Form DEF 14A Nielsen Holdings plc For: May 21

April 9, 2019 9:04 AM
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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

(Amendment No.      )

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

Nielsen Holdings plc

(Name of Registrant as Specified In Its Charter)

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

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(incorporated and registered in England and Wales with registered no. 09422989)

Registered Office:

Nielsen House

John Smith Drive

Oxford

Oxfordshire

OX4 2WB

United Kingdom

April 9, 2019

Dear Fellow Shareholders,

On behalf of the Board of Directors (the “Board”), I cordially invite you to attend the Annual General Meeting of Shareholders of Nielsen Holdings plc (the “Company” or “Nielsen”) to be held at 9:00 a.m. (Eastern Time) on Tuesday, May 21, 2019 (the “Annual Meeting”). The Annual Meeting will be held online at nielsen.onlineshareholdermeeting.com or, to attend in person, please come to 50 Danbury Road, Wilton, CT 06897.

I am excited to have joined Nielsen at such a pivotal time in the Company’s history. The strength of Nielsen’s franchise and its central importance as a provider of independent measurement to the media and consumer packaged goods industries is clear. Independent third party measurement is an essential element to a fully functioning marketplace and Nielsen has been an objective arbiter for our clients for more than 95 years. We are well-positioned to build on our strengths. As we look to the future, our measurement and analytics will be increasingly valuable to advertisers, advertising agencies, and publishers as they seek to understand and monetize their audiences, and as fast-moving consumer goods manufacturers and retailers seek to understand how they connect with end consumers before, during, and after the purchase.

We combine big data sets with finely tuned and precise opt-in panels to produce the highest quality measurement data and analytics for our clients. This is a significant competitive advantage in this age of privacy, where we hear calls for truth and transparency all over the landscape. As the end markets in media and fast moving consumer goods are changing, our clients’ needs are also changing and so is their use of data and technology. Nielsen is also evolving, but we have the opportunity to accelerate our transformation to serve dynamic industry needs.

This is our vision for 2019 – transforming Nielsen into a truly product-driven, technology-based organization, able to make faster, bolder decisions. In doing so, we expect to increase our value to clients and their decisions, which will drive our performance and shareholder value.

Specifically, we are focused on expanding our digital platform and becoming even more embedded with our clients, aligning on a single cloud-based architecture for each business and retiring legacy systems. We will also leverage artificial intelligence and machine learning to get the most out of our data – our biggest asset – and use it to improve measurement and predictive models to drive better decisions.

Since joining Nielsen, I’ve had a chance to meet with our talent across the Company. From senior leadership to product and commercial leads, we have a great team in place focused on instilling greater operating discipline and accountability. With world class data science and data integration capabilities, we are focusing our best talent on the most important projects to drive speed and scale. On a parallel path, I’ve recently taken on the role of Chief Diversity Officer to strengthen diversity and inclusion across the organization. Inclusion is integral to our strategy and my goal is to be a change agent within our teams.

As our Board continues to work on the strategic review, evaluating potential opportunities to determine the best path forward, we are focused on maximizing value for the Company and all of our shareholders. I am honored to lead this Company into the future.

 

 

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2019 PROXY STATEMENT    LTR

 


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In accordance with the UK Companies Act 2006, the formal notice of the Annual Meeting is set out on the pages following the “Summary of Proxy Statement Information.”

Our proxy materials are first being distributed or made available to shareholders on or about April 9, 2019.

Thank you for your continued support.

Sincerely,

 

 

 

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David Kenny

Chief Executive Officer, Chief Diversity Officer

 

 

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2019 PROXY STATEMENT    LTR2

 


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LETTER FROM OUR EXECUTIVE CHAIRMAN TO OUR SHAREHOLDERS

Dear Shareholders,

On behalf of the Nielsen Board, thank you for your investment in Nielsen. It has been an important and consequential year for Nielsen, with the announcement of a review of strategic alternatives for the Company and its businesses and the appointment of a new senior management team. We believe that our new leadership team has already had a positive impact on the Company and we look forward to sharing with you the results of the strategic review when it is completed. Please be assured that all our decisions are made in the best interests of the Company and its shareholders.

Strategic Review

In September 2018, we announced an expanded strategic review to include a review of the entire Company and its businesses. This includes an assessment of a range of potential strategic alternatives, including continuing to operate as a public, independent company, a separation of our Buy business, which we now refer to as Nielsen Global Connect, from the Watch business, which we now refer to as Nielsen Global Media, or a sale of the entire Company. The Board, with the assistance of our advisors and management team, has been deeply involved in this comprehensive strategic review. We have been meeting frequently to oversee this review and are moving forward with urgency. We will share the results of our review with you as soon as possible.

Leadership Transition

In July 2018, we announced that Mitch Barns, our Chief Executive Officer, would retire by the end of 2018. At that time, we also announced that I would assume the role of Executive Chairman. The Board conducted a comprehensive search for a new Chief Executive Officer, which resulted in the appointment of David Kenny in December 2018. In addition, the Board appointed Dave Anderson as our new Chief Financial Officer in September 2018, later also naming him as Chief Operating Officer. This followed the departure of our former Chief Financial Officer. We are delighted to have both David and Dave on board. Together they’ve brought great energy, vision and focus to the Company. In January 2019, the Board appointed George Callard as the Company’s new Chief Legal Officer. These new senior executives, together with the leaders of our Global Media and Global Connect businesses, are working expeditiously to execute on our strategy and 2019 plan, regardless of the outcome of the strategic review.

Company Strategy

The Board and the Company’s new senior management team are working closely together to establish a solid operational foundation to drive greater revenue growth, profitability and increased shareholder value. The Board fully supports the leadership team’s focus for 2019 on transforming the Company into a product-driven, technology organization, making faster, bolder decisions. We will remain actively involved in overseeing the Company’s long-term path to value creation.

Shareholder Engagement and Outreach

The Board and management believe that remaining connected and accountable to our shareholders is central to Nielsen’s success. Constructive dialogue and regular communication with you promotes transparency and accountability and informs our strategic initiatives and policy development. In 2018, I continued to speak with investors on behalf of the Board. Together with the management team, we engaged with investors that represent nearly 65% of our shareholder base on a range of topics, including our strategic review; our strategy and financial performance; our senior management succession; executive compensation; and a variety of corporate governance matters. We are always happy to hear from our investors, as you are key to Nielsen’s long-term success.

In closing, I want to thank you again for your support and assure you that your Board and the Company’s new senior management team are working to represent your interests and make the right decisions for Nielsen and all of our shareholders.

 

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James A. Attwood, Jr.

Executive Chairman

 

 

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2019 PROXY STATEMENT    LTR3

 


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This summary highlights certain information contained elsewhere in this proxy statement. You should read the complete proxy statement and annexes before voting.

 

 

2018 PERFORMANCE HIGHLIGHTS

We are dedicated to driving shareholder value by posting solid operating performance. The Company’s long-term business performance and progress against strategic initiatives form the context in which pay decisions are made. 2018 was a challenging year for Nielsen. We were disappointed in our 2018 financial results, which fell short of the objectives set at the beginning of the year. We set revised objectives for the second half of the year and delivered on our key operational metrics for the second half of the year, positioning ourselves for 2019.

During 2018:

 

   

We announced a broad review of strategic alternatives for the Company and its businesses.

 

   

We initiated work to reorganize into two new segments, Nielsen Global Media and Nielsen Global Connect, which better reflect our platforms and vision for 2019, setting the stage for improved performance in the future.

 

   

In our Global Media segment, through our Total Audience Measurement framework, we have built a solid foundation using standard, comparable, de-duplicated, cross-platform measurement; we continued to work towards becoming the currency for digital viewing; and we continued to invest in new products, partnerships and acquisitions.

 

   

In our Global Connect segment, we are executing on Total Consumer Measurement; we continue to grow the number of clients using at least one component of Nielsen Connect; our retailer initiatives had good traction; clients continued to prioritize investments in Emerging Markets given strong tailwinds such as population growth, a rising middle class, and urbanization; and our U.S. Connect business continues to drive progress by building stronger, differentiated offerings.

Further information about our 2018 performance can be found on pages 33-35.

 

 

COMPENSATION HIGHLIGHTS

 

   

Our executive compensation program is designed to incent and reward our leadership team for delivering sustained financial performance and long-term shareholder value.

 

   

A significant portion of named executive officer (“NEO”) compensation is at risk, dependent on the achievement of challenging annual and long-term performance goals and/or the performance of our share price.

 

   

Nielsen’s executive compensation philosophy includes a stated emphasis on variable, at-risk compensation. Nielsen’s performance in 2018 was reflected in the following pay outcomes:

 

   

Payouts to NEOs under Nielsen’s Annual Incentive Plan for 2018 were zero.

 

   

Payouts to NEOs and other participants in Nielsen’s performance restricted share unit (“PRSU”) award program for the 2016 – 2018 cycle that matured on December 31, 2018 were zero.

 

 

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2019 PROXY STATEMENT    SUMM1

 


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SUMMARY OF PROXY STATEMENT INFORMATION     

 

 

   

The interim performance evaluation for Nielsen’s 2017 – 2019 PRSU cycle is tracking to pay out at zero. PRSUs represent the single largest component by value of NEO compensation.

 

   

Without his severance pay, Mr. Barns’ reported total compensation in the Summary Compensation Table would have decreased nearly 50% from his 2017 reported total compensation.

 

   

Looking to 2019, we have adjusted the performance metrics in both our long-term and short-term incentive plans to more closely align with driving incremental value for our shareholders.

Further information about our compensation can be found on pages 30-71.

 

 

STRATEGIC REVIEW AND MANAGEMENT TRANSITION

In the second half of 2018, the Board initiated a comprehensive strategic review of the entire Company and its businesses. This review process, which is being conducted with the assistance of financial and legal advisors, includes an assessment of a broad range of potential strategic alternatives including continuing to operate as a public, independent company, a separation of the Company’s Connect or Media segment, or a sale of the Company.

Also in the second half of 2018, the Board conducted a search for a new Chief Executive Officer and Chief Financial Officer, spearheaded by Mr. Attwood, who assumed the title of Executive Chairman on an interim basis to lead the Board’s executive search processes as well as its strategic review of the Company and its businesses. The search processes culminated in the appointment of David Kenny as Chief Executive Officer in December 2018 and Dave Anderson as Chief Financial Officer in September 2018. The Board also appointed George Callard as the Company’s new Chief Legal Officer in January 2019.

 

 

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2019 PROXY STATEMENT    SUMM2

 


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SUMMARY OF PROXY STATEMENT INFORMATION     

 

 

BOARD HIGHLIGHTS

Following the election and re-election of the Board nominees at our Annual Meeting, the Board will have the following characteristics:

 

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BOARD EXPERTISE AND SKILLS

Our directors are keenly focused on building a board that supports Nielsen’s strategic goals and evolving business priorities. In that regard, in addition to the areas of experience set forth below, the qualities that are of paramount importance for our director nominees include: a proven record of success and business judgment, innovative and strategic thinking, a commitment to corporate responsibility, appreciation of multiple cultures and perspectives, and adequate time to devote to their responsibilities.

 

                                       
                                                                       
    CEO/Executive Experience           Business and Operating Experience            

Media and

Marketing

Experience

 

          Innovation, Technology and Digital Experience           Global and Emerging Markets Experience      
                                         
                                         
                                                                       
                                       
                                                                       
   

Consumer

Goods and

Retail Experience

         

Audit and
Risk Oversight Experience and

Financial Literacy

 

           

Research, Analytics, Artificial Intelligence and Data Science Experience

          Financial, M&A and Private Equity Investment Experience           Public Company Board and Governance Experience      
                                         
                                         
                                                                       

 

 

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SUMMARY OF PROXY STATEMENT INFORMATION     

 

 

GOVERNANCE HIGHLIGHTS

 

   

Director Independence

 

  8 out of 9 of our director nominees are independent

 

  All Board committees are fully independent

 

    

Board Accountability

 

  All directors are elected annually

 

  Shareholders representing at least 5% of our share capital have the right to call special meetings, remove and appoint directors

 

  Simple majority vote standard for uncontested director elections

 

            
   

Board Leadership

 

  Independent Executive Chairman

 

    

Board Refreshment

 

  Ongoing Board succession planning

 

  Average tenure of director nominees is 5 years

 

  5 new independent directors elected since 2013

 

            
   

Board Oversight

 

  Ongoing focus on strategic matters, including through standalone strategy sessions

 

  Active leadership of the Company’s strategic review

 

  Directly engaged in management and operations to facilitate effective CEO and CFO transition in 2018

 

  Robust oversight of risk management

 

  Active engagement in talent management, leadership development and CEO succession planning

 

  Regular executive sessions without management present

 

    

Director Engagement

 

  Board held 17 meetings in 2018 with all directors attending at least 88% of Board meetings

 

  Committees held 19 meetings in 2018 with all directors attending at least 86% of applicable meetings

 

  Governance guidelines restrict the number of other board memberships

 

  In connection with the nomination process, directors’ other responsibilities/obligations considered

 

            
   

Share Ownership

 

  Five times their annual cash fees (with a transition period for new directors)

 

  Directors may not hedge their common stock

 

  No director has shares of common stock subject to a pledge

 

  All equity currently granted as director compensation must be held for the director’s entire tenure on the Board

 

    

Director Access

 

  Board and Independent Executive Chairman actively engage with shareholders and solicit different shareholder viewpoints

 

  Directors may contact any employee directly and receive access to any aspect of the business or activities undertaken or proposed by management

 

  Board and its committees may engage independent advisors in their sole discretion

 

  Shareholders may contact any of the committee chairpersons and the independent directors as a group

 

 

 

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2019 PROXY STATEMENT    SUMM4

 


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SUMMARY OF PROXY STATEMENT INFORMATION     

 

 

NOMINEES FOR BOARD OF DIRECTORS

 

 

James A. Attwood, Jr.

 

   

 

Guerrino De Luca

   

 

Karen M. Hoguet

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Age:

60

 

Director since:

2006

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Age:

66

 

Director since:

2017

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Age:

62

 

Director since:

2010


Managing Director, The Carlyle Group

 

 

Executive Chairman

Committees:

Nomination and Corporate Governance

 

   


Chairman of the Board and Former Chief Executive Officer of Logitech International S.A.

 

Committees:

Compensation

   


Former Chief Financial Officer of Macy’s, Inc.

 

Committees:

Audit (Chairperson)

 

David Kenny

 

   

 

Harish Manwani

   

 

Robert C. Pozen

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Age:

57

 

Director since:

2018

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Age:

65

 

Director since:

2015

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Age:

72

 

Director since:

2010


Chief Executive Officer, Nielsen Holdings plc

 

 

Committees:

None

   


Senior Operating Partner/ Global Executive Advisor of The Blackstone Group

 

Committees:

Compensation (Chairperson)

   


Senior Lecturer at MIT

 

 

 

Committees:

Compensation;

Nomination and Corporate Governance (Chairperson)

 

 

David Rawlinson

 

   

 

Javier G. Teruel

   

 

Lauren Zalaznick

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Age:

43

 

Director since:

2017

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Age:

68

 

Director since:

2010

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Age:

56

 

Director since:

2016


SVP & President of Online Business of W.W. Grainger, Inc.

