are represented in the current Board as well as the criteria it considers needed to support Visa’s long-term strategy. After an in-depth review of the candidates, the Nominating and Corporate Governance Committee recommends candidates to the Board in accordance with its charter, our Certificate of Incorporation and Bylaws, our Corporate Governance Guidelines and the criteria adopted by the Board regarding director candidate qualifications. After careful review and consideration, the Board will nominate candidates for election, or re-election, at our annual meeting of stockholders. The Board may appoint a director to the Board during the course of the year to serve until the next meeting of stockholders.

 

   

 

Sources for
Candidate Pool

 

         

 

In-Depth
Review

         

 

Full Board
Review

         

 

Board
Nominates

       
   

   Independent directors

 

   Independent search firm

 

   Our management

 

   Stockholders

    u    

   Consider skills matrix

 

   Consider diversity

 

   Review independence and potential conflicts

 

For New Candidates:

 

   Screen qualifications

 

   Meet with our directors

   

u

    Review selected candidates for election / appointment at recommendation by NCGC    

u

    Candidates for election to Board at Annual Meeting of Stockholders / appoints to Board during the year    

u

  LOGO
                                                                         

Stockholder Recommended Candidates

Stockholders may recommend a director candidate to be considered for nomination by the Nominating and Corporate Governance Committee by providing the information specified in our Corporate Governance Guidelines to our Corporate Secretary within the timeframe specified for stockholder nominations of directors in our Bylaws. For additional information regarding the process for proposing director candidates to the Nominating and Corporate Governance Committee for consideration, please see our Corporate Governance Guidelines. Stockholders who wish to nominate a person for election as a director at an annual meeting of stockholders must follow the procedure described under the heading Other Information – Stockholder Nomination of Director Candidates and Other Stockholder Proposals for 2021 Annual Meeting on page 98 of this proxy statement. For additional information regarding this process, please see our Bylaws.

 

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Criteria for Nomination to the Board of Directors and Diversity

The Nominating and Corporate Governance Committee applies the same standards in considering director candidates submitted by stockholders as it does in evaluating other candidates, including incumbent directors. The identification and selection of qualified directors is a complex and subjective process that requires consideration of many intangible factors, and will be significantly influenced by the particular needs of the Board from time to time. As a result, there is no specific set of minimum qualifications, qualities or skills that are necessary for a nominee to possess, other than those that are necessary to meet U.S. legal, regulatory and NYSE listing requirements and the provisions of our Certificate of Incorporation, Bylaws, Corporate Governance Guidelines and charters of the Board’s committees. However, the Nominating and Corporate Governance Committee and the Board have identified the ten skills and qualifications listed below as important criteria for membership on the Visa Board.

 

 
 
LOGO   LOGO   LOGO   LOGO   LOGO
Payments   Technology   Senior
Leadership
 

Public Company

Boards

  Financial
 
 
LOGO   LOGO   LOGO   LOGO   LOGO

Global

Markets

 

Marketing |

Brand

  Risk  

Government |

Geo-political

  E-Commerce | Mobile
 
 

In addition to the above qualities, the Board, through the Nominating and Corporate Governance Committee, strives to be a board which reflects the diversity of our key constituencies around the world (clients, customers, employees, business partners and stockholders). While the Board does not have a formal policy on diversity, in assembling our Board, our objective is to have wide diversity in terms of business experiences, functional skills, gender, race, ethnicity, and cultural backgrounds. To support this objective, the Nominating and Corporate Governance Committee considers women and minority candidates in the pool from which the Nominating and Corporate Governance Committee considers director candidates.

 

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Table of Contents

COMPENSATION OF NON-EMPLOYEE DIRECTORS

We compensate non-employee directors for their service on the Board with a combination of cash and equity awards, the amounts of which are commensurate with their role and involvement, and consistent with peer company practices. In setting director compensation, we consider the significant amount of time our directors expend in fulfilling their duties as well as the skill level required of members of our Board. We intend to compensate our non-employee directors in a way that is competitive, attracts and retains a high caliber of directors, and aligns their interests with those of our stockholders. Mr. Kelly, our Chairman and Chief Executive Officer, does not receive additional compensation for his service as a director.

The Compensation Committee, which is composed solely of independent directors, has the primary responsibility for reviewing and considering any revisions to our director compensation program. The Compensation Committee undertook its annual review of the type and form of compensation paid to our non-employee directors in connection with their service on the Board and its committees for fiscal year 2019. The Compensation Committee considered the results of an independent analysis completed by FW Cook. As part of this analysis, FW Cook reviewed non-employee director compensation trends and data from companies comprising the same compensation peer group used by the Compensation Committee in connection with its review of executive compensation. Pursuant to this compensation review process, and after considering FW Cook’s advice on industry best practice regarding timing of equity grants, the Compensation Committee approved a change in the grant date of equity awards for non-employee directors from November 19th to the date of our Annual Meeting of Stockholders, effective as of January 29, 2019. The Compensation Committee also reviewed peer group data and FW Cook’s advice on equity grant values and the desire to provide compensation that is weighted more to equity-based compensation rather than cash in order to further align the interests of the non-employee directors with those of our stockholders. After considering such advice, and to keep the non-employee director compensation consistent with the median of our peer group, the Compensation Committee approved an increase in the grant date value of the annual equity grant for non-employee directors to $200,000 for grants made on or after October 1, 2018. In addition, following the appointment of John F. Lundgren as Lead Independent Director as of April 16, 2019, the Compensation Committee reviewed FW Cook’s advice, including peer group data and the substantive role of the Lead Independent Director, and approved an annual retainer of $75,000 for the Lead Independent Director, effective as of July 1, 2019.

Highlights of our Non-Employee Director Compensation Program

AMONG THE HIGHLIGHTS OF OUR PROGRAM ARE:

 

 

 

LOGO

 

 

No Fees for Board Meeting Attendance: No fees are paid for board meeting attendance.

 

LOGO

 

 

 

Emphasis on Equity: There is an emphasis on equity in the overall compensation mix to further align interests with stockholders.

 

LOGO

 

 

Recognition of Special Roles: Special roles (such as Lead Independent Director and Committee Chairs) are fairly recognized for their additional time commitments.

 

LOGO

 

 

Formulaic Annual Equity Grants with Immediate Vesting: Annual restricted stock units are granted under a fixed-value formula with immediate vesting to support independence.

 

LOGO

 

 

Robust Stock Ownership Guidelines: A robust stock ownership guideline of five times the annual board membership cash retainer supports alignment with stockholders’ interests.

 

LOGO

 

 

 

 

Limited Perquisites and No Related Tax Gross-Ups: Other benefits are limited (e.g., matching charitable contributions).

 

 

 

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Table of Contents

Annual Retainers Paid in Cash

Each non-employee director receives an annual cash retainer for his or her service on the Board, as well as additional cash retainers if he or she serves as the Lead Independent Director, on a committee or as the chair of a committee. The following table lists the cash retainer amounts in effect during fiscal year 2019.

 

  Type of Retainer    Amount of Retainer

 

  Annual Board Membership

 

   $105,000

 

  Independent Chair

 

  

 

$185,000

 

  Lead Independent Director

 

  

 

$75,000

 

 

  Audit and Risk Committee Membership

 

  

 

$20,000

 

 

  Compensation Committee Membership

 

  

 

$10,000

 

 

  Finance Committee Membership

 

  

 

$10,000

 

 

  Nominating and Corporate Governance Committee Membership

 

  

 

$10,000

 

 

  Audit and Risk Committee Chair

 

  

 

$25,000

(in addition to member retainer)

 

  Compensation Committee Chair

 

  

 

$20,000

(in addition to member retainer)

 

  Finance Committee Chair

 

  

 

$20,000

(in addition to member retainer)

 

  Nominating and Corporate Governance Committee Chair

 

  

 

$20,000

(in addition to member retainer)

 

 

U.S.-based directors may defer the payment of all or a portion of the cash retainer payments. All cash retainers are paid in quarterly installments throughout the year unless a director elected to defer the payment. Directors are also reimbursed for customary expenses incurred while attending meetings of the Board and its committees.

Equity Compensation

Each non-employee director also receives an annual equity grant under our 2007 Equity Incentive Compensation Plan, as amended and restated, which limits the total grant date value of equity grants that may be made to our non-employee directors to $500,000 in a single fiscal year. In fiscal year 2019, a grant with a grant date value of $200,000 was awarded to each non-employee director on January 29, 2019, the date of our Annual Meeting of Stockholders. Following the date of a director’s election or appointment to the Board on a date other than at an Annual Meeting of Stockholders, the director receives a prorated initial grant based on the partial year of board service. Accordingly, Denise M. Morrison, who was appointed to the board on August 2, 2018, received an additional grant with a grant date value of $100,000 on November 19, 2018. Grants to all non-employee directors were made in the form of restricted stock units, which vest immediately upon grant. Directors may elect to defer settlement of all or a portion of their equity grants.

 

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Stock Ownership Guidelines

The stock ownership guidelines for our non-employee directors specify that each director should own shares of our common stock equal to five times the annual board membership cash retainer. Equity interests that count toward the satisfaction of these guidelines include shares owned outright by the director, shares jointly owned and restricted stock units payable in shares. Directors have five years from the date they become a member of the Board to attain these ownership levels. Each non-employee director with at least five years of service on our Board currently meets or exceeds the ownership guidelines. We also have an insider trading policy which, among other things, prohibits directors from hedging the economic risk of their stock ownership or pledging their shares.

Charitable Matching Gift Program

Our non-employee directors may participate in our Board Charitable Matching Gift Program. Under this program, Visa will match contributions to eligible non-profit organizations, up to a maximum of $15,000 per director per calendar year. Our non-employee directors may also participate in our Political Action Committee (“PAC”) Charitable Matching Program. Under this program, when non-employee directors make a contribution to the Visa PAC, Visa will match their contribution to a qualifying charity or charities the non-employee director selects, up to a maximum of $5,000 per director per calendar year.

Director Compensation Table for Fiscal Year 2019

The following tables provide information on the total compensation earned by each of our non-employee directors who served during fiscal year 2019. Mr. Laguarta was appointed to the Board effective November 20, 2019. As a result, he did not receive director compensation during fiscal year 2019.

 

Name Fees Earned
or Paid in Cash
($)(1)
Stock
Awards
($)(2)
All Other
Compensation
($)(3)
Total
($)

Lloyd A. Carney

 

131,250

 

199,935

 

5,000

 

336,185

Mary B. Cranston

 

148,750

 

199,935

 

20,000

 

368,685

Francisco Javier Fernández-Carbajal

 

125,000

 

199,935

 

15,000

 

339,935

John F. Lundgren

 

143,750

 

199,935

 

5,000

 

348,685

Robert W. Matschullat

 

263,750

 

199,935

 

5,000

 

468,685

Denise M. Morrison(4)

 

125,000

 

299,927

 

5,000

 

429,927

Suzanne Nora Johnson

 

145,000

 

199,935

 

20,000

 

364,935

John A. C. Swainson

 

150,000

 

199,935

 

10,000

 

359,935

Maynard G. Webb, Jr.

 

125,000

 

199,935

 

5,000

 

329,935

 

(1)

Additional information describing these fees is included under the heading Fees Earned or Paid in Cash.

 

(2)

Represents the aggregate grant date fair value of the awards granted to each director computed in accordance with stock-based accounting rules (Financial Standards Accounting Board (“FASB”) ASC Topic 718). Assumptions used in the calculation of these amounts are included in Note 16 – Share-based Compensation to our fiscal year 2019 consolidated financial statements, which are included in our Annual Report on Form 10-K filed with the SEC on November 14, 2019.

 

(3)

Amounts include the matching contributions we made on behalf of our directors for fiscal year 2019 pursuant to our Board Charitable Matching Gift Program in the amount of: $15,000 for each of Ms. Cranston, Mr. Fernández-Carbajal and Ms. Nora Johnson; and $5,000 for Mr. Swainson. The amounts also include the $5,000 matching contributions we made on behalf of each of the following directors for fiscal year 2019 pursuant to our PAC Charitable Matching Program: Mr. Carney, Ms. Cranston, Mr. Lundgren, Mr. Matschullat, Ms. Morrison, Ms. Nora Johnson, Mr. Swainson and Mr. Webb.

 

(4)

Ms. Morrison received an additional prorated stock award for her initial partial year of service as a director for the period from her appointment to the Board on August 2, 2018 through January 29, 2019.