 



Committees:

Audit

   


Partner of Spectron Desarrollo, SC

 

 

Committees:

Audit

   


Former Executive Vice President of NBCUniversal Media, LLC

 

Committees:

Compensation;

Nomination and Corporate Governance

 

 

 

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2019 PROXY STATEMENT    SUMM5

 


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NIELSEN HOLDINGS PLC

NOTICE OF THE 2019 ANNUAL MEETING

WHEN: May 21, 2019 at 9:00 a.m. (Eastern Time)

WHERE: Online via live webcast at nielsen.onlineshareholdermeeting.com or in person at 50 Danbury Road, Wilton, CT 06897. Check-in both online and in person will begin at 8:30 a.m. (Eastern Time), and you should allow ample time for check-in procedures. Whether you attend the meeting online or in person, you will be able to ask questions and vote during the meeting.

RECORD DATE: March 22, 2019

ITEMS OF BUSINESS:

At the Annual Meeting, you will be asked to consider and vote on the resolutions set forth under Proposals 1 to 7 in the “Proposals to be Voted Upon” section below as well as such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. Explanations of the proposed resolutions together with the relevant information for each resolution are given on pages 1 to 78 and Annexes A, B, C and D of this proxy statement.

The Company’s UK annual report and accounts for the year ended December 31, 2018, which consist of the UK statutory accounts, the UK statutory directors’ report, the UK statutory directors’ compensation report, the UK statutory strategic report and the UK statutory auditor’s report (the “UK Annual Report and Accounts”), has been made available to shareholders together with the other proxy materials. There will be an opportunity at the Annual Meeting for shareholders to ask questions or make comments on the UK Annual Report and Accounts and the other proxy materials.

For additional information about our Annual Meeting, shareholders’ rights, proxy voting and access to proxy materials, see the “General Information and Frequently Asked Questions About the Annual Meeting” section on pages 87 to 92 of this proxy statement.

Whether or not you plan to attend the Annual Meeting, it is important that your shares be represented and voted at the meeting. You may vote your shares by proxy on the Internet, by telephone or by completing, signing and promptly returning the proxy card (if you received one) prior to the meeting or by attending the Annual Meeting and voting online or in person.

 

 

PROPOSALS TO BE VOTED UPON1

The Board considers that all the proposals to be put to the Annual Meeting are in the best interest of the Company and its shareholders as a whole.

 

  Proposal

 

      

Board Recommendation    

 

  Proposal No. 1

 

 

Election of Directors2

 

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  for each nominee        

  Proposal No. 2

 

 

Ratification of Independent Registered Public Accounting Firm

 

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  Proposal No. 3

 

 

Reappointment of UK Statutory Auditor

 

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  Proposal No. 4

 

 

Authorization of the Audit Committee to Determine UK Statutory Auditor Compensation

 

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  Proposal No. 5

 

 

Non-Binding, Advisory Vote on Executive Compensation

 

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  Proposal No. 6

 

 

Non-Binding, Advisory Vote on Directors’ Compensation Report

 

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  Proposal No. 7    

 

 

Approval of the Nielsen 2019 Stock Incentive Plan

 

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1    All resolutions above will be proposed as ordinary resolutions.

 

2    A separate resolution will be proposed for each director.

 

 

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NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS     

 

Notes:

 

  1.

In accordance with the Company’s articles of association, all resolutions will be taken on a poll. Voting on a poll means that each share represented in person or by proxy will be counted in the vote. All resolutions will be proposed as ordinary resolutions, which under applicable law means that each resolution must be passed by a simple majority of the total voting rights of shareholders who vote on such resolution, whether in person or by proxy. Explanatory notes regarding each of the proposals (and related resolutions) are set out in the relevant sections of the accompanying proxy materials relating to such proposals.

 

  2.

The results of the polls taken on the resolutions at the Annual Meeting and any other information required by the UK Companies Act 2006 will be made available on the Company’s website as soon as reasonably practicable following the Annual Meeting and for a period of two years thereafter.

 

  3.

To be entitled to attend and vote at the Annual Meeting and any adjournment or postponement thereof, shareholders must be registered in the register of members of the Company at the close of business in New York on March 22, 2019 (the “Record Date”). Changes to the Register of Members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the meeting. If you hold shares through a broker, bank or other nominee, you can attend the Annual Meeting and vote by following the instructions you receive from your bank, broker or other nominee.

 

  4.

Shareholders are entitled to appoint a proxy to exercise all or any of their rights to attend and to speak and vote on their behalf at the Annual Meeting. A shareholder may appoint more than one proxy in relation to the Annual Meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder. A corporate shareholder may appoint one or more corporate representatives to attend and to speak and vote on its behalf at the Annual Meeting. A proxy need not be a shareholder of the Company.

 

  5.

If you are a shareholder of record or hold shares through a broker, bank or other nominee and are voting by proxy through the Internet or by telephone, your vote must be received by 11:59 p.m. (Eastern Time) on May 20, 2019 to be counted. If you are a shareholder of record or hold shares through a broker, bank or other nominee and are voting by mail, your vote must be received by 9:00 a.m. (Eastern Time) on May 17, 2019 to be counted. A shareholder who has returned a proxy instruction is not prevented from attending the Annual Meeting either online or in person and voting if he/she wishes to do so, but please note that only your vote last cast will count. If you hold shares through Nielsen’s 401(k) plan, the plan trustee, Fidelity Management Trust Company, will vote according to the instructions received from you provided that your instructions are received by 11:59 p.m. (Eastern Time) on May 16, 2019. Your instructions cannot be changed or revoked after that time, and the shares you hold through the 401(k) plan cannot be voted online at the Annual Meeting.

 

  6.

Unless you hold shares through Nielsen’s 401(k) plan, you may revoke a previously delivered proxy at any time prior to the Annual Meeting. You may vote online if you attend the Annual Meeting online, or in person if you attend the physical meeting, thereby cancelling any previous proxy.

 

  7.

Shareholders meeting the threshold requirements set out in the UK Companies Act 2006 have the right to require the Company to publish on the Company’s website a statement setting out any matter relating to: (i) the audit of the Company’s accounts (including the auditor’s report and the conduct of the audit) that are to be presented before the Annual Meeting; or (ii) any circumstance connected with the auditor of the Company ceasing to hold office since the previous annual general meeting at which annual accounts and reports were presented in accordance with the UK Companies Act 2006. The Company may not require the shareholders requesting any such website publication to pay its expenses in complying with the UK Companies Act 2006. When the Company is required to place a statement on a website under the UK Companies Act 2006, it must forward the statement to the Company’s auditor not later than the time when it makes the statement available on its website. The business which may be dealt with at the Annual Meeting includes any statement that the Company has been required under the UK Companies Act 2006 to publish on a website.

 

  8.

Pursuant to the Securities and Exchange Commission (“SEC”) rules, the Company’s proxy statement (including this Notice of Annual General Meeting of Shareholders), the Company’s US annual report for the year ended December 31, 2018 (including the Annual Report on Form 10-K for the year ended December 31, 2018), the Company’s UK Annual Report and Accounts and related information prepared in connection with the Annual Meeting are available at: www.proxyvote.com and www.nielsen.com/investors. You will need the 16-digit control number included on your Notice or proxy card in order to access the proxy materials on www.proxyvote.com. These proxy materials will be available free of charge.

 

  9.

You may not use any electronic address provided in this Notice of Annual General Meeting of Shareholders or any related documentation to communicate with the Company for any purposes other than as expressly stated.

 

 

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NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS     

 

 

PROXY VOTING METHODS

Shareholders holding shares of Nielsen on the Record Date may vote their shares by proxy through the Internet, by telephone or by mail or by attending the Annual Meeting online or in person. For shares held through a bank, broker or other nominee, shareholders may vote by submitting voting instructions to the bank, broker or other nominee. To reduce our administrative and postage costs, we ask that shareholders vote through the Internet or by telephone, both of which are available 24 hours a day, seven days a week. Shareholders may revoke their proxies at the times and in the manners described in the “Notes” section of this Notice of Annual General Meeting of Shareholders and the “General Information and Frequently Asked Questions About the Annual Meeting” section on pages 87-92 of this proxy statement.

If you are a shareholder of record or hold shares through a broker, bank or other nominee and are voting by proxy through the Internet or by telephone, your vote must be received by 11:59 p.m. (Eastern Time) on May 20, 2019 to be counted. If you are a shareholder of record or hold shares through a broker, bank or other nominee and are voting by mail, your vote must be received by 9:00 a.m. (Eastern Time) on May 17, 2019 to be counted.

If you hold shares through Nielsen’s 401(k) plan, the plan trustee, Fidelity Management Trust Company, will vote according to the instructions received from you provided that your instructions are received by 11:59 p.m. (Eastern Time) on May 16, 2019. Your instructions cannot be changed or revoked after that time, and the shares you hold through the 401(k) plan cannot be voted at the Annual Meeting.

TO VOTE BY PROXY:

 

      

 

LOGO   BY INTERNET

 
         

 

LOGO   BY TELEPHONE

 
        

 

LOGO   BY MAIL

 
             

  Go to the website www.proxyvote.com 24 hours a day, seven days a week (before the meeting) or nielsen.onlineshareholdermeeting
.com (during the meeting) and follow the instructions.

 

  You will need the 16-digit control number included on your Notice or proxy card in order to vote online.

 

       

  From a touch-tone phone, dial
1-800-690-6903 and follow the recorded instructions, 24 hours a day, seven days a week.

 

  You will need the 16-digit control number included on your Notice or proxy card in order to vote by telephone.

      

  Mark your selections on your proxy card (if you received one).

 

  Date and sign your name exactly as it appears on your proxy card.

 

  Mail the proxy card in the postage-paid envelope that is provided to you.

YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.

April 9, 2019

By Order of the Board of Directors,

 

LOGO

Emily Epstein

Company Secretary

Registered Office: Nielsen House, John Smith Drive, Oxford, OX4 2WB, United Kingdom

Registered in England and Wales No. 09422989

 

 

LOGO

  

2019 PROXY STATEMENT    NOT3

 


Table of Contents

 

    

 

LOGO

 

1

 

  

Proposal No. 1 Election of Directors

 

1

 

  

Ongoing Board Succession Planning

 

2

 

  

Director Nomination Process

 

4

 

  

Nominees for Election to the Board of Directors

 

9

 

  

The Board of Directors and Certain Governance Matters

 

9

 

  

Director Independence and Independence Determinations

 

10

 

  

Leadership Structure

 

10

 

  

Board Committees and Meetings

 

11

 

  

Committee Membership and Responsibilities

 

13

 

  

Board and Committee Evaluations

 

13

 

  

Our Board’s Commitment to Shareholder Engagement

 

15

 

  

Communications with Directors

 

15

 

  

Global Responsibility and Sustainability

 

18

 

  

Director Education

 

19

 

  

Risk Oversight

 

20

 

  

Executive Succession Planning

 

20

 

  

Executive Sessions

 

20

 

  

Committee Charters and Corporate Governance Guidelines

 

21

 

  

Code of Conduct and Procedures for Reporting Concerns about Misconduct

 

22

 

  

Executive Officers of the Company

 

23

 

   Proposal No. 2 Ratification of Independent Registered Public Accounting Firm
23

 

  

Audit and Non-Audit Fees

 

24

 

  

Audit Committee Pre-Approval Policies and Procedures

 

24

 

  

Audit Committee Report

 

26

 

  

Proposal No. 3 Reappointment of UK Statutory Auditor

 

27

 

  

Proposal No.  4 Authorization of the Audit Committee to Determine UK Statutory Auditor Compensation

 

28

 

  

Proposal No.  5 Non-Binding, Advisory Vote on Executive Compensation

 

30

 

  

Executive Compensation

 

31

 

  

Compensation Discussion and Analysis

 

55

 

  

Compensation Committee Report

 

56

 

  

Tables and Narrative Disclosure

 

72

 

  

Proposal No.  6 Non-Binding, Advisory Vote on Directors’ Compensation Report

 

73

 

  

Proposal No. 7 Approval of the Nielsen 2019 Stock Incentive Plan

 

79

 

  

Equity Compensation Plan Information

 

80

 

  

Director Compensation

 

80

 

  

Director Compensation for the 2018 Fiscal Year

 

82

 

  

Ownership of Securities

 

84

 

  

Section 16(a) Beneficial Ownership Reporting Compliance

 

84

 

  

Certain Relationships and Related Party Transactions

 

85

 

  

Shareholder Proposals for the 2020 Annual General Meeting of Shareholders

 

85

 

  

Householding of Proxy Materials

 

85

 

  

Annual Reports and Proxy Materials

 

86

 

  

Form 10-K

 

86

 

  

Other Business

 

 

87

 

  

General Information and Frequently Asked Questions About the Annual Meeting

 

92

 

  

Company Information and Mailing Address

 

92

 

  

Important Notice Regarding the Availability of Proxy Materials for the Annual General Meeting of Shareholders to be Held on May 21, 2019

 

A-1

 

  

Annex A – Directors’ Compensation Report

 

B-1

 

  

Annex B – Directors’ Compensation Policy

 

C-1

 

  

Annex C – Information Regarding Non-GAAP Financial Measures

 

D-1

 

  

Annex D – Nielsen 2019 Stock Incentive Plan

 

 

 

 

 

LOGO

  

2019 PROXY STATEMENT    TOC

 


Table of Contents

LOGO

Acting upon the recommendation of its Nomination and Corporate Governance Committee, our Board has nominated the persons identified herein for election or re-election as directors. Directors will hold office until the end of the next annual general meeting of shareholders and the election and qualification of their successors or until their earlier resignation, removal, disqualification or death.

It is intended that the proxies delivered pursuant to this solicitation will be voted in favor of the election or re-election of these nominees, except in cases of proxies bearing contrary instructions. In the event that these nominees should become unavailable for election or re-election due to any presently unforeseen reason, the persons named in the proxy will have the right to use their discretion to vote for a substitute.

 

 

ONGOING BOARD SUCCESSION PLANNING

Our Nomination and Corporate Governance Committee seeks to ensure that our Board as a whole possesses the objectivity and the mix of skills and experiences to provide effective oversight and guidance to management to execute on the Company’s long-term strategy. The Nomination and Corporate Governance Committee assesses potential candidates based on their history of achievement, the breadth of their experiences, whether they bring specific skills or expertise in areas that the Nomination and Corporate Governance Committee has identified, and whether they possess personal attributes that will contribute to the effective functioning of the Board.

Ongoing Board refreshment provides fresh perspectives while leveraging the institutional knowledge and historical perspective of our longer-tenured directors. The Nomination and Corporate Governance Committee also considers succession planning for roles such as Board and committee chairpersons for purposes of continuity and to maintain relevant expertise and depth of experience.