 

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Table of Contents

Fees Earned or Paid in Cash

The following table sets forth additional information with respect to the amounts reported in the “Fees Earned or Paid in Cash” column in the Director Compensation Table above for fiscal year 2019.

 

  Name

Board

Retainer
($)

Independent
Chair/Lead
Independent
Director

Retainer

($)

Audit and

Risk
Committee
Chair/
Member
Retainer

($)

Compensation
Committee
Chair/
Member
Retainer

($)

Finance
Committee
Chair/
Member
Retainer

($)

Nominating

and Corporate
Governance
Committee
Chair/

Member
Retainer

($)

Lloyd A. Carney

105,000

-

26,250

-

-

-

Mary B. Cranston

105,000

-

38,750

-

-

  5,000

Francisco Javier Fernández-Carbajal

105,000

-

-

10,000

  5,000

  5,000

John F. Lundgren

105,000

  18,750

15,000

-

-

  5,000

Robert W. Matschullat

105,000

138,750

-

  5,000

15,000

-

Denise M. Morrison

105,000

-

15,000

-

  5,000

-

Suzanne Nora Johnson

105,000

-

-

30,000

-

10,000

John A. C. Swainson

105,000

-

10,000

  5,000

-

30,000

Maynard G. Webb, Jr.

105,000

-

-

10,000

  5,000

  5,000

 

Note:

Certain directors rotated Committee assignments during the fiscal year. Fees have been prorated to reflect the portion of the fiscal year that the directors served on the Committee.

Fiscal Year 2020 Director Compensation

After consultation with FW Cook, and pursuant to the compensation review process described above, the Compensation Committee made certain changes to the non-employee director compensation program, which will be effective for fiscal year 2020. The Compensation Committee reviewed peer group data and considered FW Cook’s advice that the changes are consistent with our peer group. Specifically, the annual equity grant value to be awarded in fiscal year 2020 to our non-employee directors was increased to $215,000; the annual cash retainer for our non-employee directors was increased to $110,000; and the additional cash retainers for membership of each of our Compensation Committee, Finance Committee, and Nominating and Corporate Governance Committee was increased to $15,000.

 

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Table of Contents

PROPOSAL 1 – ELECTION OF DIRECTORS

 

 

LOGO

Our Board currently consists of eleven directors, each of whom is nominated for election at our Annual Meeting, including ten independent directors and our Chairman and Chief Executive Officer. Each director is elected to serve a one-year term, with all directors subject to annual election.

At the recommendation of the Nominating and Corporate Governance Committee, the Board has nominated the following eleven persons to serve as directors for the term beginning at the Annual Meeting on January 28, 2020: Lloyd A. Carney, Mary B. Cranston, Francisco Javier Fernández-Carbajal, Alfred F. Kelly, Jr., Ramon Laguarta, John F. Lundgren, Robert W. Matschullat, Denise M. Morrison, Suzanne Nora Johnson, John A. C. Swainson and Maynard G. Webb, Jr. Mr. Laguarta was recommended by a global search firm. He was nominated by the Nominating and Corporate Governance Committee after an extensive and careful search was conducted by this search firm, and numerous candidates were considered. The primary functions served by the search firm included identifying potential candidates who meet the key attributes, experience and skills described under “Criteria for Nomination to the Board of Directors and Diversity” above, as well as compiling information regarding each candidate’s attributes, experience, skills and independence and conveying the information to the Nominating and Corporate Governance Committee.

Unless proxy cards are otherwise marked, the persons named as proxies will vote all executed proxies FOR the election of each nominee named in this section. Proxies submitted to Visa cannot be voted at the Annual Meeting for nominees other than those nominees named in this proxy statement. However, if any director nominee is unable or unwilling to serve at the time of the Annual Meeting, the persons named as proxies may vote for a substitute nominee designated by the Board. Alternatively, the Board may reduce the size of the Board. Each nominee has consented to serve as a director if elected, and the Board does not believe that any nominee will be

 

36


Table of Contents

unwilling or unable to serve if elected as a director. Each director will hold office until the next annual meeting of stockholders and until his or her successor has been duly elected and qualified or until his or her earlier resignation or removal.

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES TO SERVE AS DIRECTORS.

Summary of Director Qualifications and Experience

 

 

 

LOGO

 

LOGO

 

LOGO

 

LOGO

 

LOGO

 

LOGO

 

LOGO

 

LOGO

 

LOGO

 

LOGO

 

LOGO

 

                         

 

LOGO

 

 

Payments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOGO

 

 

Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOGO

 

 

Senior Leadership

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOGO

 

 

Public Company Boards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOGO

 

Financial

 

 

 

 

 

 

 

 

 

 

 

 

 

LOGO

 

 

Global Markets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOGO

 

 

Marketing | Brand

 

 

 

 

 

 

 

 

 

 

 

 

LOGO

 

 

Risk

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOGO

 

 

Government | Geo-political    

 

 

 

 

 

 

 

 

 

 

 

 

 

LOGO

 

 

E-Commerce | Mobile

 

 

 

 

 

 

 

 

LOGO

 

 

Ethnic | Gender | National Diversity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOGO

 

 

Years on Board

 

 

4

 

 

12

 

 

12

 

 

6

 

 

<1

 

 

2

 

 

12

 

 

1

 

 

12

 

 

12

 

 

6

 

 

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Table of Contents

DIRECTOR NOMINEE BIOGRAPHIES

The following is additional information about each of the director nominees as of the date of this proxy statement, including their professional background, director positions held currently or at any time during the last five years, and the specific qualifications, experience, attributes or skills that caused the Nominating and Corporate Governance Committee and our Board to determine that the nominee should serve as one of our directors.

 

     

LOGO

Lloyd A. Carney

 

Age: 57

 

Independent

 

Director Since:

June 2015

 

Board Committees:

Audit and Risk

Committee

 

Public Company Directorships:

 

(current) Nuance Communications, Inc.; ChaSerg Technology Acquisition Corp; Vertex Pharmaceuticals; Visa Inc.

(prior) Brocade Communications Systems, Inc., Cypress Semiconductor Corporation; Micromuse, Inc. (Chairman)

 

Career Highlights:

 

•  Chief Executive Officer and director, ChaSerg Technology Acquisition Corp, a Special Purpose Acquisition Corp since September 2018

•  Chief Executive Officer, Carney Global Ventures, LLC, an early round investor, since March 2007

•  Chief Executive Officer and director of Brocade Communications Systems, Inc., a global supplier of networking hardware and software from January 2013 to November 2017

•  Chief Executive Officer and director of Xsigo Systems, an information technology and hardware company, from 2008 to 2012

•  Chief Executive Officer and chairman of the board of Micromuse, Inc., a networking management software company, acquired by IBM, from 2003 to 2006

•  B.S. degree in Electrical Engineering Technology and an Honorary PhD from the Wentworth Institute of Technology, and a M.S. degree in Applied Business Management from Lesley College

 

  

Specific Qualifications, Experience, Attributes and Skills:

 

 

 

LOGO LOGO LOGO LOGO LOGO LOGO LOGO

 

•  Held senior leadership roles at Juniper Networks, Inc., a networking equipment provider, Nortel Networks Inc., a former telecommunications and data networking equipment manufacturer, and Bay Networks, Inc., a computer networking products manufacturer

•  As former Chief Executive Officer for Brocade and prior to that for multiple technology companies, he has extensive experience with information technology, strategic planning, finance and risk management

•  As a director of a number of public and private companies, he has experience with corporate governance, financial reporting and controls, risk management and business strategy and operations

     

LOGO

Mary B. Cranston

 

Age: 71

 

Independent

 

Director Since:

October 2007

 

Board Committees:

Audit and Risk

Committee; Nominating and Corporate Governance Committee

 

Public Company Directorships:

 

(current) The Chemours Company; MyoKardia, Inc.; Visa Inc.

(prior) Exponent, Inc.; GrafTech International, Inc.; International Rectifier Corporation; Juniper Networks, Inc.

 

Career Highlights:

 

•  Retired Senior Partner of Pillsbury Winthrop Shaw Pittman LLP, an international law firm

•  Chair and Chief Executive Officer of Pillsbury from January 1999 to April 2006; continued to serve as Chair of the firm until December 2006; Firm Senior Partner until January 2012

•  A.B. degree in Political Science from Stanford University, a J.D. degree from Stanford Law School and a M.A. degree in Educational Psychology from the University of California, Los Angeles

  

Specific Qualifications, Experience, Attributes and Skills:

 

 

LOGO LOGO LOGO LOGO LOGO LOGO LOGO

 

•  Gained a broad understanding of the business and regulation of the financial services industry as well as of the management of a global enterprise through tenure at the Pillsbury law firm

•  Represented banks and financial institutions for over 30 years, and as Chief Executive Officer of the firm, regularly met with senior executives from banking clients, covering concerns and issues relevant to the financial services industry

•  Oversaw the opening of the firm’s offices in London, Singapore, Sydney and Hong Kong, and expanded the Tokyo office

•  Substantial expertise in complex antitrust, class action and securities law cases and was recognized by the National Law Journal in 2002 as one of the “100 Most Influential Lawyers in America”

•  Regularly reviewed corporate strategies and financial and operational risks as a director of other U.S. publicly-traded companies

•  Identified and managed legal risks for many Fortune 500 companies throughout her legal career, which has helped inform her service on the Audit and Risk Committee

•  Experience and background provide her with significant insight into the legal and regulatory issues facing Visa and its clients, as well as into the challenges of operating a diverse, multinational enterprise

 

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Table of Contents
     

LOGO

Francisco Javier Fernández-Carbajal

 

Age: 64

 

Independent

 

Director Since:

October 2007

 

Board Committees:

Compensation

Committee;

Finance Committee

 

 

Public Company Directorships:

 

(current) ALFA S.A.B. de C.V.; CEMEX S.A.B. de C.V.; Fomento Economico Mexicano, S.A.B. de C.V.; Visa Inc.

(prior) El Puerto de Liverpool, S.A.B. de C.V.; Fresnillo, plc; Grupo Aeroportuario del Pacifico, S.A.B. de C.V.; Grupo Bimbo, S.A.B. de C.V.; Grupo Gigante, S.A.B. de C.V.; Grupo Lamosa, S.A.B. de C.V.; IXE Grupo Financiero S.A.B. de C.V.

 

Career Highlights:

 

•  Consultant for public and private investment transactions and wealth management advisor since January 2002

•  Chief Executive Officer of Servicios Administrativos Contry S.A. de C.V., a privately held company that provides central administrative and investment management services, since June 2005

•  Chief Executive Officer of the Corporate Development Division of Grupo Financiero BBVA Bancomer, S.A., a Mexico-based banking and financial services company that owns BBVA Bancomer, one of Mexico’s largest banks from July 2000 to January 2002; held other senior executive positions at Grupo Financiero BBVA Bancomer since joining in September 1991, serving as President from October 1999 to July 2000, and as Chief Financial Officer from October 1995 to October 1999

•  Degree in Mechanical and Electrical Engineering from the Instituto Tecnológico y de Estudios Superiores de Monterrey and an M.B.A. degree from Harvard Business School

 

  

Specific Qualifications, Experience, Attributes and Skills:

 

 

LOGO LOGO LOGO LOGO LOGO LOGO LOGO

 

•  Substantial payment systems, financial services and leadership experience from his tenure with Grupo Financiero BBVA Bancomer, for which he served in a variety of senior executive roles, including Chief Executive Officer of the Corporate Development Division, Executive Vice President of Strategic Planning, Deputy President of Systems and Operations, Chief Information Officer, Deputy President, President and Chief Financial Officer

•  Background and career in the payments and financial services industry in Mexico enable him to bring global perspectives to the board and to provide relevant insights regarding Visa’s strategies, operations and management. In addition, he chaired the BBVA Bancomer’s Assets and Liabilities Committee, Credit Committee and Operational Risk Committee, which enhanced his understanding of risk management of large, complex organizations

•  As the Chief Financial Officer of a large publicly-traded company, and through his board and committee membership with several large companies in Mexico, he has accumulated extensive experience in corporate finance and accounting, financial reporting and internal controls, human resources and compensation, which contributes to his service on our Compensation and Finance Committees

     

LOGO

Alfred F. Kelly, Jr.

 

Age: 61

 

Director Since:

January 2014

 

Board Committees:

None

 

Public Company Directorships:

 

(current) Visa Inc.

(prior) MetLife Inc.; Affinion Group Holdings, Inc.; Affinion Group, Inc.