 

 

LOGO

  

2019 PROXY STATEMENT    1

 


Table of Contents

 

ELECTION OF DIRECTORS     

 

 

 

DIRECTOR NOMINATION PROCESS

Our Nomination and Corporate Governance Committee uses the following process to identify and add new directors to the Board:

 

LOGO

Our Nomination and Corporate Governance Committee is authorized to use an independent search firm to help identify, evaluate and conduct due diligence on potential director candidates. Using an independent search firm helps the Nomination and Corporate Governance Committee ensure that it is conducting a broad search and helps it to consider a diverse slate of candidates with the qualifications and expertise that are needed to provide effective oversight of management and assist in long-term value creation.

Diversity Policy

The charter of our Nomination and Corporate Governance Committee requires the Nomination and Corporate Governance Committee to consider all factors it deems appropriate, which may include age, gender, nationality and ethnic and racial background in nominating directors and to review and make recommendations, as the Nomination and Corporate Governance Committee deems appropriate, regarding the composition and size of the Board to ensure the Board has the requisite expertise and its membership consists of persons with sufficiently diverse and independent backgrounds. Over time, the Nomination and Corporate Governance Committee and the Board as a

 

 

LOGO

  

2019 PROXY STATEMENT    2

 


Table of Contents

 

ELECTION OF DIRECTORS     

 

whole will assess the effectiveness of this policy and determine, how, if at all, our implementation of the policy, or the policy itself, should be changed.

Nomination Process

In considering whether to recommend nomination or re-nomination of each of our directors for election at the Annual Meeting, our Nomination and Corporate Governance Committee reviews the experience, qualifications, attributes and skills of our current directors to determine the extent to which those qualities continue to enable our Board to satisfy its oversight responsibilities effectively in light of our evolving business. In determining to nominate the directors named herein for election at the Annual Meeting, the Nomination and Corporate Governance Committee has focused on our current directors’ valuable contributions in recent years, the criteria set forth in “Board Expertise and Skills” in the “Summary of Proxy Statement Information” and the information discussed in the biographies set forth below under “Nominees for Election to the Board of Directors.” In addition, the Nomination and Corporate Governance Committee considered each director’s additional responsibilities and affiliations and the extent to which they could continue to contribute to the success of our Board.

In accordance with our articles of association, shareholders may request that director nominees submitted by such shareholders be included in the agenda of our Annual Meeting through the process described under “Shareholder Proposals for the 2020 Annual General Meeting of Shareholders.” The Nomination and Corporate Governance Committee considers shareholder recommendations for director candidates and evaluates such candidates with the same standards as it does for other Board candidates. The Nomination and Corporate Governance Committee will advise the Board whether to recommend shareholders to vote for or against such shareholder nominated candidates.

 

 

LOGO

  

2019 PROXY STATEMENT    3

 


Table of Contents

 

ELECTION OF DIRECTORS     

 

 

 

NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS

The following information describes the names, ages as of March 31, 2019, and biographical information of each nominee. Beneficial ownership of equity securities of the nominees is shown under “Ownership of Securities.”

 

                                            

 

  James A. Attwood, Jr.

 

 

Director since  2006

 

  

Age  60    

 

 

           LOGO


Executive Chairman

 

Nielsen

Committees:

Nomination and

Corporate

Governance

 

Other public company directorships:

  
 

   Current:

    Syniverse Holdings, Inc.

    CoreSite Realty Corporation

 

   Past 5 years:

    Getty Images, Inc.

  
 

 

Key Experience and Qualifications

 

   Financial expertise (mathematics and statistics)

 

   Media/telecommunications/technology expertise and deep management experience at The Carlyle Group

 

   Public company board experience

 

   Private equity investment expertise in the media industry

 

Mr. Attwood has served on Nielsen’s Board since 2006 and has served as Chairman of the Board since January 1, 2016. He served as Lead Independent Director of the Board from January 1, 2015 through December 31, 2015. Beginning on July 26, 2018, Mr. Attwood assumed the title of Executive Chairman on an interim basis to lead the Board’s search process to identify a new Chief Executive Officer as well as to oversee the Board’s strategic review. As Executive Chairman, Mr. Attwood remains an independent member of Nielsen’s Board. He is not a Nielsen employee and has no day-to-day responsibilities for the Company’s business. Mr. Attwood is a Managing Director of The Carlyle Group and the former Head of the Global Telecommunications, Media, and Technology Group. Prior to joining The Carlyle Group in 2000, Mr. Attwood was with Verizon Communications, Inc. and GTE Corporation. Prior to GTE Corporation, he was with Goldman, Sachs & Co.

      

 

  Guerrino De Luca

 

 

Director since  2017

 

  

Age  66    

 

LOGO


Nielsen

Committees:

Compensation

 

Other public company directorships:

  
 

   Current:

    Logitech International S.A.

 

   Past 5 years:

    None

  
 

 

Key Experience and Qualifications

 

   Chief Executive Officer experience and public company board experience at Logitech International S.A.

 

   Consumer insights, technology, innovation, strategy and marketing experience

 

   Global markets and general management experience

 

Mr. De Luca has served as the Chairman of the Board of Logitech International S.A. since January 2008. Mr. De Luca joined Logitech International S.A. in 1998 and served as its President and Chief Executive Officer from February 1998 to December 2007 and as acting President and Chief Executive Officer from July 2011 to December 2012. Prior to joining Logitech International S.A., Mr. De Luca served as Executive Vice President of Worldwide Marketing for Apple Computer, Inc.

 

 

LOGO

  

2019 PROXY STATEMENT    4

 


Table of Contents

 

ELECTION OF DIRECTORS     

 

 

                                            

 

  Karen M. Hoguet

 

 

Director since  2010

 

  

Age  62    

 

LOGO


Nielsen

Committees:

Audit (Chairperson)

 

 

Other public company directorships:

  
 

  Current:

None

 

   Past 5 years:

The Chubb Corporation

  
 

 

Key Experience and Qualifications

 

   Audit and risk oversight experience

 

   Senior management and public company experience at Macy’s, Inc.

 

   Retail and commercial experience

 

Ms. Hoguet served as the Chief Financial Officer of Macy’s, Inc. from October 1997 until July of 2018 when she became a strategic advisor to the Chief Executive Officer until her retirement on February 1, 2019. Ms. Hoguet serves on the Board of Directors of Hebrew Union College and UCHealth.

      

 

  David Kenny

 

 

Director since  2018

 

  

Age  57    

 

LOGO


Nielsen

Committees:

None

 

Other public company directorships:

  
 

  Current:

Best Buy Co., Inc.

 

   Past 5 years:

None

  
 

 

Key Experience and Qualifications

 

   Data science and Artificial Intelligence

 

   Retail, marketing and media expertise

 

   Innovation, technology and digital experience

 

   Chief Executive Officer and public company board experience

 

Mr. Kenny has been the Chief Executive Officer of Nielsen since December 3, 2018. Prior to that time, Mr. Kenny served as Senior Vice President of Cognitive Solutions at IBM, joining IBM in January 2016, after its acquisition of The Weather Company’s Product and Technology Business. Previously, from January 2012 until 2016, Mr. Kenny served as Chairman and Chief Executive Officer of The Weather Company. Prior to The Weather Company, Mr. Kenny was President of Akamai, the cloud service provider, and the co-founder, Chairman and Chief Executive Officer of the digital marketing agency Digitas, which was a Nasdaq listed company before its sale to Publicis Groupe in 2007. Mr. Kenny began his career as a consultant at Bain & Company, where he rose to the Partner level. Mr. Kenny serves on the Board of Directors of Teach for America.

 

 

LOGO

  

2019 PROXY STATEMENT    5

 


Table of Contents

 

ELECTION OF DIRECTORS     

 

 

                                            

 

  Harish Manwani

 

    

Director since  2015

 

  

Age  65    

 

LOGO


Nielsen

Committees:

Compensation
(Chairperson)

 

 

Other public company directorships:

  
 

   Current:

    Qualcomm Incorporated

    Whirlpool Corporation

    Gilead Sciences, Inc.

    

   Past 5 years:

    Pearson plc

    Hindustan Unilever Limited

  
 

 

Key Experience and Qualifications

 

   Global and emerging markets operating experience at Unilever, plc

 

   Consumer packaged goods experience

 

   Executive management and board experience at public companies

 

   Wide ranging international and general experience in managing a global business

 

Mr. Manwani has been a Senior Operating Partner/Global Executive Advisor for the Blackstone Group since February 2015. He retired from Unilever plc, a leading global consumer products company, at the end of 2014, where he served as the global Chief Operating Officer since September 2011. Mr. Manwani joined Hindustan Unilever Limited (a majority-owned subsidiary of Unilever) in 1976. Through his career, he held positions of increasing responsibility at Unilever which gave him wide ranging international and general management experience. Mr. Manwani is also a member of the Board of Tata Sons Private Limited and the Chairman of the Executive Board of the Indian School of Business.

         

 

  Robert C. Pozen

 

    

Director since  2010

 

  

Age  72    

 

LOGO


Nielsen

Committees:

Compensation;

Nomination and

Corporate

Governance

(Chairperson)

 

 

Other public company directorships:

  
 

   Current:

    None

    

   Past 5 years:

    Medtronic Public Limited Company

  
 

 

Key Experience and Qualifications

 

   Governance and public policy expertise

 

   Financial and financial reporting expertise

 

   Public company board experience

 

From July 1, 2010 through December 31, 2011, Mr. Pozen was Chairman Emeritus of MFS Investment Management. Prior to that, he was Chairman of MFS Investment Management since February 2004. He previously was Secretary of Economic Affairs for the Commonwealth of Massachusetts in 2003. Mr. Pozen was also the John Olin Visiting Professor, Harvard Law School from 2002 to 2004 and the Chairman of the SEC Advisory Committee on Improvements to Financial Reporting from 2007 to 2008. From 1987 through 2001, Mr. Pozen worked for Fidelity Investments in various jobs, serving as President of Fidelity Management and Research Co. from 1997 through 2001. He is currently a director of AMC, a subsidiary of the International Finance Corporation, a senior lecturer at MIT Sloan School of Management, a non-resident fellow of the Brookings Institution, a member of the Advisory Board of Perella Weinberg Partners and Chairman of the Leadership Council of the Tax Policy Committee.

 

 

LOGO

  

2019 PROXY STATEMENT    6

 


Table of Contents

 

ELECTION OF DIRECTORS     

 

 

                                            

 

  David Rawlinson

 

 

Director since  2017

 

  

Age  43    

 

LOGO


Nielsen

Committees:

Audit

 

Other public company directorships:

  
 

   Current:

    MonotaRO Co., Ltd.

 

   Past 5 years:

    None

  
 

 

Key Experience and Qualifications

 

   Digital, innovation and technology experience

 

   E-commerce commercial, brand and marketing experience

 

   Global operating experience

 

Mr. Rawlinson is the SVP & President of the Online Business of W.W. Grainger, Inc., where he also previously served as the Vice President for Operations for the Online Business. From July 2012 until August 2015, he was Grainger’s Vice President, Deputy General Counsel and Corporate Secretary. From November 2009 until July 2012, Mr. Rawlinson was Vice President, General Counsel and Director of Corporate Responsibility of a division of ITT Exelis, formerly ITT Corporation. Prior to ITT Exelis, Mr. Rawlinson served as a White House Fellow and in appointed positions for the George W. Bush and Obama Administrations. In the Bush Administration, he was a leader of the outgoing transition. In the Obama Administration, he served as Senior Advisor for Economic Policy at the White House National Economic Council.

      

 

  Javier G. Teruel

 

 

Director since  2010

 

  

Age  68    

 

LOGO


Nielsen

Committees:

Audit

 

Other public company directorships:

  
 

   Current:

    Starbucks Corporation

    J.C. Penney Company, Inc.

 

   Past 5 years:

    None

  
 

 

Key Experience and Qualifications

 

   Consumer packaged goods experience

 

   Global operating experience, including as Vice Chairman of Colgate-Palmolive Company

 

   Public company board experience

 

Mr. Teruel is a Partner of Spectron Desarrollo, SC, an investment management and consulting firm; Chairman of Alta Growth Capital, a private equity firm; and a majority owner of Mexican investment firm, Desarrollo Empresarial Sebara SA de CV. Previously, Mr. Teruel served as Vice Chairman of Colgate-Palmolive Company, from July 2004 to April 2007. Prior to being appointed Vice Chairman, he served in positions of increasing importance at Colgate since 1971, including as Executive Vice President responsible for Asia, Central Europe, Africa and Hill’s Pet Nutrition, as Vice President of Body Care in Global Business Development in New York, as President and General Manager of Colgate-Mexico, as President of Colgate-Europe, and as Chief Growth Officer responsible for the company’s growth functions.

 

 

LOGO

  

2019 PROXY STATEMENT    7

 


Table of Contents

 

ELECTION OF DIRECTORS     

 

 

                                            

 

  Lauren Zalaznick

 

 

Director since  2016

 

  

Age  56    

 

LOGO


Nielsen

Committees:

Compensation;

Nomination and
Corporate
Governance

 

Other public company directorships:

  
 

   Current:

    GoPro, Inc.

    RTL Group

 

   Past 5 years:

    None

  
 

 

Key Experience and Qualifications

 

   Media expertise, including at NBCUniversal Media, LLC

 

   Digital, innovation and technology experience

 

   Commercial, management and marketing expertise

 

   Deep consumer insights expertise

 

Ms. Zalaznick is currently a senior strategic advisor to leading media and digital companies. From 2004 through December 2013, Ms. Zalaznick held various roles of increasing responsibility within NBCUniversal Media, LLC. In 2010 she became Chairman, Entertainment & Digital Networks and Integrated Media. In that capacity she had responsibility for the cable entertainment networks Bravo Media, Oxygen Media, and The Style Network; the Telemundo Spanish language broadcast network; and she ran the company’s digital portfolio. She was promoted to Executive Vice President at Comcast NBCUniversal until departing the company at the end of 2013. Ms. Zalaznick is currently a member of the Board of Directors of Critical Content. She is a senior advisor to The Boston Consulting Group, TMT practice, and to leading content and tech start-ups, including Refinery29, Atlas Obscura, Fatherly.com and Gimlet Media.

The nominees for election to the Board of Directors named above are hereby proposed for appointment and reappointment by the shareholders.

 

LOGO    The Board of Directors recommends that shareholders vote “FOR” the election of each of the nominees named above.

 

 

LOGO

  

2019 PROXY STATEMENT    8

 


Table of Contents

LOGO

Pursuant to our articles of association and in accordance with the UK Companies Act 2006, our directors are responsible for the management of the Company’s business, for which purpose they may exercise all the powers of the Company.

Our Board conducts its business through meetings of the Board and three standing committees: Audit, Compensation and Nomination and Corporate Governance. In accordance with the New York Stock Exchange (“NYSE”) rules and the rules promulgated under each of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), a majority of our Board consists of independent directors, and our Audit, Compensation and Nomination and Corporate Governance Committees are fully independent.

Each director owes a duty to the Company to properly perform the duties assigned to him or her and to act in the best interest of the Company. Under English law, this requires each director to act in a way he or she considers, in good faith, would be most likely to promote the success of the Company for the benefit of its shareholders as a whole, and in doing so have regard (among other matters) for the likely consequences of any decision in the long-term, the interests of the Company’s employees, the Company’s business relationships with suppliers, customers and others, the impact of the Company’s operations on the community and the environment and the need to act fairly amongst shareholders. The Company’s directors are expected to be appointed for one year and may be re-elected at the next Annual Meeting.

 

 

DIRECTOR INDEPENDENCE AND INDEPENDENCE DETERMINATIONS

Under the NYSE rules and our Corporate Governance Guidelines, a director is not independent unless the Board affirmatively determines that he or she does not have a direct or indirect material relationship with the Company or any of its subsidiaries. Heightened independence standards apply to members of the Audit and Compensation Committees.

The NYSE independence definition includes a series of objective tests, such as that the director is not an employee of the Company and has not engaged in various types of business dealings with the Company. The Board is also responsible for determining affirmatively, as to each independent director, that no relationships exist which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, the Board will broadly consider all relevant facts and circumstances, including information provided by the directors and the Company with regard to each director’s business and personal activities as they may relate to the Company and the Company’s management. As the concern is independence from management and pursuant to the view articulated by the NYSE, ownership of a significant amount of stock, by itself, is not a bar to an independence finding.

The Board undertook its annual review of director independence and affirmatively determined that, except for Mr. Kenny, each of our directors is independent under Section 303A.02 of the NYSE listing rules and under our Corporate Governance Guidelines for purposes of board service. In addition, the Board affirmatively determined that the Audit Committee, the Compensation Committee, and the Nomination and Corporate Governance Committee members are fully independent under the SEC and NYSE independence standards specifically applicable to such committees.

In making the director independence determinations, the Board considered the following:

 

   

Mr. Teruel indirectly holds approximately 6% of the capital stock of a private entity in which Nielsen invested $3.25 million, which at the time of investment represented approximately 15.6% of such entity’s capital stock. Nielsen has a board seat on, and a commercial arrangement with, this entity.

 

 

LOGO

  

2019 PROXY STATEMENT    9

 


Table of Contents

 

THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS  

 

 

 

LEADERSHIP STRUCTURE

Under our Corporate Governance Guidelines, the Board must select its chairperson from its members in any way it considers in the best interest of the Company. Beginning on July 26, 2018, Mr. Attwood assumed the title of Executive Chairman on an interim basis to lead the Board’s search process to identify a new Chief Executive Officer as well as to oversee the Board’s strategic review. As Executive Chairman, Mr. Attwood remains an independent member of Nielsen’s Board. He is not a Nielsen employee and has no day-to-day responsibilities for the Company’s business. From January 1, 2016 to July 26, 2018, Mr. Attwood served as the Board’s non-executive, independent Chairperson. In light of Mr. Attwood’s independence from the Company, the Company does not currently have a Lead Independent Director. As noted further below, each Board committee also has a non-executive, independent chairperson. Our Board believes our leadership structure best encourages the free and open dialogue of competing views and provides for strong checks and balances.

 

 

BOARD COMMITTEES AND MEETINGS

Our Board has established the following committees: an Audit Committee, a Compensation Committee and a Nomination and Corporate Governance Committee. The current composition and responsibilities of each committee are described below. Members serve on these committees until they no longer serve on the Board or until otherwise determined by our Board.

 

  Name of Independent Director

 

  

Audit Committee

 

  

Compensation Committee

 

  

Nomination and Corporate
Governance Committee

 

James A. Attwood, Jr.

 

            

 

 
       

Guerrino De Luca

 

       

 

 
    

Karen M. Hoguet

 

   Chairperson

 

         

Harish Manwani

 

        Chairperson

 

    

Robert C. Pozen

 

       

 

 
   Chairperson

 

David Rawlinson

 

  

 

 
         

Javier G. Teruel

 

  

 

 
         

Lauren Zalaznick

 

       

 

 
  

 

 

Pursuant to our Corporate Governance Guidelines, all directors are expected to make every effort to attend all meetings of the Board and meetings of the committees of which they are members. All directors are also welcome to attend meetings and review materials of those committees of which they are not members. During 2018, the Board held 17 meetings and 19 committee meetings. Each director attended 88% or more in the aggregate of 2018 Board meetings and 86% or more of the total number of 2018 meetings of those committees on which each such director served and that were held during the period that such director served. All non-executive directors are encouraged (but not required) to attend the Annual Meeting and each extraordinary general meeting of shareholders. Six of our current directors who served at the time of our 2018 Annual Meeting, attended this meeting.

During the second half of 2018 and into 2019, the Board, with the assistance of our advisors and management team, has been deeply involved in a broadened comprehensive strategic review of the entire Company and its businesses, which we announced in September 2018. The Board, as well as a subset of independent directors, has been meeting regularly to receive updates and to provide input into the process.

 

 

LOGO

  

2019 PROXY STATEMENT    10

 


Table of Contents

 

THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS

 

 

 

COMMITTEE MEMBERSHIP AND RESPONSIBILITIES

 

 

                 
    

 

Members:

  Karen M. Hoguet (Chairperson)

  David Rawlinson

  Javier G. Teruel

 

Independence:

All members are independent.

 

Audit Committee Financial Expert:

All members qualify as “audit                 committee financial experts” and meet NYSE financial literacy and expertise requirements.

 

Meetings in Fiscal Year 2018:

7

           

 

 

Audit Committee

 

Key Responsibilities:

 

   External auditor. Appointing our external auditors, subject to shareholder vote as may be required under English law, overseeing the external auditors’ qualifications, independence and performance, discussing relevant matters with the external auditors and providing preapproval of audit and permitted non-audit services to be provided by the external auditors and related fees;

 

   Financial reporting. Supervising and monitoring our financial reporting and reviewing with management and the external auditor Nielsen’s annual and quarterly financial statements;

 

   Internal audit function. Overseeing our internal audit process and our internal audit function;

 

   Internal controls, risk management and compliance programs. Overseeing our system of internal controls, our enterprise risk management program (including cyber security) and our compliance with relevant legislation and regulations; and

 

   Information security, technology and privacy & data protection. Evaluating updates received at least quarterly from the Company’s Chief Information Officer regarding the Company’s information, technology and data protection security systems, its preparedness in preventing, detecting and responding to breaches, and any incidents and related response efforts, to then report to the Board.

              

 

 

LOGO

  

2019 PROXY STATEMENT    11

 


Table of Contents

 

THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS

 

 

                 
    

 

Members:

  Harish Manwani (Chairperson)

  Guerrino De Luca

  Robert C. Pozen

  Lauren Zalaznick

 

Independence:

All members are independent.              

 

Meetings in Fiscal Year 2018:

7

   

 

Compensation Committee

 

Key Responsibilities:

 

   Executive compensation. Setting, reviewing and evaluating compensation, and related performance and objectives, of our senior management team;

 

   Incentive and equity-based compensation plans. Reviewing and approving, or making recommendations to our Board with respect to, our incentive and equity-based compensation plans and equity-based awards;

 

   Compensation-related disclosure. Overseeing compliance with our compensation-related disclosure obligations under applicable laws;

 

   Director compensation. Assisting our Board in determining the individual compensation for our directors within the framework permitted by the general compensation policy approved by our shareholders (the “Directors’ Compensation Policy”); and

 

   Talent development/employee engagement. Overseeing leadership development and employee experience, including recruitment, development, advancement and retention.

 

Compensation Committee Interlocks and Insider Participation: None of the current members of the Compensation Committee is a former or current officer or employee of the Company or any of its subsidiaries. No Compensation Committee member has any relationship required to be disclosed under this caption under the rules of the SEC.

              

 

                 
    

 

Members

  Robert C. Pozen (Chairperson)

  James A. Attwood, Jr.

  Lauren Zalaznick

 

Independence:

All members are independent.              

 

Meetings in Fiscal Year 2018:

5

   

 

Nomination and Corporate Governance Committee

 

Key Responsibilities:

 

  Director nomination. Determining selection criteria and appointment procedures for our Board and committee members and making recommendations regarding nominations and committee appointments to the full Board;

 

  Board composition. Periodically assessing the scope and composition of our Board and its committees;

 

  Succession planning. Developing and overseeing succession planning and talent management for CEO, other senior leadership positions and directors;

 

  Corporate governance. Advising the Board on corporate governance matters and overseeing the Company’s corporate responsibility and sustainability strategy; and

 

  Board and Committee evaluations. Developing and overseeing the evaluation process for our Board and its committees.

              

 

 

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BOARD AND COMMITTEE EVALUATIONS

Our Board recognizes that a thorough, constructive evaluation process enhances our Board’s effectiveness and is an essential element of good corporate governance. Accordingly, our Nomination and Corporate Governance Committee develops and oversees the evaluation process to ensure that the full Board and each committee conducts an assessment of its performance and functioning and solicits feedback for enhancement and improvement.

This year, our Nomination and Corporate Governance Committee engaged an independent third party, experienced in corporate governance matters, to interview each director to obtain his or her assessment of the effectiveness of the Board and its committees. The interview process is expected to begin in April 2019. The Nomination and Corporate Governance Committee Chairperson will instruct the third party on the particular criteria to be covered in the assessment, such as conduct of the meetings and committees, leadership and process. Each director will be asked to identify any opportunities the Board can focus on to enhance its effectiveness. In addition, the third party will seek input from each director as to the performance of the other Board members. The third party organizes the director feedback and is expected to review it with the Nomination and Corporate Governance Committee and the Board in July. The Nomination and Corporate Governance Committee Chairperson is expected to lead a discussion to determine which areas the Board would like to focus on during the coming year to enhance its effectiveness. Finally, the Nomination and Corporate Governance Committee Chairperson will engage the Board in a follow-up discussion to gauge the Board’s satisfaction with the progress made in addressing any focus areas that were identified by the Board in its evaluation.

 

 

OUR BOARD’S COMMITMENT TO SHAREHOLDER ENGAGEMENT

Why We Engage

Our Board and management team recognize the benefits of regular engagement with our shareholders in order to remain attuned to their different perspectives on the matters affecting Nielsen.

Robust dialogue and engagement efforts allow our Board and management the opportunity to:

 

   

consider the viewpoints of our shareholders and the issues that are important to them in connection with their oversight of management and the Company;

 

   

discuss developments in our business and provide transparency and insight about our strategy and performance; and

 

   

assess issues, existing or emerging, that may affect our business, corporate responsibility and governance practices.

 

 

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How We Engage

 

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Outcomes from Investor Feedback

 

Some tangible examples of the results of our shareholder outreach activities include:

 

  In response to shareholder demand, we provided shareholders with greater, ongoing access to the Board. Our Executive Chairman regularly engaged with top shareholders particularly in the second half of 2018, via in-person meetings or conference calls.

 

  With the goal of greater transparency and improved communications, we benchmarked best practices and requested feedback from our key stakeholders in the investment community. As a result of our review, we will begin to incorporate organic constant currency revenue growth and Adjusted EPS into our reporting framework in 2019. These metrics will help to provide more clarity into the normalized revenue and earnings power of the organization.

 

  We provide regular shareholder feedback to the Board on various topics, including the strategic review and capital allocation.

 

 

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COMMUNICATIONS WITH DIRECTORS

Any interested party who would like to communicate with, or otherwise make his or her concerns known directly to, the Executive Chairman of the Board or the Chairperson of any of the Audit Committee, Nomination and Corporate Governance Committee and Compensation Committee or to other directors, including the non-management or independent directors, individually or as a group, may do so by addressing such communications or concerns to the Company Secretary at companysecretary@nielsen.com or 40 Danbury Road, Wilton, Connecticut 06897. Such communications may be done confidentially or anonymously. The Company Secretary will forward communications received to the appropriate party as necessary and appropriate. Additional contact information is available on our website, www.nielsen.com/investors, under Contact Us.

 

 

GLOBAL RESPONSIBILITY AND SUSTAINABILITY

Nielsen is committed to strengthening the communities and markets in which we live and operate our business, recognizing how important this is to a sustainable future. This commitment is supported and expressed at all levels of our organization. The Nomination and Corporate Governance Committee oversees the Company’s strategy and initiatives to evaluate and measure our performance with respect to the advancement of environmental, social, and governance (“ESG”) issues. Highlights of our new and continuing efforts in 2018 include:

Responsibility & Sustainability Strategy and Reporting:

 

   

We remain focused on connecting our business with relevant ESG issues through responsible policies and practices, evaluating and measuring performance on these issues, and external reporting and transparency. Regularly reporting our progress to stakeholders supports proactive and useful engagement opportunities to drive continuous improvement and positive change for our company, our people and our world.

 

   

In 2018, we published our second Nielsen Global Responsibility Report, which captures our performance and progress on our long-term, ESG-focused initiatives. The report covers 2016 and 2017, and contains our forward-looking strategy and goals as a company; it also clearly outlines how Nielsen’s ESG issues connect to our most critical business issues, including diversity and inclusion, data privacy, security and integrity. Our Global Responsibility Report allows us to openly share our ESG approach and performance with our stakeholders—our employees, investors, clients, suppliers, and others—and to show our commitment to continuing our progress over the long-term.

 

   

In 2018, Nielsen was included in both the FTSE4Good index and the Dow Jones Sustainability (DJSI) North America index for the second year in a row; we were also included in the DJSI World Index for the first time. We were also honored to be recognized as the industry leader for media companies on JUST Capital’s 2018 “JUST 100” for the second year, advancing more than 50 spots to #40 on the list from the prior year. Finally, Bloomberg included Nielsen as part of its 2019 Gender-Equality Index (GEI); the GEI recognizes the 230 global corporate leaders in advancing women through measurement and transparency.

 

   

In recognition of the business imperative to more strategically engage our clients on meeting their own sustainability goals, we published new, thought leadership and complementary content about consumer preferences regarding the sustainability attributes of the products they purchase. We continue to empower our clients’ sustainability journeys through leveraging Nielsen data and assets.

Nielsen Green:

 

   

We remain focused on creating more sustainable outcomes by leveraging operational efficiencies and harnessing the power of our employees’ contributions. We continue to actively manage our impact on the environment in part through Green Teams, our employee engagement program. In 2018, 20,000 employees participated in Earth Week activities over five days in 55 locations around the world. Our associates also volunteered over 2,000 hours across more than 80 projects in celebration of our first annual World Cleanup Day.

 

 

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We remain committed to fully calculating and managing our carbon emissions. To that end, in 2018, we have expanded our data collection and reporting to include all Nielsen sites globally. In addition, we onboarded a new data management platform that allows for more accurate and efficient representation of our global footprint and other ongoing measurements. We have also expanded our GHG emissions reporting to include Scope 3 (business travel), and we continue to explore the relevance and applicability of all 15 Scope 3 categories.

 

   

In recognition of both the reality of climate change and the opportunities for increased efficiency and effectiveness that it presents, we completed our first global climate risk assessment in early 2018 to identify Nielsen’s climate-related physical and transitional risks. By investigating physical risks, we aimed to uncover how business assets integral to our operations, such as our facilities, may be affected by extreme weather events (e.g., “super storms,” hurricanes, etc.) and changing climate patterns (e.g., increasing drought, heat waves, sea-level rise, etc.). By looking at transitional risks, we aimed to identify the potential financial implications associated with regulatory pressures related to climate change (e.g., carbon taxes, emission caps, investing in new technology, etc.) as well as potential reputational risks.