 

Career Highlights:

 

•  Chief Executive Officer, Visa Inc. since December 2016 and Chairman since April 2019

•  Chief Executive Officer and President of Intersection, a digital technology and media company, from March 2016 to October 2016

•  Management Advisor, TowerBrook Capital Partners L.P. from April 2015 to February 2016

•  Chairman, President and Chief Executive Officer of the 2014 NY/NJ Super Bowl Host Company, the entity created to raise funds for and host Super Bowl XLVIII, from April 2011 to August 2014

•  Held senior positions at the American Express Company, a global financial services company, for 23 years, including serving as President from July 2007 to April 2010, Group President, Consumer, Small Business and Merchant Services from June 2005 to July 2007, and Group President, U.S. Consumer and Small Business Services from June 2000 to June 2005

•  Former head of information systems at the White House from 1985 to 1987

•  Held various positions in information systems and financial planning at PepsiCo Inc. from 1981 to 1985

•  B.A. degree in Computer and Information Science and an M.B.A. degree from Iona College

  

Specific Qualifications, Experience, Attributes and Skills:

 

 

LOGO LOGO LOGO LOGO LOGO LOGO LOGO LOGO LOGO LOGO

 

•  As the President of American Express, he was responsible for the company’s global consumer businesses, including consumer and small business cards, customer service, global banking, prepaid products, consumer travel and risk and information management

•  Significant tenure and experience as a senior executive of a global financial services and payment card company provide him with a thorough understanding of our business and industry

•  Has experience in information technology and data management, both areas relevant to our business, from his service as the head of information systems of the White House and his roles at PepsiCo

•  His previous service as a member of the Audit Committee of MetLife, and as Chair of the Audit Committees of Affinion Group Holdings, Inc. and its wholly-owned subsidiary, Affinion Group, Inc., enhanced his expertise in the areas of corporate finance, accounting, internal controls and procedures for financial reporting, risk management oversight and other audit committee functions

 

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Table of Contents
     

LOGO

Ramon Laguarta

 

Age: 56

 

Independent

 

Director Since:

November 2019

 

Board Committees:

Audit and Risk Committee

Nominating and Corporate Governance Committee

 

Public Company Directorships:

 

(current) PepsiCo, Inc.; Visa Inc.

(prior) none

 

Career Highlights:

 

•  Chief Executive Officer of PepsiCo, Inc. since October 2018 and Chairman of the Board since February 2019

•  Held several other senior positions at PepsiCo for over 20 years, including: President (2017-2018); Chief Executive Officer, Europe Sub-Saharan Africa (2015-2017); Chief Executive Officer, Europe (2015); President, Developing and Emerging Markets, PepsiCo Europe (2012-2015); President, Eastern Europe, PepsiCo Europe (2008-2012); Commercial Vice President, Snacks and Beverages, PepsiCo Europe (2006-2008); General Manager, Iberia Snacks and Juices (2003-2006); General Manager, Spain Snacks (2001-2003); General Manager, Greece and Cyprus (1999-2001); and Vice President, Business Development (1996-1999)

•  M.B.A. in international business from ESADE Business School in Spain and a Masters in international management from Thunderbird School of Global Management at Arizona State University

 

  

Specific Qualifications, Experience, Attributes and Skills:

 

LOGO LOGO LOGO LOGO

 

 

•  Strong leadership skills and extensive consumer packaged goods experience gained from the 20-plus years he spent in a variety of senior operational and executive roles at PepsiCo enables him to provide valuable market and consumer insights.

•  His numerous international senior management positions, including living in Europe and leading PepsiCo’s Europe Sub-Saharan Africa division, which has operations that span three continents and is composed of developed, developing and emerging markets, provides invaluable perspectives on the global marketplace and sustainability. He speaks multiple languages including English, Spanish, French, German and Greek.

•  His deep experience and strong understanding of the key strategic challenges and opportunities of running a large global business make him well-positioned to oversee strategic planning, operations, marketing, brand development and logistics.

     

LOGO

John F. Lundgren

 

Age: 68

 

Independent

 

Director Since:

April 2017

 

Board Committees:

Nominating and Corporate Governance Committee

 

Public Company Directorships:

 

(current) Callaway Golf Company; Visa Inc.

(prior) Stanley Black & Decker, Inc.; Staples, Inc.

 

Career Highlights:

 

•  Lead Independent Director of our Board since April 2019

•  Chief Executive Officer of Stanley Black & Decker, Inc. from March 2010 until his retirement in July 2016; also served as Chairman until December 2016

•  Chairman and Chief Executive Officer of The Stanley Works, a worldwide supplier of consumer products, industrial tools and security solutions for professional, industrial and consumer use, from March 2004 until its merger with Black & Decker in March 2010

•  President of European Consumer Products of Georgia-Pacific Corporation from January 2000 to February 2004

•  President of European Consumer Products of James River Corporation from 1995 to 1997 and Fort James Corporation from 1997 to 2000 until its acquisition by Georgia-Pacific

•  B.A. degree from Dartmouth College and an M.B.A. from Stanford University

  

Specific Qualifications, Experience, Attributes and Skills:

 

LOGO LOGO LOGO LOGO LOGO LOGO

 

•  Substantial executive leadership and brand experience having served over 12 years as Chief Executive Officer and Chairman of Stanley Black & Decker and The Stanley Works

•  Knowledge and experience with consumer market in Europe having served as President, European Consumer Products of Georgia Pacific Corporation, Fort James Corporation and James River Corporation for over 14 years

•  Currently serves as a member of the Audit Committee of Callaway Golf Company, providing him with experience in the areas of corporate finance, accounting, internal controls and procedures for financial reporting, risk management oversight and other audit committee functions

•  As a director of other public companies, he has experience with corporate governance, risk management, and business strategy and operations

 

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Table of Contents
     

LOGO

Robert W. Matschullat

 

Age: 72

 

Independent

 

Director Since:

October 2007

 

Board Committees:

Compensation Committee;

Finance Committee

 

Public Company Directorships:

 

(current) The Clorox Company; Visa Inc.

(prior) The Walt Disney Company; McKesson Corporation; Morgan Stanley & Co. Incorporated; The Seagram Company Limited

 

Career Highlights:

 

•  Independent Chair of our Board from April 2013 to April 2019

•  Independent Lead Director (November 2012 to July 2015); interim Chairman and interim Chief Executive Officer (March 2006 to October 2006); Presiding Director (January 2005 to March 2006), and Chairman of the board (January 2004 to January 2005) of the Clorox Company, a global consumer products company

•  Vice Chairman of the board of directors and Chief Financial Officer of The Seagram Company Limited, a global company with entertainment and beverage operations, from 1995 until 2000

•  Head of worldwide investment banking at Morgan Stanley & Co. Incorporated, a securities and investment firm, from 1991 to 1995

•  Served on the board of directors of The Walt Disney Company from 2002 to 2018, McKesson Corporation from 2002 to 2007, and Morgan Stanley from 1992 to 1995

•  B.A. degree in Sociology from Stanford University and an M.B.A. degree from the Stanford Graduate School of Business

 

 

  

Specific Qualifications, Experience, Attributes and Skills:

 

LOGO LOGO LOGO LOGO LOGO LOGO LOGO LOGO

 

•  Substantial executive leadership, financial services and risk management experience, having served as the head of worldwide investment banking and a director of Morgan Stanley, the Vice Chairman and Chief Financial Officer of Seagram, and the Chairman and interim Chief Executive Officer of Clorox

•  Was responsible for all finance, strategic planning, corporate communications, government, tax, accounting and internal auditing, mergers and acquisitions and risk management functions at Seagram

•  Served as the chair of the Audit Committee of Disney and Clorox, and as chair of the Finance Committee and a member of the Audit Committee of McKesson. These roles enhanced his expertise in the areas of corporate finance, accounting, internal controls and procedures for financial reporting, risk management oversight and other audit committee functions

•  Has experience managing complex, multinational operations from his tenure at Morgan Stanley, which operates in over 42 countries around the world, as well as Seagram and Clorox, whose products are sold in over 100 countries

 

     

LOGO

Denise M. Morrison

 

Age: 65

 

Independent

 

Director Since:

August 2018

 

Board Committees:

Audit and Risk Committee; Compensation Committee

 

Public Company Directorships:

 

(current) MetLife, Inc.; Quest Diagnostics; Visa Inc.

(prior) Campbell Soup Company

 

Career Highlights:

 

•  Founder of Denise Morrison & Associates, LLC, a consulting firm, since October 2018

•  President and Chief Executive Officer (August 2011 to May 2018), and a Board member (October 2010 to May 2018); Executive Vice President and COO (October 2010 to July 2011); Senior Vice President, President of North America Soup, Sauces and Beverages (October 2007 to September 2010); President, Campbell USA (June 2005 to September 2007); and President, Global Sales and Chief Customer Officer (April 2003 and May 2005) of Campbell Soup Company, a food and beverage company

•  Held senior positions at Kraft Foods, Inc., a food and beverage company, including Executive Vice President and General Manager, Snacks Division from 2001 to 2003; Executive Vice President and General Manager, Confections Division in 2001; Senior Vice President and General Manager, Nabisco Down the Street Division in 2000; Senior Vice President, Nabisco Sales and Integrated Logistics from 1998 to 2000; Vice President, Nabisco Foods Sales and Integrated Logistics from 1997 to 1998 and Area Vice President, West, Nabisco Sales and Integrated Logistics from 1995 to 1997

•  Held various senior marketing and sales positions at Nestle SA from 1984 to 1995

•  Held Business Development manager position at PepsiCo, Inc. from 1982 to 1984

•  Held various manager and sales positions at The Procter & Gamble Company from 1975 to 1982

•  B.S. degrees in Economics and Psychology from Boston College

 

 

  

Specific Qualifications, Experience, Attributes and Skills:

 

LOGO LOGO LOGO LOGO LOGO LOGO LOGO

 

•  Distinguished record of building strong businesses and growing iconic brands, having served over 15 years as Chief Executive Officer and other senior management roles at Campbell Soup Company, whose products are sold in over 120 countries around the world

•  Her extensive executive leadership experience provides her with a strong understanding of the key strategic challenges and opportunities of running a large, complex business, including financial management, operations, risk management, talent management and succession planning, which contributes to her service on our Audit and Risk and Compensation Committees

•  Her prior experience in sales, marketing, operations and business development in leading consumer product companies add to her deep understanding of the consumer and retail market

•  Her board and committee service with public and private companies provide her with a strong understanding of the effective functioning of corporate governance structures

 

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Table of Contents
     

LOGO

 

Suzanne Nora Johnson

 

Age: 62

 

Independent

 

Director Since:

October 2007

 

Board Committees:

Compensation Committee;

Nominating and Corporate Governance Committee

 

Public Company Directorships:

 

(current) American International Group, Inc.; Intuit Inc.; Pfizer Inc.; Visa Inc.

 

Career Highlights:

 

•  Vice Chairman of the Goldman Sachs Group, Inc., a bank holding company and a global investment banking, securities and investment management firm, from November 2004 until her retirement in January 2007

•  Served in various leadership roles at Goldman Sachs, including Chair of the Global Markets Institute, head of the Global Investment Research Division and head of the Global Healthcare Business; founded the firm’s Latin American business

•  B.A. degree in Economics, Philosophy/Religion and Political Science from the University of Southern California and a J.D. degree from Harvard Law School

  

Specific Qualifications, Experience, Attributes and Skills:

 

LOGO LOGO LOGO LOGO LOGO LOGO LOGO LOGO

 

•  Extensive financial services, international and executive leadership experience from her 21-year tenure at Goldman Sachs. As Vice Chairman of the firm, as well as in her prior roles as Chair of the Global Markets Institute, head of the Global Investment Research Division and head of the firm’s Global Healthcare Business, she gained expertise in strategic and financial planning, risk oversight and multinational operations, which enables her to provide sound guidance and insight regarding Visa’s strategies and management

•  Significant financial experience from her work in investment banking and investment research, including a thorough understanding of financial statements, corporate finance, accounting and capital markets

•  Clerked for the United States Court of Appeals for the Fourth Circuit and practiced transactional and banking law at a pre-eminent national law firm, a background that provides her with insight into the laws and regulations that impact Visa

•  Her board and committee service for American International Group, Intuit and Pfizer similarly contribute to her strong understanding of corporate governance and the best practices of effective publicly-traded company boards

 

     

LOGO

 

John A. C. Swainson

 

Age: 65

 

Independent

 

Director Since:

October 2007

 

Board Committees:

Audit and Risk Committee;

Nominating and Corporate Governance Committee

 

Public Company Directorships:

 

(current) Schneider National, Inc.; Visa Inc.