Supply Chain Sustainability:

 

   

We recognize that our institutional spend with suppliers around the world comes with risks and impacts that are of concern to our company and our stakeholders—risks relating to climate change, energy use, human rights, conflict minerals and data privacy and security, among others. Like the immense purchasing power of individual consumers, as a global company, our institutional spend of over $2 billion can be a demand signal in the marketplace. Our Supply Chain Sustainability program had a productive third year in our goal to establish a best-practice program with these responsibilities and opportunities in mind.

 

   

At the end of 2018, we identified or added more than 400 impact sourcing jobs in our supply chain, representing a 20% increase compared to 2017. We continue to move toward our goal of 500 impact sourcing jobs in our supply chain by 2020.

 

   

Meaningful supplier engagement is the primary means by which we collaborate with suppliers to meet our program’s sustainability goals. We do this through measurement and disclosure, continuous improvement and capacity building. In 2018 we added a contractual provision to our Supplier Code of Conduct requiring sustainability assessments from suppliers meeting spend, criticality and/or risk exposure criteria. In 2018, we engaged close to 200 of our key suppliers across North America, Europe, Latin America, Asia and the Middle East and exceeded our goal of assessing 100 of our key suppliers with a third party supplier assessment covering ESG issues. In 2017, we engaged over 150 of our key suppliers on ESG issues, covering 40% of our spend, up from 60 suppliers and a third of our spend in 2016. We observed an average ESG score increase of 17% in our lowest scoring supplier sustainability assessments, exceeding our goal of an average 10% score increase. We also began measuring product/service level impacts in 2017. We defined over 40 baseline key performance indicators on our most material purchasing categories in 2017, and in 2018, published the baselines and will publish our primary targets to improve them.

 

   

In 2017 and 2018, we raised awareness of our program internally within Nielsen with presentations to over 100 corporate buyers outside of our centralized Global Procurement team. Externally, our program leaders spoke to combined audiences of 3,500 about our supply chain sustainability program, and its alignment with the United Nations Sustainable Development Goals, including a presentation at the United Nations.

 

   

As part of our commitment to create industry-wide impact, we actively participated as a corporate member with the Responsible Business Alliance, the Responsible Minerals Initiative, the Global Impact Sourcing Coalition (as a Founding Member), and the Sustainable Purchasing Leadership Council.

Nielsen Cares:

 

   

Nielsen Cares mobilizes our data, expertise and associates to positively impact the communities in which we live and work around the world. Nielsen Cares programs, in operation since 2010, aim to commit Nielsen resources and time to social causes where we can make a difference, focused on the priority areas of Education, Hunger & Nutrition, Technology, and Diversity & Inclusion. Our employees share skills, time, data, and insights through our volunteering and our in-kind giving programs.

 

 

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In 2018, more than 25,000 employees participated on Nielsen Global Impact Day through 1,450 volunteer events in 91 countries.

 

   

To carry out our Nielsen Cares programs around the world, we maintain and support a global council of approximately 20 Nielsen Cares leaders, representing all geographic markets and multiple functional areas across the company. In coordination with this leadership council, we also have local Nielsen Cares leaders on-site at nearly 150 locations around the world. These leaders work to identify local engagement opportunities with organizations and develop projects for associates to connect with their communities and with each other.

 

   

All Nielsen associates have 24 hours of dedicated volunteer time to use annually to volunteer in their communities around the world. Since 2016, our employees have logged more than 260,000 volunteer hours, tracking towards our goal to volunteer at least 300,000 hours by 2020. In 2018, 92% of our employees said that volunteering has a positive influence on their employee experience.

 

   

In 2018, Nielsen forged a year-long collaboration agreement with All Hands and Hearts—Smart Response, a volunteer-driven disaster relief organization. In November, 20 Nielsen associates traveled to Yabucoa, Puerto Rico, for a week of repairing homes, roofing and sanitizing in the continued clean-up from Hurricane Maria.

 

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Data for Good:

 

   

Data is the foundation of our work and we believe it can be leveraged to advance social good. We’ve committed to enhancing the use of data to increase impact in reducing discrimination, easing global hunger, promoting STEM education and building stronger leadership in the social sector.

 

   

Since 2012, Nielsen has pledged to donate at least $10 million each year of our data, products and services through pro bono work and skills-based volunteering with nonprofits in our priority cause areas. Nielsen donated a record $21.2 million of data, products and services in 2018, again surpassing our $10 million annual commitment of data, products and services. This is part of a larger goal to contribute a cumulative $50 million in-kind from 2016 to the end of 2020.

 

   

We license the use of select Nielsen market research data to the Kilts Center at the University of Chicago’s Booth School of Business. Through this arrangement, eligible academic researchers can apply to access a warehouse of Nielsen data to advance their academic and social research.

Nielsen Foundation:

 

   

The Nielsen Foundation, a private foundation funded by Nielsen, began grantmaking to nonprofit organizations in 2016. The Nielsen Foundation seeks to enhance use of data by the social sector to reduce discrimination, ease global hunger, promote effective education, and build strong leadership.

 

   

In 2018, the Nielsen Foundation distributed $1.67 million in grants. One of the Foundation’s grant programs is Data for Good. In 2018, $304,299 in Data for Good grants were distributed to four organizations.

 

   

The Nielsen Foundation also launched two signature programs in 2018: the TechDiversity Accelerator and Discover Data. The TechDiversity Accelerator, in collaboration with Tampa Bay Wave, is a program specifically dedicated to fostering the growth of diverse startups in the central Florida region and across the country. Discover Data, an education initiative in collaboration with Discovery Education and The Afterschool Alliance, provides resources to students ages 11 to 14 that create excitement about the power of data analysis, as well as volunteer guides to visit classrooms in person or virtually.

 

 

DIRECTOR EDUCATION

Educating our directors about Nielsen and our industry is an ongoing process that begins when a director joins our Board. All new directors take part in a comprehensive orientation about Nielsen which includes meetings with senior leaders to discuss our businesses and strategy as well as our control functions, including finance, operations and legal. We also conduct in-depth training sessions on the work of our committees for both new directors and those directors who are newly appointed to a committee. For a new member of the audit committee, this may include training with our independent registered public accounting firm.

We encourage our directors to participate in external continuing director education programs and provide reimbursement for expenses associated with this participation. Continuing director education is also provided during Board meetings and other Board discussions as part of the formal meetings and as stand-alone information sessions outside of meetings. Among other topics, during 2018, in connection with our strategic review, we conducted several “deep dive” education sessions on the latest developments and trends in our Connect and Media businesses. Our Board also regularly reviews developments in corporate governance to continue enhancing our Board’s effectiveness.

 

 

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RISK OVERSIGHT

The Board is responsible for overseeing Nielsen’s risk and enterprise risk management practices and seeks to foster a risk-aware culture while encouraging appropriate and balanced risk-taking in pursuit of Company objectives. The Board exercises its oversight both directly and through its three committees, each of which has been delegated oversight responsibilities for specific risks. Each committee keeps the Board informed of its oversight efforts through regular reporting to the full Board by the committee chairpersons.

Management is accountable for day-to-day risk management efforts. The Board and committees’ risk oversight and management’s ownership of risk are foundational components of our Enterprise Risk Management program. This program is designed to provide comprehensive, integrated oversight and management of risk and to facilitate transparent identification and reporting of key business issues to senior management and the Board and its committees. The following are the key risk oversight and management responsibilities of our Board, committees and management:

 

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EXECUTIVE SUCCESSION PLANNING

 

One of the Board’s primary responsibilities is to ensure that Nielsen has the appropriate talent to accomplish our business strategies today and in the future. The Board plans for CEO succession by establishing selection criteria and identifying and evaluating potential internal candidates. In July 2018, Mr. Attwood assumed the title of Executive Chairman on an interim basis to, among other responsibilities, lead the Board’s search process to identify a new Chief Executive Officer. The Board was able to successfully implement its CEO succession plan, with Mr. Kenny joining the Company in December 2018.  

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EXECUTIVE SESSIONS

Pursuant to our Corporate Governance Guidelines, to ensure free and open discussion and communication, our independent directors meet in executive session, with no members of management present, at every regularly scheduled Board meeting. Our Executive Chairman leads these meetings which enable our independent directors to discuss matters such as strategy, CEO and senior management performance and compensation, succession planning and board composition and effectiveness. During 2018, our independent directors met seventeen times in executive session.

 

 

COMMITTEE CHARTERS AND CORPORATE GOVERNANCE GUIDELINES

Our commitment to corporate governance is reflected in our Corporate Governance Guidelines, which describe the Board’s views on a wide range of governance topics. These Corporate Governance Guidelines are reviewed from time to time by the Board to ensure that they effectively comply with all applicable laws, regulations and stock exchange requirements, in addition to our articles of association. Additionally, the Board has adopted a written charter for each of the Audit Committee, the Compensation Committee and the Nomination and Corporate Governance Committee. Our Corporate Governance Guidelines, our committee charters and other corporate governance information are available on our website at www.nielsen.com/investors under Governance Documents.

 

 

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CODE OF CONDUCT AND PROCEDURES FOR REPORTING CONCERNS ABOUT MISCONDUCT

We maintain a Code of Conduct, which is applicable to all of our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Code of Conduct, which was updated in 2018, sets forth our policies and expectations on a number of topics, including conflicts of interest, compliance with laws and ethical conduct. The Company will promptly disclose to our shareholders, if required by applicable laws or stock exchange requirements, any amendments to or waivers from the Code of Conduct applicable to our directors or officers by posting such information on our website at www.nielsen.com/investors rather than by filing a Current Report on Form 8-K.

The Code of Conduct may be found on our website at www.nielsen.com/investors under Corporate Governance —Governance Documents.

 

 

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EXECUTIVE OFFICERS OF THE COMPANY

Set forth below is the name, age as of March 31, 2019 and biographical information of each of our current executive officers, other than Mr. Kenny, whose information is presented under “Proposal No. 1 – Election of Directors – Nominees for Election to the Board of Directors.”

 

                             

 

  David J. Anderson

 

  

Age  69     

 

 

 

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Chief Financial Officer (since September 2018) and Chief Operating Officer (since March 2019)

 

Previous Business Experience:

 

Prior to joining Nielsen, Mr. Anderson was the Executive Vice President and Chief Financial Officer of Alexion Pharmaceuticals, Inc. from December 2016 to August 2017. Prior to that, Mr. Anderson served as Senior Vice President and Chief Financial Officer of Honeywell International from 2003 to 2014. Prior to joining Honeywell, Mr. Anderson was Senior Vice President and Chief Financial Officer of ITT Industries, as well as Newport News Shipbuilding. Previously, he held senior financial positions with RJR Nabisco and the Quaker Oats Company.

 

Public Company Directorship:

 

Mr. Anderson serves on the board of directors of American Electric Power Company, Inc.

          

 

  George D. Callard

 

  

Age  55     

 

 

 

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Chief Legal Officer (since January 2019)

 

Previous Business Experience:

 

Prior to joining Nielsen, Mr. Callard served as President of Weather Group, LLC from July 2018 to January 2019. From 2016 to 2018, Mr. Callard served as Chief Administrative Officer & General Counsel at Weather Group, LLC. From 2013 to 2015, he served as EVP, General Counsel & Head of Government Affairs for The Weather Company, parent company of The Weather Channel. Previously, Mr. Callard served as vice president of legal and business affairs at NBCU and had two tenures with AT&T (SBC & Ameritech). Earlier in his career, he served as counsel and assistant secretary and as senior counsel at the law firm Cinnamon Mueller and associate counsel for Multimedia Cablevision.

          

 

  Nancy Phillips

 

  

Age  51     

 

 

 

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Chief Human Resources Officer (since January 2017)

 

Previous Business Experience:

 

Prior to joining Nielsen, Ms. Phillips was Executive Vice President and Chief Human Resources Officer at Broadcom Corporation from September 2014 until April 2016. From February 2010 to June 2014, Ms. Phillips held the position of SVP Human Resources for the Imaging and Printing Group at Hewlett-Packard Company, most recently as Senior Vice President, Human Resources, Enterprise Services. Prior to joining Hewlett-Packard Company, from April 2008 to February 2010, Ms. Phillips was employed by Fifth Third Bancorp as Executive Vice President and Chief Human Resources Officer. Prior to that, Ms. Phillips spent 11 years at General Electric Company, holding various human resources positions. Ms. Phillips started as an attorney-at-law and began her career in legal practice from 1993-1997.

 

 

 

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The Audit Committee has selected Ernst & Young LLP to serve as our independent registered public accounting firm for the year ending December 31, 2019.

Although ratification of the selection of Ernst & Young LLP is not required by U.S. federal laws, the Board is submitting the selection of Ernst & Young LLP to our shareholders for ratification because we value our shareholders’ views on the Company’s independent registered public accounting firm. If our shareholders fail to ratify the selection, it will be considered as notice to the Board and the Audit Committee to consider the selection of a different firm. Even if the selection is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interest of the Company and our shareholders.

A representative of Ernst & Young LLP is expected to be present at the Annual Meeting to answer appropriate questions and will have the opportunity to make a statement if he or she desires to do so.

 

 

AUDIT AND NON-AUDIT FEES

In connection with the audit of the Company’s annual financial statements for the year ended December 31, 2018, we entered into an agreement with Ernst & Young LLP which sets forth the terms by which Ernst & Young LLP performed audit services for the Company.

The following table presents fees for professional services rendered by Ernst & Young LLP and its affiliates for the audit of our financial statements for the years ended December 31, 2018 and 2017 and for other services rendered by them in those years:

 

      

Year Ended December 31,

 

 
       

2018

 

      

2017

 

 

Audit fees1

     $

 

8,586,600

 

 

 

     $

 

8,468,200

 

 

 

Audit-related fees2

      

 

2,205,700

 

 

 

      

 

508,500

 

 

 

Tax fees3

      

 

172,400

 

 

 

      

 

323,000

 

 

 

All other fees4

      

 

9,000

 

 

 

      

 

9,000

 

 

 

Total

     $

 

10,973,700

 

 

 

     $

 

9,308,700

 

 

 

 

1   Fees for audit services billed or expected to be billed in relation to the years ended December 31, 2018 and 2017 consisted of the following: audit of the Company’s annual financial statements, reviews of the Company’s quarterly financial statements, and statutory and regulatory audits.

 

2   Fees for audit-related services in the years ended December 31, 2018 and 2017 included fees related to carve-out audits related to the Company’s strategic review, the audits of employee benefit plans, accounting consultations and other attest services.

 

3   Fees for tax services billed in the years ended December 31, 2018 and 2017 consisted of tax compliance and tax planning and advice.

 

4   All other fees in the years ended December 31, 2018 and 2017 included certain other fees.

The Audit Committee considered whether providing the non-audit services shown in this table was compatible with maintaining Ernst & Young LLP’s independence and concluded that it was compatible.

 

 

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RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES

Subject to shareholder approval as may be required under the laws of England and Wales, the Audit Committee is directly responsible for the appointment and termination of the independent registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company. Each year the Audit Committee reviews the qualifications, performance and independence of our independent registered public accounting firm in accordance with regulatory requirements and guidelines.

In addition, and also subject to shareholder approval as may be required under the laws of England and Wales, the Audit Committee is responsible for the compensation, retention and oversight of its independent registered public accounting firm, including the resolution of disagreements between management and such firm regarding financial reporting. In exercising this responsibility, the Audit Committee pre-approves all audit and permitted non-audit services provided by such firm. The Audit Committee has delegated to its Chairperson the authority to review and pre-approve any such engagement or relationship, which may be proposed in between its regular meetings. Any such pre-approval is subsequently considered and ratified by the Audit Committee at the next regularly scheduled meeting. All of the services covered under “– Audit and Non-Audit Fees” were pre-approved by the Audit Committee.

The Audit Committee may form and delegate to subcommittees consisting of one or more of its members, when appropriate, the authority to pre-approve services to be provided by the independent registered public accounting firm so long as the pre-approvals are presented to the full Audit Committee at its next scheduled meeting.

 

LOGO   The Board of Directors recommends that shareholders vote “FOR” the ratification of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2019.

 

 

AUDIT COMMITTEE REPORT

The Audit Committee operates pursuant to a charter adopted by the Board of Directors. The Audit Committee reviews and assesses the adequacy of this charter annually and it was last amended in February of 2019. Additionally, a brief description of the primary responsibilities of the Audit Committee is included in this proxy statement under “The Board of Directors and Certain Governance Matters – Committee Membership and Responsibilities – Audit Committee.”

In the performance of its oversight function, the Audit Committee reviewed and discussed the audited financial statements of the Company with management and with the independent registered public accounting firm. Discussions included, among other things:

 

   

the acceptability and quality of the accounting principles;

 

   

the reasonableness of significant accounting judgments and critical accounting policies and estimates;

 

   

the clarity of disclosures in the financial statements; and

 

   

the adequacy and effectiveness of Nielsen’s financial reporting procedures, disclosure controls and procedures and internal control over financial reporting, including management’s assessment and report on internal control over financial reporting.

Management represented to the Audit Committee that the Company’s consolidated financial statements as of and for the fiscal year ended December 31, 2018 were prepared in accordance with generally accepted accounting principles. The Audit Committee also discussed with management and Ernst & Young LLP the process used to support certifications by the Company’s CEO and CFO that are required by the SEC and the Sarbanes-Oxley Act of 2002 to accompany the Company’s periodic filings with the SEC and the process used to support management’s annual report on the Company’s internal controls over financial reporting.

 

 

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RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

The Audit Committee also discussed with the independent registered public accounting firm the matters required to be discussed by applicable Public Company Accounting Oversight Board (“PCAOB”) standards (Including significant accounting policies, alternative accounting treatments and estimates, judgments and uncertainties). In addition, the Audit Committee received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and discussed with the independent registered public accounting firm their independence.

Based upon the review and discussions described in the preceding paragraph, the Audit Committee recommended to the Board that the audited financial statements of the Company be included in the Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC.

Submitted by the Audit Committee of the Company’s Board of Directors:

Karen M. Hoguet (Chairperson)

David Rawlinson

Javier G. Teruel

 

 

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The Audit Committee has selected Ernst & Young LLP to serve as the Company’s UK statutory auditor who will audit the Company’s UK Annual Report and Accounts to be prepared in accordance with the International Financial Reporting Standards, as adopted by the European Union (“IFRS”), for the year ending December 31, 2019. As required by the law of England and Wales, shareholder approval must be obtained for the selection of Ernst & Young LLP to serve as the Company’s UK statutory auditor and to hold office from the completion of the Annual Meeting until the end of the next annual general meeting of shareholders at which the Company’s UK statutory accounts will be presented.

Representatives of Ernst & Young LLP will attend the Annual Meeting to answer appropriate questions for the year ended December 31, 2019. They will also have the opportunity to address the Annual Meeting if they desire to do so.

The affirmative vote of a majority of the votes cast at the Annual Meeting is required to pass this resolution to reappoint Ernst & Young LLP as the Company’s UK statutory auditor until the next annual general meeting of shareholders.

 

LOGO   The Board of Directors recommends that the shareholders vote “FOR” the reappointment of Ernst & Young LLP as the Company’s UK statutory auditor who will audit the Company’s UK Annual Report and Accounts for the year ending December 31, 2019.

 

 

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LOGO

As required under the laws of England and Wales, the compensation of Ernst & Young LLP as the Company’s UK statutory auditor must be fixed by the shareholders or in such manner as the shareholders may determine. Subject to Ernst & Young LLP being reappointed as the Company’s UK statutory auditor pursuant to Proposal No. 3, it is therefore proposed that the Audit Committee be authorized to determine their compensation. Pursuant to Nielsen’s Audit Committee Charter, the Board has delegated this authority to the Audit Committee.

The affirmative vote of a majority of the votes cast at the Annual Meeting is required to approve this proposal.

 

LOGO    The Board of Directors recommends that the shareholders vote “FOR” the authorization of the Audit Committee to determine the compensation of Ernst & Young LLP in its capacity as the Company’s UK statutory auditor.

 

 

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LOGO

In accordance with the requirements of Section 14A of the Exchange Act and the related rules of the SEC, at the 2018 annual general meeting of shareholders, we submitted to our shareholders a non-binding, advisory vote on executive compensation, as well as a non-binding, advisory vote on the frequency with which shareholders believed we should submit the non-binding, advisory vote on executive compensation. A majority of the shareholders voted that the non-binding, advisory vote on executive compensation should occur every year. We are including in the proxy materials a separate advisory resolution regarding the compensation of our named executive officers as disclosed pursuant to the SEC rules. While the results of this vote are non-binding and advisory in nature, the Board intends to carefully consider them when considering our executive compensation program.

The language of the resolution is as follows:

“RESOLVED, THAT THE COMPENSATION PAID TO THE COMPANY’S NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THE PROXY STATEMENT PURSUANT TO THE SEC RULES, INCLUDING THE COMPENSATION DISCUSSION AND ANALYSIS, COMPENSATION TABLES AND ANY RELATED NARRATIVE DISCUSSION, IS HEREBY APPROVED.”

In considering their vote, shareholders may wish to review with care the information on the Company’s compensation policies and decisions regarding the named executive officers presented in “Executive Compensation – Compensation Discussion and Analysis.”

In particular, as discussed in “Executive Compensation – Compensation Discussion and Analysis,” shareholders should note the following:

 

   

Our executive compensation program is designed to incent and reward our leadership team for delivering sustained financial performance and long-term shareholder value.

 

   

A significant portion of each named executive officer’s compensation is at risk, dependent on the achievement of challenging annual and long-term performance goals and/or the performance of our share price.

 

   

2018 was a challenging year for Nielsen. We were disappointed in our 2018 financial results, which fell short of the objectives set at the beginning of the year. Our variable performance-based compensation plans operated as intended.

 

   

Payouts to NEOs under Nielsen’s Annual Incentive Plan for 2018 were zero.

 

   

Payouts to NEOs and other participants in Nielsen’s PRSU award program for the 2016 – 2018 cycle that matured on December 31, 2018 were zero.

 

   

The interim performance evaluation for Nielsen’s 2017 – 2019 PRSU cycle is tracking to pay out at zero. PRSUs represent the single largest component by value of NEO compensation. For further information, see “Executive Compensation – Compensation Discussion and Analysis – Summary of Other NEO Pay Decisions – 2016 LTPP Payouts” and “Executive Compensation – Compensation Discussion and Analysis – How Pay Decisions are Made – Annual Incentive Plan – 2018 Results”.

 

   

There was significant turnover at the executive level in 2018: Mr. Barns, our former Chief Executive Officer, retired from the Company at the end of 2018 and was replaced by Mr. Kenny. Mr. Jackson, our former Chief Financial Officer, resigned in September 2018 and was replaced by Mr. Anderson. Mr. Dale, our former Chief Legal Officer, resigned in early 2019 and was replaced by Mr. Callard. Certain of the compensation actions described in this Compensation Discussion and Analysis reflect one-time new hire or separation arrangements. For more information, see “Executive Compensation – Compensation Discussion and Analysis – New CEO and CFO Compensation Arrangements”. Mr. Barns’ separation constituted a termination without cause under Nielsen’s severance policy, and Mr. Barns therefore received severance compensation which is reflected in the Summary Compensation Table but will be delivered as pay continuation through 2020. See “– Severance Payments and Benefits – Terms of Mr. Barns’ separation from the Company,” for more detail.

 

 

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NON-BINDING, ADVISORY VOTE ON EXECUTIVE COMPENSATION

 

 

   

Without his severance pay, Mr. Barns’ reported total compensation in the Summary Compensation Table would have decreased nearly 50% from 2017 reported pay.

 

   

Given business difficulties and in light of the turnover at the executive level, in September the Compensation Committee decided to launch a targeted special pay program aimed at retaining critical leaders responsible for strategy development, delivering the revised 2018 financial targets and continuing the transformation of the Company over the next three years. As described further under “Executive Compensation – Compensation Discussion and Analysis – Summary of Other NEO Pay Decisions”, select senior leaders, including certain of the NEOs, received one-time equity-based retention awards. The awards were designed to provide meaningful retention value and reward superior stock price performance. For each participant, half of the award value is denominated in performance stock options (“PSOs”) subject to a challenging stock price growth hurdle of 25% increase from the date of grant. The remaining award value is denominated in service-based restricted stock units (“RSUs”) for their retention value, as well as, alignment with stock price performance. Both components vest ratably over 3 years except that PSOs will only become exercisable if the stock price goal is achieved for 21 or more consecutive days within the three year period.

 

   

We increased the proportion of the long-term incentive awards that are subject to quantitative performance measures from 50% to 60% and, to bring added emphasis on growth we added revenue metrics to our annual incentive plan and long-term performance plan. For further information, see “Executive Compensation – Compensation Discussion and Analysis – How Pay Decisions are Made – Annual Incentive Plan – 2019 Changes” and “Executive Compensation – Compensation Discussion and Analysis – How Pay Decisions are Made – Long Term Incentives (LTI)” and “Executive Compensation – Compensation Discussion and Analysis – How Pay Decisions are Made – Long-Term Incentives (LTI) – Performance Restricted Stock Units Awarded Under the Long-Term Performance Plan (LTPP) – 2019 Changes”.

 

 

LOGO   The Board of Directors recommends that shareholders vote “FOR” approval of the compensation of the Company’s named executive officers.

 

 

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EXECUTIVE COMPENSATION

 

 

COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

Business Highlights

2018 was a challenging year for Nielsen. We set revised objectives for the second half of the year based on updated business conditions and revised guidance for revenue, EBITDA margin and free cash flow. The Board also initiated a comprehensive strategic review of the entire Company and its businesses. We finished the year by either meeting or exceeding our revised operating expectations.

Implications for Compensation

Nielsen’s executive compensation philosophy includes a stated emphasis on variable, at-risk compensation. Nielsen’s performance in 2018 was reflected in executive pay outcomes in the following ways:

 

   

Without his severance pay, Mr. Barns’ reported total compensation in the Summary Compensation Table would have decreased nearly 50% from 2017 reported pay.

 

   

Payouts to NEOs under Nielsen’s Annual Incentive Plan (“AIP”) for 2018 were zero.

 

   

Payouts to NEOs and other participants in Nielsen’s performance restricted share unit (“PRSU”) award program for the 2016 – 2018 cycle that matured on December 31, 2018 were zero.

 

   

The interim performance evaluation for Nielsen’s 2017 – 2019 PRSU cycle is tracking to pay out at zero. PRSUs represent the single largest component by value of NEO compensation. Below is a table of recent and projected future payouts under our LTPP Plan. Our variable pay programs continue to operate as intended.

 

     

2015

 

      

2016

 

      

Projected 2017

 

 
Payout Percentage      59.15        0        0 %1 

 

  1   Current projection of all performance metrics under the plan is below threshold

Leadership Transitions

There was significant turnover at the executive level in 2018: Mr. Barns, our former Chief Executive Officer, retired from the Company at the end of 2018 and was replaced by Mr. Kenny. Mr. Jackson, our former Chief Financial Officer, resigned in September 2018 and was replaced by Mr. Anderson. Mr. Dale, our former Chief Legal Officer, resigned in early 2019 and was replaced by Mr. Callard. Certain of the compensation actions described in this CD&A reflect one-time new hire or separation arrangements. Mr. Barns’ separation constituted a termination without cause under Nielsen’s severance policy, and Mr. Barns therefore received severance compensation, which will be delivered as pay continuation through 2020. See “– Severance Payments and Benefits – Terms of Mr. Barns’ separation from the Company“.

Compensation Highlights for 2018

Given 2018’s business difficulties and in light of the turnover at the executive level, in September the Compensation Committee decided to launch a targeted special pay program aimed at retaining critical leaders responsible for strategy development, delivering the revised 2018 financial targets and continuing the transformation of the Company over the next three years. As described further under “– Summary of Other NEO Pay Decisions” below, select senior leaders, including certain of the NEOs, received one-time equity-based retention awards. The awards were designed to provide meaningful retention value and reward superior stock price performance. For each NEO participant, half of the award value is denominated in performance stock options (“PSOs”) subject to a challenging stock price growth hurdle of 25%. The remaining award value is denominated in service-based restricted stock units (“RSUs”) for their retention value, as well as, alignment with stock price performance. Both components vest ratably over three years except that PSOs will only become exercisable if the stock price goal is achieved for 21 or more consecutive days within the three-year period.

 

 

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EXECUTIVE COMPENSATION

 

Messrs. Kenny and Anderson were hired in 2018. Their respective compensation packages are described in detail under “– New CEO and CFO Compensation Arrangements” below. In each case, their annual compensation arrangements were designed to be competitive with the median of the external market benchmarks selected, taking each executive’s seniority and strong track record of success into account. Each executive received certain one-time “inducement” or “make-whole” awards in connection with his hiring.

In 2018, the Compensation Committee decided to increase the proportion of Long-Term Incentives (“LTI”) subject to quantifiable performance from 50% to 60% which became effective with the February 2018 PRSU award. In addition, three-year revenue compounded annual growth rate (“CAGR”) was added as a performance metric, weighted at 25%. Free cash flow, weighted at 50%, and total shareholder return, weighted at 25% were the other performance metrics for 2018.

Business Overview

With a presence in 100+ countries, Nielsen’s mission is to collect, create, inform and activate data for clients across the media and fast moving consumer goods industries. Our purpose is to make the markets we serve smarter and more efficient, helping clients make more informed business decisions. Nielsen’s services are organized into two renamed business segments: Nielsen Global Media and Nielsen Global Connect.

Nielsen Global Media brings together all of our most powerful assets across Discovery, Measurement, Planning, Activation and Optimization both in the US and internationally. Our broad range of services give media companies, advertising agencies and advertisers the most complete view available of what consumers watch, listen to, share, post, and engage with across many different platforms and devices. Built on our data of record, our analytics solutions enable media companies to segment their audiences with depth, precision and efficiency, so they can highlight the right audience for advertisers’ goals. Our analytics also help advertising agencies design, implement and evaluate campaigns that deliver on clients’ business goals. Our vision is to be the trusted single source of truth – helping buyers and sellers of consumer influence transact in a trusted and scalable way.