(prior) Assurant Inc.; Broadcom Corporation, CA, Inc.; Cadence Design Systems Inc.

 

Career Highlights:

 

•  Executive Partner, Siris Capital Group, a private equity firm, since November 2017

•  President of the Software Group of Dell Inc., a global computer manufacturer and information technology solutions provider, from February 2012 to November 2016

•  Senior Advisor to Silver Lake Partners, a global private investment firm, from June 2010 to February 2012

•  Chief Executive Officer of CA, Inc. (now CA Technologies), an information technology management software company, from February 2005 to December 2009 and was President and a director of CA, Inc. from November 2004 to December 2009

•  Vice President of Worldwide Sales for the Software Group of International Business Machines Corporation (IBM), a globally integrated technology company, from July 2004 to November 2004

•  General Manager of the Application Integration Middleware division of IBM from 1997 to 2004

•  Bachelor of Applied Science degree in Engineering from the University of British Columbia

  

Specific Qualifications, Experience, Attributes and Skills:

 

LOGO LOGO LOGO LOGO LOGO LOGO

 

 

•  Significant experience in the information technology industry, as well as in executive management, international operations, strategy, sales and marketing, from his tenure at Dell, CA Inc., and IBM

•  Responsible for leading Dell’s worldwide software businesses as the President of the Software Group, including software delivered as part of Dell’s hardware and services operations.

•  Oversaw the strategic direction and day-to-day operations as the Chief Executive Officer and director of CA, Inc., which is a multinational enterprise software business serving clients around the globe

•  Spent 26 years as a senior executive at IBM, including as Vice President of Worldwide Software Sales, where he oversaw sales for all IBM software products globally

•  Served as the General Manager of the Application Integration and Middleware Division, IBM’s largest software division, where he and his team developed, marketed and launched highly successful middleware products

•  Member of IBM’s Worldwide Management Council, strategy team and senior leadership team

•  Extensive executive experience from his roles at Dell, CA Inc., and IBM enables him to provide valuable insight into Visa’s product and growth strategies and other key aspects of the Company’s day-to-day business and management

•  Prior board and committee service for Cadence Design Systems Inc., Assurant Inc. and Broadcom Corporation broadened his exposure to new technologies, and provided him with expertise in the corporate governance of U.S. publicly-traded companies, which is relevant to his service on our Nominating and Corporate Governance Committee

 

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Table of Contents
     

LOGO

 

Maynard G. Webb, Jr.

 

Age: 64

 

Independent

 

Director Since:

January 2014

 

Board Committees:

Compensation Committee;

Finance Committee

 

Public Company Directorships:

 

(current) Salesforce.com. Inc.; Visa Inc.

(prior) Extensity, Inc.; Gartner, Inc.; Hyperion Solutions Corporation; LiveOps, Inc.; Niku Corporation; Yahoo! Inc.

 

Career Highlights:

 

•  Founder of Webb Investment Network, an early stage investment firm, and a co-founder of Everwise Corporation, a provider of workplace mentoring solutions

•  Chairman of the Board of LiveOps Inc., a cloud-based call center, from 2008 to 2013 and was its Chief Executive Officer from December 2006 to July 2011

•  Chief Operating Officer of eBay, Inc., a global commerce and payments provider, from June 2002 to August 2006, and President of eBay Technologies from August 1999 to June 2002

•  Senior Vice President and Chief Information Officer at Gateway, Inc., a computer manufacturer, from July 1998 to August 1999

•  Vice President and Chief Information Officer at Bay Networks, Inc., a computer networking products manufacturer, from February 1995 to July 1998

•  Bachelor of Applied Arts degree from Florida Atlantic University

  

Specific Qualifications, Experience, Attributes and Skills:

 

LOGO LOGO LOGO LOGO LOGO LOGO LOGO LOGO

 

 

•  Significant experience in developing, managing and leading high-growth technology companies, both from his roles as an investor and as a senior executive of LiveOps and eBay

•  Substantial leadership and operational experience, having served as the Chief Executive Officer of LiveOps, Chief Operating Officer of eBay, Inc., President of eBay Technologies, and as Chief Information Officer of Gateway and Bay Networks

•  His experience and expertise in engineering and information technology, as well as his prior and current service on the boards of several large, publicly-traded technology companies, enable him to contribute to the board’s understanding and oversight of Visa’s management, operations, systems and strategies

 

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Table of Contents

BENEFICIAL OWNERSHIP OF EQUITY SECURITIES

Except where otherwise indicated, we believe that the stockholders named in the tables below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. The following tables are based on 1,711,838,234 shares of Class A common stock outstanding as of November 29, 2019.

Directors and Executive Officers

The following table sets forth information known to the Company as of December 1, 2019 with respect to beneficial ownership of our Class A common stock by:

 

   

each member of the Board;

 

   

our named executive officers for fiscal year 2019; and

 

   

all current executive officers and directors of Visa as a group.

None of the directors, named executive officers, individually, or directors and current executive officers as a group, beneficially owned more than 1% of the total number of shares of our Class A common stock outstanding as of December 1, 2019.

 

Name of Beneficial Owner    Class A
common stock
    

Shares Issuable

Pursuant to Options
Exercisable within 60 days

of December 1, 2019

         Total      

Directors and Named Executive Officers:

        

Rajat Taneja

  

 

218,003

 

  

 

618,776

 

  

 

836,779

 

Ryan McInerney

  

 

133,776

 

  

 

520,598

 

  

 

654,374

 

Alfred F. Kelly, Jr.

  

 

146,514

 

  

 

375,918

 

  

 

522,432

(1) 

Vasant M. Prabhu

  

 

  79,767

 

  

 

263,681

 

  

 

343,448

 

Kelly Mahon Tullier

  

 

  53,271

 

  

 

166,254

 

  

 

219,525

 

Suzanne Nora Johnson

  

 

109,313

 

  

 

-

 

  

 

109,313

 

John A. C. Swainson

  

 

  70,173

 

  

 

-

 

  

 

70,173

 

Robert W. Matschullat

  

 

  58,849

 

  

 

-

 

  

 

58,849

(1) 

Francisco Javier Fernández-Carbajal

  

 

  26,353

 

  

 

-

 

  

 

26,353

 

Mary B. Cranston

  

 

  18,428

 

  

 

-

 

  

 

18,428

(1) 

Lloyd A. Carney

  

 

    3,452

 

  

 

-

 

  

 

3,452

 

John F. Lundgren

  

 

    2,885

 

  

 

-

 

  

 

2,885

 

Denise M. Morrison

  

 

    3,223

 

  

 

-

 

  

 

3,223

 

Maynard G. Webb, Jr.

  

 

    1,481

 

  

 

-

 

  

 

1,481

(1) 

Ramon Laguarta

  

 

       206

 

  

 

-

 

  

 

206

 

All Directors and Executive Officers as a Group (18 persons)

  

 

1,180,418   

 

  

 

2,147,221  

 

  

 

3,327,639

 

 

(1)

Total does not include the following number of shares deferred by each of our directors, as to which no voting or investment power currently exists: Matschullat (2,880), Cranston (10,581), Kelly (5,126) and Webb (9,100).

 

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Table of Contents

Principal Stockholders

The following table shows those persons known to the Company to be the beneficial owners of more than 5% of the Company’s Class A common stock based on the information disclosed in the SEC filings identified below and the number of the Company’s Class A common stock outstanding as of December 1, 2019. In furnishing the information below, the Company has relied on information filed with the SEC by the beneficial owners.

 

Name and Address of

Beneficial Owner

  

  Date of Schedule 13G/A  

Filing

  

Amount and Nature of

Beneficial Ownership(1)

  

Percent of Class

(%)

The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355

   February 11, 2019    134,176,902    7.84

BlackRock Inc.
55 East 52nd Street
New York, NY 10055

   February 6, 2019    121,832,516    7.12

FMR LLC
245 Summer Street
Boston, MA 02210

 

   February 13, 2019    91,031,323    5.32

 

(1)

Beneficial Owner    Sole Power to
Vote
     Shared Power
to Vote
     Sole Power to
Dispose
     Shared Power
to Dispose
 

Vanguard

  

 

2,173,980

 

  

 

438,203

 

  

 

131,606,930

 

  

 

2,569,972

 

BlackRock

  

 

105,507,881

 

  

 

0

 

  

 

121,832,516

 

  

 

0

 

FMR

  

 

13,808,055

 

  

 

0

 

  

 

91,031,323

 

  

 

0

 

 

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EXECUTIVE OFFICERS

Biographical data for each of our current executive officers is set forth below, excluding Mr. Kelly’s biography, which is included under the heading Director Nominee Biographies above.

 

 

LOGO

Lynne Biggar

 

Executive Vice

President and Chief

Marketing and

Communications Officer

 

Age: 57

 

 

 

•  Joined Visa in February 2016

•  Leads all global efforts driving Visa’s global brand and surrounding marketing and client/consumer engagement efforts, including brand positioning, sponsorship management and activation, media and channel strategies, data and insights development, and internal and external communications

•  Former Executive Vice President – Consumer Marketing and Revenue for Time Inc., one of the largest branded media companies, from November 2013 to January 2016, where she was responsible for driving consumer revenue for Time Inc. brands and products across all channels, consumer insights, data solutions and customer service.

•  Held many senior positions at American Express Company, a multinational financial services corporation, from 1992 to 2013, most recently as Executive Vice President & General Manager – International Card Products and Experiences from January 2012 to November 2013, and Executive Vice President & General Manager – US Membership Rewards and Strategic Card Services in 2011

•  Member of the Board of Directors of Voya Financial, Inc.

•  Received her B.A. in international relations from Stanford University and an M.B.A. from Columbia University

 

 

LOGO

Paul Fabara

 

Executive Vice President and Chief Risk Officer

 

Age: 54

 

 

 

•  Joined Visa in September 2019

•  Responsible for maintaining the integrity and security of the Visa payment system, while also serving as the principal liaison with regulatory agencies

•  Ensures that Visa continues to deliver industry-leading services to prevent, detect and mitigate the impact of fraud and security attacks on Visa’s clients and other payment system stakeholders

•  Held many senior positions at American Express Company, a multinational financial services corporation, from 2011 to 2019, most recently as President, Global Services Group from February 2018 to September 2019, where he was responsible for the company’s global servicing functions, including customer service, credit and fraud operations, as well as enterprise-wide strategic initiatives; and Chief Risk Officer and President, Global Risk, Banking & Compliance, where he promoted strong capabilities and disciplined, integrated risk controls, from February 2016 to February 2018

•  Held senior positions at Barclays, a multinational investment bank and financial services company, including Managing Director, Global Head of Operations, Regulatory Implementation and Planning from February 2009 to January 2011, and Global Chief Operating Officer, Barclaycard from August 2006 to February 2009

•  Former Chief Operating Officer, Card Services at Alliance Data Systems, provider of loyalty and marketing services, from June 2002 to August 2006

•  Started his career at Providian Financial Corporation, where he served in many capacities including risk management, underwriting, marketing, sales and service and credit administration

 

LOGO

Ryan McInerney

 

President

 

Age: 44

 

 

•  Joined Visa in May 2013

•  Responsible for delivering value to Visa’s financial institutions, acquirers, merchants and strategic partners in more than 200 countries and territories around the world

•  Oversees Visa’s market leadership teams, client support services, innovation and strategic partnerships, and global product solutions

•  Served as Chief Executive Officer of Consumer Banking for JPMorgan Chase, a global financial services firm, from June 2010 to May 2013, where he oversaw a business with more than 75,000 employees and revenues of approximately $14 billion; was responsible for a banking network serving 20 million customers in 23 states

•  Served as Chief Operating Officer for Home Lending and as Chief Risk Officer for Chase’s consumer businesses, overseeing all credit risk management in credit card, home lending, auto finance, education finance, consumer banking and business banking; also served as Chase’s head of Product and Marketing for Consumer Banking

•  Former Principal at McKinsey & Company in the firm’s retail banking and payments practices

•  Received a finance degree from the University of Notre Dame

 

 

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LOGO

Vasant M. Prabhu

 

Vice Chairman and

Chief Financial Officer

 

Age: 59

 

 

•  Joined Visa in February 2015

•  Responsible for the Company’s financial strategies, planning and reporting, in addition to all finance operations and investor relations

•  Served as Chief Financial Officer for NBCUniversal, a multinational media conglomerate, from May 2014 to February 2015, where he oversaw the company’s financial planning and operations and played a key role in NBCUniversal’s strategic business initiatives. Also managed the Operations and Technical Services division, which included NBCUniversal’s technical operations, physical plant, corporate services and information technology functions

•  Served as Chief Financial Officer for Starwood Hotels & Resorts Worldwide, Inc., a hotel company that is now part of Marriott International, from 2004 to May 2014

•  Former Executive Vice President, Chief Financial Officer and President, E-Commerce for Safeway, Inc., the $35 billion supermarket retailer

•  Gained experience in the media sector as President of the Information and Media Group, The McGraw-Hill Companies, where he led a $1 billion division comprising Business Week, Broadcast television stations and Business Information Services

•  Held senior positions at PepsiCo, including Senior Vice President of Finance & Chief Financial Officer, Pepsi-Cola International

•  Started his career at Booz, Allen & Hamilton, the management consulting firm, where he rose to become a Partner serving Media and Consumer companies

•  Member of the Board of Directors of Mattel, Inc.

•  Received his M.B.A. from the University of Chicago and a B.S. in Engineering from the Indian Institute of Technology

 

 

LOGO

William M. Sheedy

 

Executive Vice President, The Strategy Group

 

Age: 52

 

 

•  Joined Visa in 1993

•  Responsible for charting the Company’s strategic direction and driving growth; expanding the Company’s relationships with governments and regulators globally; leading critical initiatives and transactions with clients and partners around the world, with a particular focus on Europe; and leads Visa’s initiatives focused on global social impact, as well as all employee learning activities.

•  Former CEO of Visa Europe, and Group President, Americas, and oversaw Visa’s business in North America, Central America, South America and the Caribbean, across nearly 50 countries; was responsible for issuer, merchant, acquirer and third-party processor relationships and led efforts to expand card issuance, merchant acceptance and usage of Visa-branded products and services across the Americas; also had responsibility for Visa’s core credit, debit, prepaid, commercial/small business, co-brand, CyberSource and merchant acceptance businesses

•  Served as President of the company’s North America region

•  Played a leadership role in managing Visa’s corporate restructuring that merged multiple regional Visa groups into a single global company, culminating in Visa’s successful initial public offering in 2008

•  Managed Visa’s U.S. pricing and economics strategies

•  Holds a B.S. from West Virginia University and an M.B.A. from the University of Notre Dame

 

 

LOGO

Rajat Taneja

 

President, Technology

 

Age: 55

 

 

 

•  Joined Visa in November 2013

•  Responsible for the Company’s technology innovation and investment strategy, product engineering, global IT and operations infrastructure

•  Served as Executive Vice President and Chief Technology Officer of Electronic Arts Inc., a video game company, from October 2011 to November 2013, where he was responsible for platform engineering, data center operations and IT supporting the company’s global customer base

•  Worked at Microsoft Corporation, including most recently as the Corporate Vice President, Commerce Division, in 2011 and the General Manager and Corporate Vice President, Online Services Division, from 2007 to 2011

•  Holds a B.E. in Electrical Engineering from Jadavpur University and an M.B.A. from Washington State University

 

 

LOGO

Kelly Mahon Tullier

 

Executive Vice President, General Counsel and Corporate Secretary

 

Age: 53

 

 

 

•  Joined Visa in June 2014

•  Leads the global legal and compliance functions for Visa

•  Served as Senior Vice President and Deputy General Counsel at PepsiCo, Inc., a multinational food, snack and beverage corporation, from August 2011 to June 2014, and managed the global legal teams supporting the business around the world, as well as centralized teams responsible for mergers and acquisitions, intellectual property, regulatory, litigation and procurement legal matters; also served as Senior Vice President and General Counsel for PepsiCo’s Asia Pacific, Middle East and Africa division, based in Dubai

•  Former Vice President and General Counsel for Frito-Lay, Inc., with responsibility for a wide range of legal, policy and compliance issues

•  Former associate at Baker Botts LLP and also served as a law clerk for the Honorable Sidney A. Fitzwater, U.S. District Court, Northern District of Texas

•  Received her B.A. from Louisiana State University and her J.D., magna cum laude, from Cornell Law School

 

 

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COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

This Compensation Discussion and Analysis describes our executive compensation philosophy and programs, and compensation decisions made under those programs for our named executive officers, or NEOs, for fiscal year 2019, who are listed below.

 

Name

    

Title

Alfred F. Kelly, Jr.

    

Chairman and Chief Executive Officer

Vasant M. Prabhu

    

Vice Chairman and Chief Financial Officer

Ryan McInerney

    

President

Rajat Taneja

    

President, Technology

Kelly Mahon Tullier

    

Executive Vice President, General Counsel and Corporate Secretary

Philosophy of our Compensation Program

We maintain compensation plans that tie a substantial portion of our NEOs’ overall target annual compensation to the achievement of our corporate performance goals as well as their individual performance. The Compensation Committee employs multiple performance measures and strives to award an appropriate mix of annual and long-term equity incentives to avoid overweighting short-term objectives. Please see the heading How our Incentive Program is Tied to our Long-Term Strategy for additional information regarding how we include ESG factors in our compensation program.

 

Principles of our Compensation Program

 

Pay for Performance

  

 

The key principle of our compensation philosophy is pay for performance.

 

 

Alignment with

Stockholders’ Interests

  

 

We reward performance that meets or exceeds the performance goals that the Compensation Committee establishes with the objective of increasing stockholder value.

 

 

Variation Based on Performance

  

 

We favor variable pay opportunities that are based on performance over fixed pay. The total compensation received by our NEOs varies based on corporate and individual performance measured against annual and long-term goals.

 

 

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LOGO

 

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Components of Executive Compensation

 

  Compensation

  Component

     

    Type of Pay     

 

     

Key Characteristics

 

     

Purpose

 

   
               
 

 

Annual Cash Compensation

             

    

  Base Salary   Fixed     Annual adjustments based on individual performance, relative to market pay level and internal pay equity.   Attracts, retains and rewards NEOs by providing a fixed source of income to reward experience, skills and competencies relative to market value of the job.  
           
 

 

Annual Incentive Awards

             

    

  Cash Incentive Awards  

Performance-

Based

    Variable cash compensation component based on performance against pre-established individual and corporate performance goals.  

Focuses NEOs on our results by rewarding corporate and individual performance and achievement of strategic goals.

Aligns NEOs’ interests with stockholders by promoting strong annual income and revenue growth results.

 
           
 

 

Long-term Incentive Awards

             

    

  Equity Granted in the Form of Stock Options, Restricted Stock Awards/Units and Performance Shares  

Performance-

Based

   

Long-term equity awards (excluding performance shares) vest in increments over a three-year period.

Performance shares have a three-year performance period and vest at the end of the three-year period.

 

Aligns each NEO’s interests with long-term stockholder interests by linking a substantial portion of each NEO’s compensation to long-term corporate performance and operational efficiency.

Retains NEOs through multi-year vesting of equity grants and performance periods, as applicable.

Provides opportunities for wealth creation and stock ownership, which attract and motivate our NEOs and promote retention.

 
                     
           

 

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Fiscal Year 2019 Financial Highlights

Visa delivered another year of strong financial results in fiscal year 2019. The following table summarizes our key financial results for fiscal years 2019 and 2018. Please see the section entitled Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for a more detailed discussion of our fiscal year 2019 financial results. In addition, Visa’s total shareholder return for fiscal year 2019 reflected a 15.3% increase.

 

       

Fiscal Year

2019

 

      

Fiscal Year

2018

 

      

Change

(%)(2)

 

Net Revenue Growth, as reported

 

    

 

 

11%(2)

 

 

 

    

 

 

12%(2)

 

 

 

    

n/a

 

GAAP Net Income (in millions, except percentage)

 

    

 

 

 

 

$12,080

 

 

 

 

    

 

 

 

 

$10,301

 

 

 

 

    

 

17%

 

Non-GAAP Net Income(1) (in millions, except percentage)

 

    

 

 

 

 

$12,367

 

 

 

 

    

 

 

 

 

$10,729

 

 

 

 

    

 

15%

 

 

GAAP Diluted Earnings Per Share

 

    

 

 

 

 

$    5.32

 

 

 

 

    

 

 

 

 

$    4.42

 

 

 

 

    

 

20%

 

 

Non-GAAP Diluted Earnings Per Share(1)

 

    

 

 

 

 

$    5.44

 

 

 

 

    

 

 

 

 

$    4.61

 

 

 

 

    

 

18%

 

 

(1)

Non-GAAP net income and Non-GAAP diluted earnings per share in fiscal 2019 and 2018 reflect results as reported in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), adjusted to exclude the impact of certain significant items that we do not believe were indicative of our operating performance, as they were either non-recurring or had no cash impact. For supplemental financial data and corresponding reconciliation to U.S. GAAP see Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019 filed with the SEC on November 14, 2019. Non-GAAP adjusted measures should be viewed in addition to, and not as an alternative for, financial results prepared in accordance with U.S. GAAP. When making its determination of the net revenue, net income, and earnings per share metrics, which were used as goals for the annual incentive plan and for performance share awards, the Compensation Committee further adjusted as reported results for the items described under the heading Compensation Discussion and Analysis – Corporate Performance Measures and Results for Fiscal Year 2019 and Compensation Discussion and Analysis – Long-Term Incentive Awards Granted in Fiscal Year 2019.

(2)

Calculated based on unrounded numbers.

How Fiscal Year 2019 Named Executive Officer Compensation Is Tied to Company Performance

Our corporate performance was a key factor in our fiscal year 2019 NEO compensation program:

Link to Company Performance

 

   

For fiscal year 2019, 94% of our Chairman and Chief Executive Officer’s total direct compensation was performance-based and 90% of the average of our other NEOs’ total direct compensation was performance-based. We compensated our NEOs predominantly based on corporate performance. Our Compensation Committee chose Net Income Growth, Net Revenue Growth, Earnings Per Share and relative Total Shareholder Return as key metrics that drive stockholder value, which we use as the basis to compensate our NEOs.

Utilize Annual and Long-Term Awards

 

   

Each NEO’s performance-based compensation includes an annual cash incentive award and long-term performance shares. For the annual cash incentive, the target award is established at the beginning of the fiscal year and the actual award is adjusted based on performance against pre-established goals. Performance shares provide the opportunity for shares to be earned at the end of a three-year performance period if pre-established financial goals are met. We also grant time-based stock options and restricted stock units, which provide value based on the Company’s stock price performance.

 

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Focus on Corporate Performance Metrics

 

   

The Net Income Growth and Net Revenue Growth metrics for our annual cash incentive awards were adjusted (in accordance with terms approved at the beginning of fiscal year 2019) when determining the annual cash incentive awards as described under the heading Compensation Discussion and Analysis –Corporate Performance Measures and Results for Fiscal Year 2019. In this proxy statement, we refer to these metrics as Net Income Growth – VIP adjusted and Net Revenue Growth – VIP adjusted. Actual performance for each metric exceeded target for fiscal year 2019. Accordingly, the Compensation Committee approved the corporate performance portion of the annual incentive award paying out at 122% of target.

 

   

The final number of shares earned pursuant to a performance share award is determined based on the average EPS result over the three separate years applicable to the particular performance share award and the relative TSR for the three-year period. As described under the heading Compensation Discussion and Analysis – Long-Term Incentive Awards Granted in Fiscal Year 2019, and in accordance with terms approved at the beginning of fiscal year 2019, the Compensation Committee adjusted the fiscal year 2019 EPS when determining applicable performance share results. In this proxy statement, we refer to this metric as EPS – PS adjusted. Our fiscal year 2019 EPS – PS adjusted was above target, resulting in a performance factor of 127% for the relevant portion of the award.

 

   

The performance shares previously awarded on November 19, 2016 completed their three-year performance period following the 2019 fiscal year-end. Performance shares earned pursuant to this award were based on EPS – PS adjusted for fiscal years 2017, 2018 and 2019 and three-year relative TSR (measured against the S&P 500). As described under the heading Compensation Discussion and Analysis – Determination of Shares Earned for Performance Shares Previously Awarded on November 19, 2016, EPS-PS adjusted and TSR metrics were above target and the performance shares earned equated to 200% of the target share award.

 

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Highlights of our Compensation Programs

 

WHAT WE DO

LOGO

  

 

Pay for Performance: A significant portion of each NEO’s target annual compensation is tied to corporate and individual performance.