Nielsen Global Connect is focused on building a comprehensive view of the entire shopper journey across in-store and eCommerce purchases. We offer the best-in-class measurement, predictive tools, and activation through differentiated products that connect manufacturers and retailers. Our business is independent, third-party measurement. We don’t create content and we don’t buy or sell ad placements. What we care about is producing rigorous, independent, accurate data on which our clients can depend.

In both the Media and Connect segments, we employ data scientists, economists, engineers, technologists, psychologists, neuroscientists, field auditors and more, all of whom have a passion for collecting comprehensive, accurate data and turning it into positive business results for clients.

 

 

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EXECUTIVE COMPENSATION     

 

Business Performance

For 2018:

 

   

Revenues down 0.9% over prior year (-0.7% on a constant currency1 basis)

 

   

Adjusted EBITDA1, 2 down 8.6% over prior year (-7.9% on a constant currency basis)

 

   

Normalized free cash flow1 down 37.2% over prior year

 

LOGO

 

1   Please see Annex C for additional information and a reconciliation of Adjusted EBITDA, free cash flow, normalized free cash flow and measures on a constant currency basis to financial measures derived in accordance with United States generally accepted accounting principles (“GAAP”).

 

2   The Company adopted FASB ASU 2017-07 effective January 1, 2018 and reclassified $11 million and $13 million from selling, general and administrative expenses to other income / (expense), net in its consolidated statement of operations for the twelve months ended December 31, 2017 and 2016, respectively.

 

 

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EXECUTIVE COMPENSATION     

 

Total Shareholder Return1

The chart below shows the value of a $100 investment in Nielsen stock over a three-year period beginning December 31, 2015 and ending December 31, 2018. We have compared our performance to the S&P 500 and to a market cap-weighted composite of the peer group we use to measure relative total shareholder return under our Long-Term Performance Plan (“LTPP”) as described under “– How Pay Decisions are Made – Long-Term Incentives (LTI) – Performance Restricted Stock Units Awarded Under the Long-Term Performance Plan (LTPP).”

 

 

NIELSEN HOLDINGS plc—THREE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN

 

LOGO

 

1   We define total shareholder return as the change in stock price over the three-year period ended December 31, 2018, assuming monthly reinvestment of dividends.

 

 

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EXECUTIVE COMPENSATION     

 

 

Business Performance Highlights for 2018:

 

   

Strategic Review: We announced a broad review of strategic alternatives for the Company and its businesses.

 

 

   

Updated Guidance: Given first half of fiscal year 2018 performance, we updated second half guidance. We met or exceeded our revised operating expectations and positioned ourselves for 2019.

 

 

   

Growth: Through our internal R&D, acquisitions, and our incubator in Israel, we continue to invest in new growth opportunities. To expand our e-commerce offerings we signed an exclusive agreement with Rakuten, allowing us to have the most comprehensive, multi-sourced e-commerce measurement solution for the U.S. market. Our acquisition of Ebiquity’s ad intelligence business will allow us to combine our Global Ad Intel solution and create a more powerful offering.

 

Media Segment Highlights for 2018:

 

   

We are focused on building one end-to-end platform that brings together all of our most powerful assets across Discovery, Measurement, Planning, Activation and Optimization in the U.S. and more than 60 other markets around the world.

 

 

   

We continue to build a solid foundation using standard, comparable, de-duplicated, cross-platform measurement through our Total Audience Measurement framework. In 2018, we signed new contracts with two of our largest, most strategic media clients, securing our position as their trusted partner.

 

 

   

We advanced our Total Ad Ratings solution to provide comprehensive cross-platform coverage with the inclusion of Over-the-Top and mobile audiences, and offering the industry its first and only persons-level and de-duplicated measurement of ads across devices.

 

 

   

We worked towards becoming the currency for digital viewing by expanding Digital Ad Ratings to 32 global markets. Furthermore, Digital Ad Ratings is used by the top 7 agency holding companies and accepted by the top 25 advertisers.

 

 

   

Our Digital Content Ratings have seen momentum among both TV and digital publishers. Our ability to include video viewing from Hulu, Facebook, and YouTube has been positively received by the industry.

 

Connect Segment Highlights for 2018:

 

   

We are executing on Total Consumer Measurement, focusing on expanding coverage and granularity across all channels that matter to clients.

 

 

   

We continue to grow the number of clients using at least one component of Nielsen Connect. We ended the year with 306 clients using at least one component of Nielsen Connect, including apps through our Connect Partner Network. Tyson recently became the first client to switch to Nielsen Connect as their “system of record.”

 

 

   

Our retailer initiatives had good traction, especially the Walmart and Sam’s Club supplier collaboration programs with 850 manufacturing clients signed up, many of which are small and mid-tier manufacturers.

 

 

   

Clients continue to prioritize investments in Emerging Markets given strong tailwinds such as population growth, a rising middle class, and urbanization and we continue to focus on enhancing our measurement offerings in Emerging Markets, including greater coverage of the important traditional trade channel.

 

 

   

We’ve been successful in adding new retail cooperators in Developed Markets.

 

 

   

Our U.S. Connect business continues to focus on building stronger, differentiated offerings that can serve large multinational clients as well as small and mid-tier clients and our go-forward strategy is focused on helping clients drive growth by leveraging data as an enterprise asset.

 

Executive Compensation Overview

Nielsen’s executive compensation program is designed to motivate and reward our leadership team to deliver sustainable growth and financial performance while delivering long-term shareholder value.

 

 

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EXECUTIVE COMPENSATION     

 

Key considerations in 2018 were:

2018 Advisory Vote on Executive Compensation

Each year, our shareholders vote on an advisory resolution to approve the pay of our NEOs. In 2018, approximately 84% of the votes cast at our annual general meeting of shareholders affirmed our executive compensation program. The Company engages in a comprehensive outreach program to our shareholders to discuss and solicit feedback on topics including Company performance, executive compensation and how we disclose information in our proxy statement. These meetings are led by the Executive Chairman of the Board and result in valuable feedback from shareholders.    

Following our annual general meeting of shareholders in May 2018, we conducted additional outreach to shareholders to obtain specific feedback on the say on pay voting results. In consideration of shareholder feedback we adjusted the percent of long-term incentives subject to performance conditions from 50% to 60% for our CEO and other NEOs. In 2018, the incentive plans were strongly aligned with performance outcomes and operated as intended. The 2016 LTPP grants which matured on December 31, 2018 paid out at zero percent due to relative total shareholder return and Free Cash Flow metrics not meeting the required threshold performance levels as described under “-Summary of Other NEO Pay Decisions – PSRU Payouts Under the 2016 LTPP”. The 2018 AIP also paid out at zero as the Company did not meet the required performance thresholds for Adjusted EBITDA and Revenue.

Pay for Performance

Nielsen has a strong culture of pay for performance which serves to align Company goals and performance with pay outcomes for the Company’s executives. Nielsen conducts quantitative assessments of business financial performance and also evaluates individual contributions towards key business objectives in order to differentiate rewards. NEOs participate in the same performance assessment process applicable to all managerial employees, including an annual performance appraisal and semi-annual individual peer rankings of performance and leadership impact.

Total Company Performance

Our NEOs participate in the same annual cash incentive plan applicable to all managerial employees, which in 2018 was funded based on Company AIP Adjusted EBITDA performance and annual revenue growth as described under “– How Pay Decisions are Made – Annual Incentive Plan.”

Pay Competitively

Providing competitive pay opportunities is a hallmark of Nielsen’s compensation programs. The Compensation Committee reviews each NEO’s compensation annually and considers several factors when making pay decisions:

 

  1.

Total direct compensation, which consists of base salary, annual cash incentives and long-term incentives, is benchmarked against executives serving in similar roles within a peer group of companies selected for their business relevance and size appropriateness to Nielsen;

 

  2.

Total direct compensation is targeted around the median of our peer group, but sustained strong individual performance and leadership impact may result in above median pay opportunities;

 

  3.

The mix of base salary, annual incentive and long-term incentives is reviewed to ensure a significant portion of NEO pay is at risk based on the achievement of performance objectives or the performance of our share price and to ensure the right focus on short-term and long-term performance, with an emphasis on the latter; and

 

  4.

Other factors reviewed include changes in role or responsibilities, Company financial performance, and individual performance.

 

 

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EXECUTIVE COMPENSATION     

 

Variable Pay is At Risk

Nielsen’s compensation programs are designed so that a significant portion of each NEO’s compensation is at risk; meaning that the compensation is dependent on the achievement of challenging annual and long-term performance goals and/or the performance of our share price as laid out in the charts and tables below. At risk compensation is composed of annual cash incentive awards and equity-based awards and does not include fixed pay such as base salary. Long-term pay has historically been delivered exclusively in the form of equity to align the interests of the NEOs with the creation of value for our shareholders. In 2018, long-term pay consisted solely of equity-based awards.

The chart below illustrates the elements of annual total direct compensation at target for Mr. Kenny, our CEO since December 2018. The next chart shows the elements of annual total direct compensation at target for Mr. Barns, our CEO through December 2, 2018. The final chart below illustrates the target elements of total direct compensation for other NEOs in 2018. See “– Summary Compensation Table” for actual amounts earned by all NEOs in 2018. In all cases, the design of Nielsen’s compensation programs aligns closely with our peer group.

 

  CEO – Kenny COMPENSATION STRUCTURE 20181

 

 

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     Elements of Total Direct Compensation

 

  

2018

 

 
 

Proportion of pay subject to specific quantitive performance criteria

 

    

 

60%

 

 

 

 

Proportion of pay at risk

 

    

 

87%

 

 

 

 

Proportion of pay delivered in the form of equity

 

    

 

68%

 

 

 

 

1   Reflects 2018 annual total direct compensation at target for Mr. Kenny had he worked a full year. Excludes the make-whole and new hire inducement awards granted or paid in connection with Mr. Kenny’s hiring, which are included in the Summary Compensation Table. See “– New CEO and CFO Compensation Arrangements” below.

 

 

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EXECUTIVE COMPENSATION     

 

 

 

  CEO – Barns COMPENSATION STRUCTURE 20181

 

 

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     Elements of Total Direct Compensation

 

  

2018

 

 
 

Proportion of pay subject to specific quantitive performance criteria

 

    

 

62%

 

 

 

 

Proportion of pay at risk

 

    

 

91%

 

 

 

 

Proportion of pay delivered in the form of equity

 

    

 

73%

 

 

 

 

1   Reflects 2018 annual total direct compensation at target for Mr. Barns

 

  OTHER NEOs COMPENSATION STRUCTURE 20181

 

 

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     Elements of Total Direct Compensation

 

  

2018

 

 
 

Proportion of pay subject to specific quantitive performance criteria

 

    

 

56%

 

 

 

 

Proportion of pay at risk

 

    

 

78%

 

 

 

 

Proportion of pay delivered in the form of equity

 

    

 

56%

 

 

 

 

1   Reflects 2018 annual total direct compensation at target for Messrs. Anderson, Jackson, Tavolieri and Dale and Ms. Phillips.

 

 

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EXECUTIVE COMPENSATION

 

Executive Compensation Elements

 

  Element

 

  

Purpose

 

 

    Key Characteristics

 

  Base Salary    Attract and retain top talent  

The Compensation Committee considers a variety of factors including: (1) our pay for performance philosophy, (2) peer group market benchmark compensation data, (3) the NEO’s individual performance and contributions to the success of the business in the prior year, (4) Company performance, (5) current pay mix, and (6) role changes

 

  AIP    Motivate NEOs to accomplish short-term business performance goals that contribute to long-term business objectives  

AIP award values are determined each year by reference to (1) our pay for performance philosophy, (2) peer group benchmarking and general market survey data, (3) the NEO’s individual performance and contributions to the success of the business in the prior year, (4) Company performance, (5) current pay mix, (6) role changes, and (7) prior year award

Adjusted EBITDA and revenue were the performance metrics weighted 75% and 25% respectively.

AIP Adjusted EBITDA and revenue metrics operate independently; however revenue only funds if AIP Adjusted EBITDA meets threshold performance.

 

  Long-Term Incentive (“LTI”)    Deliver long-term sustainable performance and align executive rewards with long-term returns delivered to shareholders  

LTI award values are determined each year by reference to (1) our pay for performance philosophy, (2) peer group benchmarking and general market survey data, (3) the NEO’s individual performance and contributions to the success of the business in the prior year, (4) Company performance, (5) current pay mix, (6) role changes, and (7) prior year award

 

   

  PRSUs under LTPP

   Alignment with long-term shareholder return  

Subject to performance against three-year cumulative performance metrics, free cash flow, revenue compounded annual growth rate (“revenue CAGR”) and relative total shareholder return, with assigned weighting of 50%, 25% and 25%, respectively

Represents 60% of the annual grant-date LTI value

 

   

  RSUs

   Alignment with shareholder return and retention  

Service-based equity is delivered in RSUs

Three or four-year service-vesting

Represents approximately 40% of LTI value

 

   

  PSOs

   Alignment with long-term shareholder return  

Special awards subject to the achievement of a Nielsen stock price appreciation goal of 25% for a period of 21 consecutive trading days at any time in the three-year period.

Premium PSOs have a $40 per share exercise price

 

  Health and Welfare Plans,
  Perquisites
  

Promote overall wellbeing and avoid distractions caused by unforeseen health/financial issues

 

 

Health and Welfare plans generally available to other employees

De minimis financial planning and wellness services allowances

New CEO and CFO Compensation Arrangements

CEO

Mr. Kenny was appointed CEO effective December 3, 2018.

In 2018, the Compensation Committee approved Mr. Kenny’s compensation package. The package was constructed to attract a candidate of Mr. Kenny’s leadership caliber and proven entrepreneurial and digital technology experience in a highly competitive recruitment market. His target compensation of $10,225,000 was positioned at the median of our market benchmarks and is comprised of:

 

  Compensation Element

 

  

    2019     

 

 

  Base Salary

 

   $

 

1,300,000     

 

 

 

  Annual Incentive

 

   $

 

1,925,000     

 

 

 

  Long-Term Incentives1

 

   $

 

7,000,000     

 

 

 

 

1    Mr. Kenny’s regular annual long-term incentive is comprised of 60% ($4,200,000) PRSUs and 40% ($2,800,000) service-based RSUs. PRSUs will be earned based on Nielsen achieving approved cumulative financial performance targets over the three-year period commencing January 1, 2019 provided Mr. Kenny is an active employee on the vesting date. RSUs will vest in four equal annual installments commencing on the first anniversary of the grant date provided Mr. Kenny is an active employee on the vesting date.

 

 

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EXECUTIVE COMPENSATION

 

Mr. Kenny received the following compensation awards connected with his hiring:

 

  Compensation

  Element

 

  

$ Value

 

  

Form

 

  

Description

 

  Make Whole   Compensation    $1,500,000    Lump Sum Cash   

Payable promptly following Mr. Kenny’s start date to compensate Mr. Kenny for the loss of the 2018 annual incentive payout from prior employer. If Mr. Kenny resigns voluntarily without Good Reason or is terminated for Cause within one year of receiving the payment, Mr. Kenny must repay the amount in full.