 

LOGO

 

  

 

Annual Say-on-Pay Vote: We conduct an annual Say-on-Pay advisory vote. At both our 2019 and 2018 Annual Meetings of Stockholders, approximately 96% of the votes cast on the Say-on-Pay proposal were in favor of the fiscal year compensation of our NEOs.

 

LOGO

 

  

 

Clawback Policy: Our Clawback Policy allows the Board to recoup incentive compensation paid to our executive officers if the financial results on which the awards were based are materially restated due to fraud, intentional misconduct or gross negligence of the executive officer.

 

LOGO

 

  

 

Short-Term and Long-Term Incentives/Measures: Our annual and long-term plans provide a balance of incentives and include different measures of performance.

 

LOGO

 

  

 

Capped Incentive Award: Payouts under our annual incentive and long-term performance shares are capped at 200% of target.

 

LOGO

 

  

 

Independent Compensation Consultant: The Compensation Committee engages an independent compensation consultant, who provides no other service to the Company.

 

LOGO

 

  

 

Stock Ownership Guidelines: To further align the interests of management with our stockholders, we have significant stock ownership guidelines that require our executive officers to hold a multiple of their annual base salary in equity.

 

LOGO

 

  

 

Limited Perquisites and No Related Tax Gross-Ups: We provide limited perquisites and no tax gross-ups except on business-related relocation expenses and tax equalization for employees on expatriate assignments, as provided in our relocation and tax equalization policies.

 

LOGO

 

  

 

Engagement with Stockholders: Our Board and management team greatly value the opinions and feedback of our stockholders, which is why we have proactive, ongoing engagement with our stockholders throughout the year focused on executive compensation.

 

 
WHAT WE DON’T DO

LOGO

 

  

 

Gross-ups for Excise Taxes: Our Executive Severance Plan does not contain a gross-up for excise taxes that may be imposed as a result of severance or other payments deemed made in connection with a change of control. Similarly, we do not provide for tax gross-ups on our limited perquisites.

 

  LOGO

 

  

 

Reprice Stock Options: Our equity incentive plan prohibits the repricing of stock options and stock appreciation rights without prior stockholder approval.

 

LOGO

 

  

 

Fixed-Term Employment Agreements: Employment of our executive officers is “at will” and may be terminated by either the Company or the employee at any time.

 

  LOGO

 

  

 

No Single-Trigger Severance Arrangements: Our Executive Severance Plan and equity award agreements generally require a qualifying termination of employment in addition to a change of control before any change of control payments or benefits are triggered.

 

LOGO

 

  

 

Hedging and Pledging: Our insider trading policy prohibits all employees and directors from hedging their economic interest in the Visa shares they hold or pledging Visa shares as collateral for a loan.

 

 

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How our Incentive Program is Tied to our Long-Term Strategy

We have designed our strategic pillars, which are outlined below, to position the Company competitively and thereby deliver superior operational and financial performance, which will in turn create value for our stockholders.

 

 

LOGO

 

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As illustrated below, we tie our executive compensation program to our long-term business strategy by keeping our executive officers focused on, and rewarding them for, their achievement of goals and fulfillment of activities that support our strategic pillars. A number of these individual goals promote and incorporate environmental, social and governance (“ESG”) factors. In addition, achieving our strategic pillars helps drive the long-term corporate performance metrics used in our executive compensation program.

 

 

LOGO

 

       

Annual Incentive Plan: Individual and Corporate Performance

 

 

     

  A significant portion of our executive officers’ individual performance goals is tied to one or more of our strategic pillars (as explained further in this proxy statement under Individual Performance Goals and Results for Fiscal Year 2019)

 

  The executive officers’ individual performance goals may also include ESG factors such as:

 

  Diversity and inclusion

 

  Employee leadership and development

 

  Cybersecurity and data privacy

 

  Financial inclusion and access

 

  We link a substantial portion of compensation to corporate performance through use of annual cash incentives determined by Net Income Growth and Net Revenue Growth

 

 

         

Aligns executive officers’ interests with stockholders’ interests by:

 

  rewarding individual performance for achievement of strategic goals (designed to position the Company competitively)

 

  promoting strong annual net income and revenue growth

 

 

 

       

Long-Term Equity Grants: Individual and Corporate Performance

 

 

       

  We consider individual performance (which is tied to the strategic pillars, including relevant ESG factors) in setting the value of our executive officers’ long-term equity grant

 

  We link a substantial portion of compensation to long-term corporate performance through the use of long-term incentives, including performance shares that use EPS and relative TSR as financial metrics

 

 

         

Further aligns executive officers’ interests with long-term stockholders’ interests by:

 

  taking individual performance (which is tied to strategic pillars) into account in making grants

 

  linking a substantial portion of long-term compensation to long-term corporate performance and operational efficiency

 

 

 

Say-on-Pay

At the 2019 Annual Meeting of Stockholders, approximately 96% of the votes cast on the Company’s annual Say-on-Pay proposal supported our NEO compensation program. We believe these results represent strong investor support of our overall compensation philosophy and decisions for fiscal year 2018. Accordingly, the Compensation Committee did not make any changes to the underlying structure of our executive compensation program for fiscal year 2019 directly as a result of the Say-on-Pay vote. Nevertheless, the Compensation Committee regularly reviews and adjusts the program to ensure it remains competitive and aligned with our stockholders’ interests.

 

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Setting Executive Compensation

Compensation Committee and Management

Our Compensation Committee, which consists solely of independent directors, is responsible for establishing and reviewing the overall compensation philosophy and program for our NEOs.

As discussed in detail under the heading Risk Assessment of Compensation Programs, when establishing the annual compensation program for our NEOs, the Compensation Committee takes into consideration the potential risks associated with the program and structures it to provide appropriate incentives without encouraging excessive risk taking.

 

 

Setting Performance Goals and Making Compensation Determinations

 

 

LOGO

 

   Compensation Committee begins review of our compensation program, including determining if our compensation levels are competitive with our peer companies and if any changes should be made to the program for the next fiscal year.

 

   Compensation Committee determines the principal components of compensation for the NEOs and the individual performance goals of the Chairman and Chief Executive Officer and sets the performance goals for each corporate performance-based compensation component.

 

   Chairman and Chief Executive Officer sets individual performance goals for each of the other NEOs, which are reviewed by the Compensation Committee. The individual performance goals are designed to drive our corporate goals and strategic pillars.

   

   Compensation Committee meets regularly throughout the year, with management and in executive session, and reviews the Company’s performance to date against the corporate performance goals.

    

   Compensation Committee conducts a multi-part review of each NEO and the Company’s performance for the preceding fiscal year measured against the pre-established performance goals and makes annual compensation determinations. The Compensation Committee’s objective is to ensure that the level of compensation approved is consistent with the level of corporate and individual performance delivered.

 

   Our Chairman and Chief Executive Officer reviews the performance of each NEO (other than his own performance, which is reviewed by the Compensation Committee) relative to the individual annual performance goals established for the fiscal year and presents his compensation recommendations to the Compensation Committee.

 

   Compensation Committee exercises discretion in modifying any compensation recommendations relating to NEOs that were made by our Chairman and Chief Executive Officer and approves all compensation decisions for our NEOs.

 

   For his own performance review, the Chairman and Chief Executive Officer prepares a self-assessment, which is discussed by the Compensation Committee and the independent directors. When making compensation decisions for our Chairman and Chief Executive Officer and other NEOs, the Compensation Committee considers the views of the independent directors.

 

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Role of Independent Consultant

Our Compensation Committee has the sole authority to retain and replace compensation consultants to provide it with independent advice. The Compensation Committee has engaged FW Cook as its independent consultant to advise it on executive and non-employee director compensation matters. This selection was made without the input or influence of management. Under the terms of its agreement with the Compensation Committee, FW Cook will not provide any other services to the Company, unless directed to do so by the Compensation Committee. During fiscal year 2019, FW Cook provided no services to the Company other than to advise the Compensation Committee on executive and non-employee director compensation issues. In addition, at the start of fiscal year 2019, the Compensation Committee conducted a formal evaluation of the independence of FW Cook and, based on this review, did not identify any conflict of interest raised by the work FW Cook performed in fiscal year 2019. When conducting this evaluation, the Compensation Committee took into consideration the factors set forth in Exchange Act Rule 10C-1 and the NYSE’s listing standards.

Compensation Peer Group

As part of its annual compensation review process, the Compensation Committee discussed with FW Cook an analysis of our fiscal year 2019 executive compensation program, including total compensation and the elements used to compensate our NEOs. It then compared their compensation to that of similarly situated named executive officers of other companies in our compensation peer group. The review was based on public compensation data for our compensation peer group and data from third-party compensation surveys.

To best inform their pay decisions based on where the Company competes for talent, the Compensation Committee has established two categories for identifying peer companies:

 

   

Direct business competitors, plus any companies listed as peers by a majority of these companies that would be considered “peers of peers.”

 

   

Related-industry competitors who are S&P 500 companies (a) classified as financial services or technology, excluding hardware and manufacturing, (b) with a 12-month average market-cap value between 1/4th and 4x Visa’s average market-capitalization, and (c) with annual revenues of less than $150 billion.

The Committee removed as a separate category for identifying peer companies, strategic competitors who are S&P 500 companies recommended by management and approved by the Compensation Committee that have respected global brands, fit the above size criteria, and are frequent competitors for executive talent. Taking into consideration the fact that no companies had been identified under this measure since it was established, the Committee determined that this category was not necessary.

A list of 22 companies identified as peers for fiscal year 2019 is shown below. These remain unchanged from our fiscal year 2018 peer group:

 

Direct Peers

 

   Related Industry Peers
  

Financial Services

 

  

Technology

 

– American Express Company

– Discover Financial Services

– Mastercard Incorporated

– PayPal Holdings, Inc.

  

– Bank of America Corporation

– BlackRock, Inc.

– Capital One Financial Corporation

– Citigroup Inc.

– JPMorgan Chase & Co.

– Morgan Stanley

– The Bank of New York Mellon Corporation

– The Goldman Sachs Group, Inc.

– The PNC Financial Services Group, Inc.

– U.S. Bancorp

– Wells Fargo & Company

 

  

– Accenture plc

– Facebook, Inc.

– Alphabet Inc.

– IBM Corporation

– Microsoft Corporation

– Oracle Corporation

– salesforce.com, inc.

 

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Use of Market Data

In order to attract and retain key executives, we target total compensation for our NEOs by reference to the range of compensation paid to similarly situated executive officers of our compensation peer group. This includes salary, annual incentive targets and long-term incentive values. The actual level of our NEOs’ total direct compensation is determined based on both individual and corporate performance and can vary based on such factors as expertise, performance or advancement potential.

Internal Equity and Tally Sheets

As part of its annual compensation review, the Compensation Committee compares our NEOs’ target annual compensation levels to ensure they are internally equitable. The Compensation Committee also regularly reviews tally sheets for each NEO to ensure that it is considering a complete assessment of all compensation and benefits. The tally sheets include each NEO’s wealth accumulation, which is composed of the aggregate amount of equity awards and other compensation values accumulated by each NEO, and potential payments upon termination or termination following a change of control.

Summary of Fiscal Year 2019 Base Salary and Incentive Compensation

In November 2019, the Compensation Committee determined our NEOs’ total direct compensation based on corporate and individual performance for fiscal year 2019, which is composed of the following elements:

 

 

LOGO

The table below reflects the above components for each NEO for fiscal year 2019. As the long-term incentive awards for fiscal year 2019 set forth in the following table were awarded after the end of the fiscal year, they are discussed under the heading Fiscal Year 2020 Compensation – Long-Term Incentive Compensation. The equity awards discussed under the heading Fiscal Year 2019 Compensation – Long-Term Incentive Compensation refer to the equity awards made on November 19, 2018, during fiscal year 2019.

 

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The table below differs substantially from the Summary Compensation Table for Fiscal Year 2019 later in this proxy statement in that the equity awards included in the table for fiscal year 2019 below were awarded on November 19, 2019 while the equity awards included in the Summary Compensation Table were granted on November 19, 2018. This supplemental table is not intended as a substitute for the information in the Summary Compensation Table for Fiscal Year 2019, which is required by the SEC.

 

             Incentive Compensation         
Name    Base
Salary
($)(1)
    

Annual
Incentive

Plan
($)(2)

     Value of
Performance
Shares
(target value)
($)(3)
    

Value of
Stock

Options
($)(4)

     Value of
Restricted
Stock/
Units
($)(4)
     Total
($)
 

Alfred F. Kelly, Jr.

  

 

1,400,000

 

  

 

4,270,000

 

  

 

9,125,000

 

  

 

4,562,500

 

  

 

4,562,500

 

  

 

23,920,000

 

Vasant M. Prabhu

  

 

1,000,000

 

  

 

2,440,000

 

  

 

4,250,000

 

  

 

2,125,000

 

  

 

2,125,000

 

  

 

11,940,000

 

Ryan McInerney

  

 

900,000

 

  

 

2,196,000

 

  

 

5,250,000

 

  

 

2,625,000

 

  

 

2,625,000

 

  

 

13,596,000

 

Rajat Taneja

  

 

900,000

 

  

 

2,196,000

 

  

 

5,000,000

 

  

 

2,500,000

 

  

 

2,500,000

 

  

 

13,096,000

 

Kelly Mahon Tullier

  

 

675,000

 

  

 

1,111,725

 

  

 

2,000,000

 

  

 

1,000,000

 

  

 

1,000,000

 

  

 

5,786,725

 

 

(1)

Reflects the NEO’s rate of base salary as of September 30, 2019.

(2)

Reflects the payment pursuant to the annual incentive plan approved by the Compensation Committee in November 2019 and paid on November 15, 2019. These amounts are included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table for Fiscal Year 2019.

(3)

Reflects the dollar value of performance shares approved by the Compensation Committee in November 2019 and awarded on November 19, 2019. Please see the heading Fiscal Year 2019 Compensation – Long-Term Incentive Compensation for additional information regarding these awards.

(4)

Reflects the dollar value of restricted stock units and stock option grants approved by the Compensation Committee in November 2019 and granted on November 19, 2019. The grant date fair value of these awards will be included in the fiscal year 2020 Summary Compensation Table in the proxy statement for the 2021 annual meeting of stockholders. Please see the heading Fiscal Year 2020 Compensation – Long-Term Incentive Compensation for additional information regarding these awards.

Fiscal Year 2019 Compensation

Base Salary

When setting our NEOs’ base pay, the Compensation Committee generally targets the range of compensation paid to similarly situated executive officers of our compensation peer group. The Compensation Committee may set salaries above or below the median amount based on considerations including the expertise, performance or advancement potential of each NEO, including relative to other NEOs. The base salary levels of our NEOs typically are considered annually as part of our performance review process, and upon an NEO’s promotion or other change in job responsibilities.

During its annual review of the base salaries of our NEOs for fiscal year 2019, the Compensation Committee considered:

 

   

market data of our compensation peer group;

 

   

an internal review of each NEO’s compensation, both individually and relative to other NEOs; and

 

   

the individual performance of each NEO.

Based on this review, the Compensation Committee decided that it was appropriate to increase the base salary of Mr. Kelly from $1,300,000 to $1,400,000 for fiscal year 2019. The Compensation Committee made no changes to the base salaries of the other NEOs for fiscal year 2019.

 

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Annual Incentive Plan

 

 

LOGO

Incentive Plan Target Percentage. During fiscal year 2019, each of our NEOs was eligible to earn an annual cash incentive award under the Visa Inc. Incentive Plan, or VIP, which we sometimes refer to as our annual incentive plan. Each NEO’s potential award was expressed as a percentage of his or her base salary, including threshold, target and maximum percentages. After the end of the fiscal year, the Compensation Committee determined the amount of each NEO’s actual annual incentive award based upon the achievement of a combination of pre-determined corporate and individual goals.

The above graphic reflects weightings for our NEOs, except our Chairman and CEO. For our Chairman and CEO, the weightings are: 80% for Corporate Performance and 20% for Individual Performance. These weightings balance the NEOs’ shared responsibility to achieve corporate goals that increase the value of the Company with the desire to motivate them to achieve goals within each individual’s specific area of responsibility. These weightings also allow the Compensation Committee to further differentiate compensation between the NEOs based on their individual performance.

Corporate Goals and Individual Goals.

 

   

In November 2018, the Compensation Committee established corporate threshold goals under the VIP for fiscal year 2019 based on Net Income Growth and Net Revenue Growth, each as adjusted. The threshold corporate performance goals for fiscal year 2019 were Net Income – VIP adjusted, of $6,228 million or Net Revenue Growth – VIP adjusted, of 5.5%.

 

   

No annual incentive payment may be made for fiscal year 2019 under the VIP unless one or both of these goals are achieved.

 

   

This approach further aligns our annual incentive plan program with stockholders’ interests by ensuring that no incentive payment is made unless a certain level of corporate performance is achieved. Once either of the threshold corporate performance goals is met or exceeded, each NEO becomes eligible to receive up to his or her maximum potential annual incentive award. When making final payout determinations, the Compensation Committee may exercise negative discretion to award less than the maximum potential award.

 

   

As the threshold corporate performance levels for both metrics were achieved, fiscal year 2019 annual incentive payments were then based on a combination of corporate and individual performance as described below.

Corporate Performance Measures and Results for Fiscal Year 2019

The Compensation Committee approved the corporate performance weightings, targets and metrics for fiscal year 2019 displayed in the table below. The Compensation Committee also approved a range of payouts as a percentage of each NEO’s target annual bonus at various levels of performance.

 

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Displayed below are the specific performance goals for each level of achievement, the payout ranges as a percentage of target for each level of achievement, the actual fiscal year 2019 result and the approved payout as a percentage of target.

 

Metric

 

  

Weight

 

  

Baseline

 

  

Target

 

  

Exceeding
Target

 

  

Significantly
Exceeding
Target

 

  

Result

 

  

Payout

 

Net Income Growth – VIP adjusted

 

   70%

 

   5.5%

 

   10%-13%

 

   13%-16%

 

   16%+

 

   13.2%

 

   127%

 

 

Net Revenue Growth – VIP adjusted

 

  

 

30%

 

  

 

5.5%

 

  

 

10%-12%

 

  

 

12%-14%

 

  

 

14%+

 

  

 

11.4%

 

  

 

110%

 

 

                    

 

 

Payout as a % of Target

 

       

 

50%-90%

 

  

 

90%-125%

 

  

 

125%-160%

 

  

 

160%-200%

 

       

 

122%

 

For purposes of determining the annual incentive plan payout percentage in fiscal year 2019, our Net Income Growth – VIP adjusted was determined by excluding the aforementioned adjustments from our U.S. GAAP Net Income described in footnote 1 to the table under the heading Fiscal Year 2019 Financial Highlights, as well as other pre-established adjustments such as VIP expenses and net income related to acquisitions closed during fiscal 2019. Based on these pre-established adjustments as well as the exclusion of gains for minority investments resulting from an accounting change in the 2019 fiscal year, for purposes of the annual incentive plan payout percentage in fiscal year 2019, our Net Income Growth – VIP adjusted was 13.2%, which is within the Exceeding Target range and allows for a payout range of 125%-160% of target. The Compensation Committee approved a payout of 127% for this metric. In making this determination, the Committee took into account that actual performance of 13.2% was within the goals established for the “Exceeding Target” range.

Our actual Net Revenue Growth – VIP adjusted for fiscal year 2019 was determined as year-over-year growth in gross operating revenues net of incentives, further adjusted to exclude pre-established adjustments such as the net revenue related to acquisitions closed during fiscal year 2019. The result, as shown above, was 11.4% Net Revenue Growth – VIP adjusted for fiscal year 2019, which is within the Target range and allows for a payout of 90% – 125% of target. The Compensation Committee approved a payout of 110% for this metric. In making this determination, the Committee took into account that actual performance of 11.4% was within the goals established for the “Target” range.

All of the Compensation Committee’s adjustments were made in accordance with the terms of the annual incentive plan determined at the beginning of fiscal year 2019, as described earlier under Setting Performance Goals and Making Compensation Determinations.

Based on the weightings outlined in the above table, the payout result for corporate performance as a percentage of target for fiscal year 2019 was 122%.

Individual Performance Goals and Results for Fiscal Year 2019

The fiscal year 2019 individual goals for each of our NEOs were set in October 2018 through January 2019. The Compensation Committee believes that our NEOs’ performance goals should support and help achieve the Company’s strategic objectives and be tied to their areas of responsibility. Individual performance goals for the Chairman and Chief Executive Officer were established with the oversight of the Compensation Committee. Individual performance goals for the other NEOs were proposed by the Chairman and Chief Executive Officer and reviewed and approved by the Compensation Committee. As described under How our Incentive Program is Tied to our Long-Term Strategy earlier in this proxy statement, these goals were established by reference to our corporate strategic “pillars” which are designed to position the Company competitively and thereby deliver superior performance, which should in turn create value for our stockholders. To ensure that our executive officers stay focused on these pillars, a significant portion of their individual performance goals were tied to one or more of the pillars. Of note, our focus on Developing Best Talent includes goals for our executives to attract and retain top talent, including creating a unique and inclusive environment for our employees, and a commitment to attract, develop and retain diverse employees, including women and underrepresented talent. In addition, our Expanding Access strategic pillar addresses financial inclusion and access goals that enable the Company to help provide a path out of poverty, create productive empowered citizens, foster business opportunities and fuel economic growth around the world.

 

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After the end of the fiscal year, the Compensation Committee, based on each NEO’s self-assessment and Mr. Kelly’s input, reviewed each NEO’s progress against his or her previously identified individual performance goals. Based on this assessment, an NEO could receive an award from 0% to 200% of the individual portion of his or her annual incentive award. When making its award determinations, the Compensation Committee did not assign a specific weighting to any of the individual goals, but instead reviewed each NEO’s progress against his or her individual goals in the aggregate. The following is a summary description of the performance results for each of the NEOs for fiscal year 2019.

 

Mr. Kelly

 

Performance Results

FY2019

Performance

Results

 

•  Performed strongly on financial commitments

 

•  Successfully delivered on key partnerships and improved client engagement

 

•  Continued to build on strong global brand and strong control environment

 

•  Ensured strong succession planning within executive level

 

•  Championed diversity and inclusion and drove high employee engagement

 

Mr. Prabhu

 

 

Performance Results

 

FY2019

Performance

Results

 

•  Performed strongly against financial measures

 

•  Successfully integrated Visa Europe’s finance platform

 

•  Provided leadership on successful acquisitions and improved management and control of expenditures

 

•  Continued to enhance employee engagement, including improvement of tools and processes

 

 

Mr. McInerney

 

 

Performance Results

 

FY2019

Performance

Results

 

•  Performed strongly against financial measures

 

•  Successfully renewed key partnerships and executed on regional and country business strategies

 

•  Expanded access and drove growth in usage of Company’s products globally

 

•  Deepened partnerships through improved client engagement

 

•  Demonstrated progress in attracting, developing and retaining diverse talent

 

 

  Mr. Taneja

 

 

Performance Results

 

FY2019

Performance

Results

 

•  Drove strong security and protection of Company assets through improved technical capabilities

 

•  Demonstrated strong operational excellence, including focus on high systems availability

 

•  Delivered strong support of product innovation priorities

 

•  Enhanced employee engagement, including increased collaboration and improvement of tools and processes

 

 

Ms. Mahon Tullier

 

 

Performance Results

 

FY2019

Performance

Results

 

•  Provided strong leadership on regulatory developments, litigation and investigation matters

 

•  Delivered significantly enhanced data privacy support, governance, and data usage practices

 

•  Drove increased focus on intellectual property strategy to support strategic initiatives

 

•  Continued to drive key diversity and inclusion initiatives

 

•  Successfully led strong corporate governance and shareholder engagement

 

 

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Based on each NEO’s performance in managing their function and the progress they made towards their individual goals as discussed above, the Compensation Committee, in its discretion, determined that each NEO made substantial progress and awarded the individual portion of each officer’s annual incentive at the percentage of target displayed in the table below.

 

  Name

 

  

Percentage of Target for individual
portion

 

 

  Alfred F. Kelly, Jr.

 

  

 

122%

 

 

  Vasant Prabhu

 

  

 

122%

 

 

  Ryan McInerney

 

  

 

122%

 

 

  Rajat Taneja

 

  

 

122%

 

 

  Kelly Mahon Tullier

  

 

122%

Annual Incentive Plan Awards for Fiscal Year 2019

The payouts under our annual incentive plan are computed based on individual and corporate performance, as outlined above. The fiscal year 2019 annual cash incentive award payments are included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table for Fiscal Year 2019, and are set forth in the following table.

The table also provides a supplemental breakdown of the components that make up the NEOs’ actual fiscal year 2019 annual incentive awards. The awards as a percentage of the target are displayed for each component.

 

         
 

Annual

 Base Salary 

  ×      

 Target Annual 

Incentive %

  ×   [      

Corporate

 Performance 

  ×      

Corporate

 Weighting 

  +    

Individual

 Performance 

  ×    

Individual

 Weighting 

  ]   =    

Final

 Award 

 

           Target(1)     Actual
     Annual
Base
Salary
   

Target

Annual

Incentive %

 

Target

Annual Cash

Incentive $

    Corporate         Individual   Final
Award
$
   

Final

Award as %

of Target

     Performance
%
        Factor
Weighting
        Performance
%
  Factor
Weighting

 

Alfred F. Kelly, Jr.

 

 

 

$

 

 

1,400,000

 

 

 

 

 

 

250%

 

 

 

 

 

 

$3,500,000

 

 

 

 

 

 

122%

 

 

 

 

 

 

x

 

 

 

 

 

 

80%

 

 

 

 

 

 

+

 

 

 

 

 

 

122%

 

 

 

×  20%

 

 

 

 

 

 

4,270,000

 

 

 

 

 

 

122%

 

 

Vasant Prabhu

 

 

 

$

 

 

1,000,000

 

 

 

 

 

 

200%

 

 

 

 

 

 

$2,000,000

 

 

 

 

 

 

122%

 

 

 

 

 

 

x

 

 

 

 

 

 

70%

 

 

 

 

 

 

+

 

 

 

 

 

 

122%

 

 

 

×  30%

 

 

 

 

 

 

2,440,000

 

 

 

 

 

 

122%

 

 

Ryan McInerney

 

 

 

$

 

 

900,000

 

 

 

 

 

 

200%

 

 

 

 

 

 

$1,800,000

 

 

 

 

 

 

122%

 

 

 

 

 

 

x

 

 

 

 

 

 

70%

 

 

 

 

 

 

+

 

 

 

 

 

 

122%

 

 

 

×  30%

 

 

 

 

 

 

2,196,000

 

 

 

 

 

 

122%

 

 

Rajat Taneja

 

 

 

$

 

 

900,000

 

 

 

 

 

 

200%

 

 

 

 

 

 

$1,800,000

 

 

 

 

 

 

122%

 

 

 

 

 

 

x

 

 

 

 

 

 

70%

 

 

 

 

 

 

+

 

 

 

 

 

 

122%

 

 

 

×  30%

 

 

 

 

 

 

2,196,000

 

 

 

 

 

 

122%

 

 

Kelly Mahon Tullier

 

 

 

$

 

 

675,000

 

 

 

 

 

 

135%

 

 

 

 

 

 

$   911,250

 

 

 

 

 

 

122%

 

 

 

 

 

 

x

 

 

 

 

 

 

70%

 

 

 

 

 

 

+

 

 

 

 

 

 

122%

 

 

 

×  30%

 

 

 

 

 

 

1,111,725

 

 

 

 

 

 

122%

 

 

(1)

The “threshold” and “maximum” amounts are provided under the Grants of Plan-Based Awards in Fiscal Year 2019 Table.

Long-Term Incentive Compensation

The Visa Inc. 2007 Equity Incentive Compensation Plan, which we refer to as the equity incentive plan, is intended to promote our long-term success and increase stockholder value by attracting, motivating and retaining our non-employee directors, officers, and employees. Additionally, to better align our executive officers’ long-term interests with those of our stockholders, the equity incentive plan does not allow the repricing of stock grants once they are awarded, without prior stockholder approval.

The Compensation Committee administers the equity incentive plan with respect to our NEOs and determines, in its discretion and in accordance with the terms of the equity incentive plan, the recipients who may be granted awards, the form and amount of awards, the terms and conditions of awards (including vesting and forfeiture conditions), the timing of awards, and the form and content of award agreements.

 

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Long-Term Incentive Awards Granted in Fiscal Year 2019

In determining the types and amounts of equity awards to be granted to our NEOs in fiscal year 2019, the Compensation Committee considered factors including the practices of companies in our compensation peer group, the actual compensation levels of similarly situated executive officers of companies in our compensation peer group, corporate and individual performance, recommendations from our Chairman and Chief Executive Officer (for awards to the NEOs other than himself) and each NEO’s total compensation. The Compensation Committee also considered the incentives provided by different award types, including increasing stockholder value, avoiding excessive risk taking and encouraging employee retention. Below is an illustration of our equity grants awarded in fiscal year 2019 by type for our NEOs, including our Chairman and Chief Executive Officer:

Long-Term

Incentive Awards Type

 

 

LOGO

The following table displays the total combined value of equity awards approved by the Compensation Committee for our NEOs in fiscal year 2019, and the award value broken down by component.

 

     

Total

Combined Value of
Equity Awards

($)

 

    

Components of Annual awards granted on
November 19, 2018

 

 
  

Value of
Stock Options
($)

 

    

Value of
Restricted
Stock Units
($)

 

    

 

Value of
Performance

Shares at

Target

($)(1)

 

 
         

Alfred F. Kelly, Jr.

 

    

 

17,250,000     

 

 

    

 

4,312,500   

 

 

    

 

4,312,500  

 

 

    

 

8,625,000  

 

 

 

 

Vasant M. Prabhu

 

    

 

6,500,000     

 

 

    

 

1,625,000   

 

 

    

 

1,625,000  

 

 

    

 

3,250,000  

 

 

 

 

Ryan McInerney

 

    

 

7,300,000     

 

 

    

 

1,825,000   

 

 

    

 

1,825,000  

 

 

    

 

3,650,000  

 

 

 

 

Rajat Taneja

 

    

 

6,850,000     

 

 

    

 

1,712,500   

 

 

    

 

1,712,500  

 

 

    

 

3,425,000  

 

 

 

 

Kelly Mahon Tullier

 

    

 

3,800,000     

 

 

    

 

950,000   

 

 

    

 

950,000  

 

 

    

 

1,900,000  

 

 

 

 

(1)

As the aggregate grant date fair values of the performance shares displayed in the Summary Compensation Table for Fiscal Year 2019 and the Grants of Plan-Based Awards in Fiscal Year 2019 Table later in this proxy statement are computed in accordance with stock-based accounting rules and will be displayed in multiple years, the values in those tables differ from the value displayed in the table above.

 

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Stock Options and Restricted Stock Units

The dollar value of the equity awards in the table above were converted to a specific number of options or restricted stock units on the November 19, 2018 grant date, based on the fair market value of our Class A common stock on that date and the Black-Scholes value of stock options. The stock options and restricted stock units vest in three substantially equal annual installments beginning on the first anniversary of the date of grant, subject to continued employment through each such vesting date.

Performance Shares

The value displayed for performance shares in the table above reflects the target value of the award. The target number of performance shares is determined at the beginning of a three-year performance period and the number of shares earned at the end of the three-year period will range from zero to 200% of the target number of shares depending on our corporate performance, as measured by:

 

   

the annual EPS goal established for each fiscal year; and

 

   

an overall modifier based on Visa’s TSR ranked relative to S&P 500 companies, or TSR Rank, over the three-year performance period.

 

 

LOGO

Impact of Stock Buybacks on EPS

The amount of stock buy-backs are budgeted at the beginning of the year. If Visa repurchased stock significantly above or below this level, the EPS result would be adjusted for the difference.

The TSR Rank Modifier

The TSR Rank modifier will reduce compensation to our NEOs for periods when our stockholders’ value increase is below the median of the companies comprising the S&P 500 and will enhance our NEOs’ compensation for periods when our stockholders’ value increase exceeds the median of the companies comprising the S&P 500. The total number of shares that may be earned at the end of the three-year period is capped at 200% of the target number of shares.

 

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EPS Goals

One-third of the target performance shares awarded on November 19, 2018 were tied to the fiscal year 2019 EPS goal that the Compensation Committee established within the first ninety days of fiscal year 2019. The remaining two-thirds of the target shares awarded are tied to the EPS goals for each of fiscal years 2020 and 2021, which will be set by the Compensation Committee within the first ninety days of the respective fiscal year. The actual EPS result will be used to determine the percentage of target shares credited from each of the three award segments. At the end of fiscal year 2019, the Compensation Committee reviewed our EPS – PS adjusted of $5.45 which was determined by excluding from U.S. GAAP EPS: the aforementioned adjustments from U.S. GAAP Net Income described in footnote 1 to the table under the heading Fiscal Year 2019 Financial Highlights, as well as other adjustments including net income related to acquisitions closed during fiscal 2019. All of the Compensation Committee’s adjustments were made in accordance with terms determined at the beginning of fiscal year 2019, as described earlier under Setting Performance Goals and Making Compensation Determinations. The Compensation Committee determined that the final EPS result – PS adjusted of $5.45 exceeded the target goal of $5.35 for fiscal year 2019. Using the unrounded result to interpolate between target (100%) and maximum (200%) yielded a result of 127% for fiscal year 2019.

At the completion of the entire three-year performance period in November 2021, the shares credited from the above EPS calculations for the three fiscal years will be totaled and the overall number of shares will be modified based on Visa’s TSR Rank for the full three-year period. This TSR Rank modification may increase or decrease the final number of shares earned by a maximum of 25% (see chart below); however, the final number of shares earned at the end of the three-year period, after the modification is applied, is capped at 200% of the initial target number.

 

     

Threshold

Performance

 

Target

Performance

 

Maximum

Performance

Modifying Metric

  

75%

 

100%

 

125%

 

3 Year Visa TSR Rank vs. S&P 500

  

 

25th Percentile or

Below

 

 

50th Percentile(1)

 

 

75th Percentile or

Above

 

(1)

Results between the 25th percentile and the 50th percentile and between the 50th percentile and the 75th percentile are interpolated between 75% and 100% or 100% and 125%, respectively.

 

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The EPS goal for fiscal year 2019 and actual EPS results discussed above also apply to the third portion of the performance shares previously awarded to our NEOs on November 19, 2016 and the second portion of the performance shares previously awarded to our NEOs on November 19, 2017 (see illustration below).

 

 

LOGO

Consistent with Financial Standards Accounting Board ASC Topic 718, the value of the performance share awards for fiscal year 2019 included in the “Stock Awards” column of the Summary Compensation Table for Fiscal Year 2019 later in this proxy statement represents the third segment of the award made on November 19, 2016, the second segment of the award made on November 19, 2017 and the first segment of the award made on November 19, 2018.

Determination of Shares Earned for Performance Shares Previously Awarded on November 19, 2016

The performance shares previously awarded to NEOs on November 19, 2016 completed their three-year performance period following fiscal year 2019. As a result, the Compensation Committee determined and certified the Company’s actual results over the three-year period in October and November 2019, which determined the final number of shares earned pursuant to those awards. As illustrated below, based on the annual EPS results for fiscal years 2017, 2018 and 2019, and our TSR Rank over the three-year period, the performance shares earned equated to 200% of the target award established on November 19, 2016.

 

Primary Metric

 

  

Threshold

($)

 

  

Target

($)

 

  

Maximum

($)

 

  

Result

($)

 

  

EPS Result as %

of Target(1)

 

 

 

Fiscal Year 2017 EPS

 

  

 

3.08

 

  

3.31

 

 

  

3.54

 

 

  

3.49

 

 

  

 

 

 

 

176.4% of Target

 

 

 

 

 

Fiscal Year 2018 EPS

 

  

3.77

 

 

  

4.05

 

 

  

4.33

 

 

  

4.27

 

 

  

 

 

 

 

179.5% of Target

 

 

 

 

 

Fiscal Year 2019 EPS

 

  

4.98

 

 

  

5.35

 

 

  

5.72

 

 

  

5.45

 

 

  

 

 

 

 

127.0% of Target

 

 

 

 

                

 

 

 

 

Average Result

 

                        

 

161.0% of Target

 

 

 

 

(1)

Percentage is based on unrounded values.

 

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Modifying Metric

 

  

Threshold

(75% modifier)

 

  

Target

(100%
modifier)

 

  

Maximum

(125%
modifier)

 

  

Result

 

  

Modifier %

 

 

3 Year TSR Rank v. S&P 500

 

  

 

25th percentile

 

  

 

50th percentile

 

  

 

75th percentile

 

  

 

91st percentile

 

  

 

125%

 

 

Primary Metric Result

 

  

Times

 

  

Modifying Metric