 

   $2,500,000    Lump Sum Cash   

Payable in February 2019 to compensate Mr. Kenny for the loss of a cash retention award from prior employer, subject to continued employment through the applicable payment date.

 

   $13,742,766    487,505 RSUs   

To replace approximately 84% of the outstanding PRSUs and RSUs from prior employer; this award will vest in three equal annual installments on December 31, 2019, 2020, and 2021, subject to continued employment through the applicable vesting date.

 

  Total Make Whole   Compensation    $17,742,766    77% Equity-based and 23% Cash   
  New Hire Inducement    $1,466,901    367,031 Performance Stock Options   

Option to purchase shares of Company common stock (“Performance Options”), with a seven-year term and an exercise price equal to the closing price of Company common stock on the first day of Mr. Kenny’s employment with the Company, vesting ratably on December 3, 2019, 2020 and 2021, subject to (1) continued employment through the applicable vesting date, and (2) the shares of Company common stock having a closing market price of at least $32.24, a 25% performance improvement over the price at the time of his offer, for at least 21 consecutive trading days prior to December 31, 2021.

 

   $1,400,010    54,285 RSUs   

Cliff vesting on December 3, 2021, subject to continued employment through the vesting date.

 

   $1,620,000    750,000 Premium Priced Stock Options   

Option to purchase shares of Company common stock, with a seven-year term and a $40 per share exercise price, representing a share price appreciation of over 41% over the price on his first day, vesting ratably on December 3, 2019, 2020 and 2021, subject to continued employment through the applicable vesting date.

 

  Total New Hire   Inducement    $4,486,911    100% Equity-based   

  Regular Annual

  Long-Term Incentive

   $4,200,000    PRSUs   

PRSUs will be earned based on Nielsen achieving approved cumulative financial performance targets over the three-year period commencing January 1, 2019 provided Mr. Kenny is an active employee on the vesting date.

 

  (first award made in   February 2019)    $2,800,000    RSUs   

RSUs will vest in four equal annual installments commencing on the first anniversary of the grant date provided Mr. Kenny is an active employee on the vesting date.

 

  Total Long-Term   Incentive    $7,000,000    100% Equity-based   

In addition, Mr. Kenny’s offer included the reimbursement of legal fees incurred in accepting the position up to $40,000 and the reimbursement of expenses incurred in financial planning of up to $15,000 and a health examination reimbursement of up to $2,500.

CFO

Mr. Anderson was appointed CFO effective September 10, 2018.

His target annual compensation of $3,850,000 was positioned at the median of our market benchmarks and was comprised of:

 

  Compensation Element

 

  

        2019     

 

 

  Base Salary

 

   $

 

800,000     

 

 

 

  Annual Incentive

 

   $

 

800,000     

 

 

 

  Long-Term Incentives1

 

   $

 

2,250,000     

 

 

 

 

1   Mr. Anderson’s long-term incentive is comprised of 60% ($1,350,000) Performance RSUs and 40% ($900,000) service-based RSUs. PRSUs will be earned based on Nielsen achieving approved cumulative financial performance targets over the three-year period commencing January 1, 2019 provided Mr. Anderson is an active employee on the vesting date. RSUs will vest in four equal annual installments commencing on the first anniversary of the grant date provided Mr. Anderson is an active employee on the vesting date.

 

 

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Mr. Anderson received the following compensation awards connected with his hiring:

 

  Compensation

  Element

 

  

$ Value

 

  

Form

 

  

Description

 

  New Hire Inducement    $1,125,000    321,429 Performance Stock Options   

Option to purchase shares of Company common stock (“Performance Options”), with a seven-year term and an exercise price equal to the closing price of Company common stock on the first day of Mr. Anderson’s employment with the Company, vesting ratably on October 26, 2019, 2020 and 2021, subject to (1) continued employment through the applicable vesting date, and (2) the shares of Company common stock having a closing market price of at least $30.75 for at least 21 consecutive trading days prior to October 26, 2021.

 

   $1,125,000    45,732 RSUs   

Vesting in three equal annual installments on October 26, 2019, 2020, and 2021, subject to continued employment through the applicable vesting date.

 

   $400,000    Lump Sum Cash   

Payable in March 2019.

 

  Total New Hire   Inducement    $2,650,000    85% Equity-based and 15% Cash   

  Regular Annual

  Long-Term Incentive

   $1,350,000    PRSUs   

PRSUs will be earned based on Nielsen achieving approved cumulative financial performance targets over the three-year period commencing January 1, 2019 provided Mr. Anderson is an active employee on the vesting date.

 

  (first award made in   February 2019)    $900,000    RSUs   

RSUs will vest in four equal annual installments commencing on the first anniversary of the grant date provided Mr. Anderson is an active employee on the vesting date.

 

  Total Long-Term   Incentive    $2,250,000    100% Equity-based   

In addition, Mr. Anderson’s offer included the reimbursement of expenses incurred in financial planning of up to $15,000 and a health examination reimbursement of up to $2,500.

Summary of Other NEO Pay Decisions

Nielsen has a strong pay for performance culture which serves to align Company goals and performance with pay outcomes for executives. Below are the highlights of NEO pay for 2018:

 

   

Mr. Tavolieri was the only NEO to receive a base salary and AIP target adjustment due to a significant expansion of his role. No other NEOs received pay adjustments as part of their regular compensation package in 2018.

 

   

AIP financial performance targets were not met resulting in a zero percent payout for all eligible NEOs.

 

   

PRSU threshold performance was not met resulting in zero payouts for awards that matured on December 31, 2018.

 

   

In light of the business difficulties and turnover at the executive level, in September, the Compensation Committee determined that it was important to stabilize the organization during this volatile period by ensuring the retention of critical leaders responsible for strategy development, delivering the revised 2018 financial targets and continuing the transformation of the Company over the coming three years. As a result, the Compensation Committee made special one-time equity based retention awards to three NEOs (Messrs. Dale and Tavolieri and Ms. Phillips).

Mitch Barns

Mr. Barns served as our CEO from January 1, 2014 through December 2, 2018 and separated from the Company on December 31, 2018. Following its annual review of Mr. Barns’ 2018 compensation at the end of 2017, the Compensation Committee made no changes to his base salary and annual incentive target, but increased his long-term incentive target from $7,500,000 to $8,000,000 in order to further enhance pay for performance and better align Mr. Barns’ total direct compensation with the median compensation level for CEOs in our executive

 

 

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EXECUTIVE COMPENSATION

 

compensation peer group described under “– Compensation Practices and Governance – Benchmarking.” Details of Mr. Barns’ compensation are set out in the tables below.

 

     

        2017 Actual

 

    

            2018 Target1

 

    

            2018 Actual1

 

   

    % Change from 2017     

 

  Base Salary

 

   $

 

1,000,000

 

 

 

    

 

N/A

 

 

 

   $

 

1,000,000

 

 

 

 

0%     

 

  Annual Incentive

 

   $

 

1,700,000

 

 

 

   $

 

 2,000,000

 

 

 

   $

 

 

2  

 

 
 

-100%     

 

  Long-Term Incentive

 

   $

 

7,500,000

 

 

 

   $

 

8,000,000

 

 

 

   $

 

4,800,000

 

 

 

 

-36%     

 

  One-Time Retention Long-Term Incentive

 

    

 

N/A

 

 

 

    

 

N/A

 

 

 

    

 

N/A

 

 

 

 

N/A     

 

In 2018, Mr. Barns was granted the following long-term incentive equity awards:

 

  Grant Date

 

  

        Grant Type1

 

    

          # Units

 

    

                 Value2

 

    

    Performance Period     

 

  February 21, 2018

 

    

 

PRSUs

 

 

 

    

 

147,601

 

 

 

    

 

$4,800,000

 

 

 

  

2018 - 2020     

 

 

1   40% of Mr. Barns’ annual LTI target, typically granted in October, was not granted due to Mr. Barns’ pending departure from the Company.

 

2   This is the value intended to be granted by the Compensation Committee based on the closing price of our common stock on the grant date. Actual accounting grant date fair values reported in “Tables and Narrative Disclosure” will differ slightly. For the PRSUs, the amount reflected above assumes target level achievement. Per the terms of Mr. Barns’ exit agreement, one-third of the awarded units were forfeited.

Jamere Jackson

Mr. Jackson served as Chief Financial Officer from March 10, 2014 to September 10, 2018. Following its annual review of Mr. Jackson’s compensation, the Compensation Committee made no changes in 2018. Details of Mr. Jackson’s compensation are set out in the tables below.

 

     

        2017 Actual

 

    

            2018 Target1

 

    

            2018 Actual1

 

   

    % Change from 2017     

 

  Base Salary

 

   $

 

750,000

 

 

 

    

 

N/A

 

 

 

   $

 

533,654

 

 

 

 

-29%     

 

  Annual Incentive

 

   $

 

 

680,000

 

 

 

 

 

   $

 

800,000

 

 

 

   $

 

 

2  

 

 
 

-100%     

 

  Long-Term Incentive

 

   $

 

2,550,000

 

 

 

   $

 

2,550,000

 

 

 

   $

 

1,530,000

 

2  

 

 
 

-40%     

 

  One-Time Retention Long-Term Incentive

 

    

 

N/A

 

 

 

    

 

N/A

 

 

 

    

 

N/A

 

 

 

 

N/A     

 

 

1   The amount under “2018 Target” represents the amount intended to be granted to, earned by and paid to the executive. The amount under “2018 Actual” represents the amount actually granted to, earned by and paid to the executive. The amount for “Long-Term Incentive” is the value of the grant based on the closing price of our common stock on NYSE on the grant date. The value reported in the Summary Compensation Table may differ slightly, as that represents the accounting grant date fair value. Mr. Jackson forfeited his 2018 long-term incentive award due to his voluntary resignation. As to the PRSU portion of the “Long-Term Incentive,” the amount included above assumes target level achievement.

 

2   No annual incentive award was made to Mr. Jackson for 2018 due to his voluntary resignation. In addition, Mr. Jackson was not awarded the $1,020,000 RSU LTI grant otherwise due in October, due to his departure from the Company.

In 2018, Mr. Jackson was granted the following long-term incentive equity awards (which were subsequently forfeited due to his voluntary resignation):

 

  Grant Date

 

  

        Grant Type

 

    

          # RSUs/Options

 

    

                 Value1

 

    

    Performance Period     

 

 

  February 21, 20182

 

    

 

PRSUs

 

 

 

    

 

47,048

 

 

 

    

 

$1,530,000

 

 

 

    

 

2018 - 2020     

 

 

 

 

1   This is the value intended to be granted by the Compensation Committee based on the closing price of our common stock on the grant date. Actual accounting grant date values reported in “Tables and Narrative Disclosure” will differ slightly. As to the PRSUs, the amount reflected above assumes target level achievement.

 

2   Mr. Jackson forfeited this award due to his voluntary resignation.

Giovanni Tavolieri

Mr. Tavolieri has served as Chief Technology and Operations Officer since August 1, 2017. In 2018, Mr. Tavolieri’s responsibilities increased significantly when he assumed leadership for our US Buy business. Following its annual review of Mr. Tavolieri’s compensation and in light of his increased responsibilities, the Compensation Committee increased his base salary and annual incentive target by $50,000 each. In addition, Mr. Tavolieri was awarded a one-time special retention award of $2,600,000 as part of the targeted special pay program approved by the

 

 

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Compensation Committee aimed at retaining critical leaders responsible for strategy development, delivering the revised 2018 financial targets and continuing the transformation of the Company over the coming three years. Details of Mr. Tavolieri’s’ compensation are set out in the tables below.

 

     

        2017 Actual

 

    

            2018 Target1

 

    

            2018 Actual1

 

   

    % Change from 2017     

 

  Base Salary

 

   $

 

466,827

 

 

 

    

 

N/A

 

 

 

   $

 

582,500

 

 

 

 

25%     

 

 

  Annual Incentive

 

   $

 

545,000

 

 

 

   $

 

600,000

 

 

 

   $

 

 

2  

 

 

-100%     

 

  Long-Term Incentive

 

    

 

1,300,020

 

 

 

    

 

1,300,000

 

 

 

    

 

1,300,000

 

 

 

 

0%     

 

  One-Time Long-Term Retention Incentive

 

    

 

N/A

 

 

 

    

 

N/A

 

 

 

   $

 

2,600,000

 

3  

 

   

 

1   The amount under “2018 Target” represents the amount intended to be granted to, earned by and paid to the executive. The amount under “2018 Actual” represents the amount actually granted to, earned by and paid to the executive. The amount for “Long-Term Incentive” is the value of the grant based on the closing price of our common stock on the NYSE on the grant date. The value reported in the Summary Compensation Table may differ slightly, as that represents the accounting grant date fair value. For the PRSU portion of the “Long-Term Incentive,” the amount included above assumes target level achievement.

 

2   Based on the Company’s performance no annual incentive award was made to Mr. Tavolieri in 2018.

 

3   One-time long-term retention equity award was 50% RSUs and 50% PSOs with total value of $2,600,000.

In 2018, Mr. Tavolieri was granted the following long-term incentive equity awards:

 

  Grant Date

 

  

        Grant Type

 

    

          # RSUs/Options

 

    

            Value1

 

   

    Performance Period     

 

  February 21, 2018

 

    

 

PRSUs

 

 

 

    

 

23,985

 

 

 

   $

 

780,000

 

 

 

 

2018 - 2020     

 

  October 26, 20182

 

    

 

RSUs

 

 

 

    

 

21,138

 

 

 

   $

 

520,000

 

 

 

 

N/A     

 

  October 26, 20183

 

    

 

RSUs

 

 

 

    

 

52,846

 

 

 

   $

 

1,300,000

 

5  

 

 

N/A     

 

  October 26, 20184

 

    

 

PSO

 

 

 

    

 

371,429

 

 

 

   $

 

1,300,000

 

5  

 

 

ends 10/26/2021     

 

 

1   This is the value intended to be granted by the Compensation Committee based on the closing price of our common stock on the NYSE on the grant date. Actual accounting grant date values reported in “Tables and Narrative Disclosure” will differ slightly. As to the PRSUs, the amount reflected above assumes target level achievement.

 

2   Vesting of these awards will occur in four equal annual installments beginning on October 26, 2019 and ending October 26, 2022.

 

3   Vesting of these awards will occur in three equal annual installments beginning on October 26, 2019 and ending October 26, 2021.

 

4   Vesting of these awards will occur in three equal annual installments beginning on October 26, 2019 and ending October 26, 2021, subject to achieving the stock performance target of $30.75 for 21 consecutive days on the NYSE.

 

5   One-time long-term retention incentive awards that were part of the special pay program aimed at retaining critical leaders.

Eric J. Dale

Mr. Dale served as Chief Legal Officer from August 1, 2015 to January 22, 2019. Following its annual review of Mr. Dale’s compensation, the Compensation Committee made no changes in 2018. Mr. Dale was awarded a one-time special retention award of $2,400,000 as part of the targeted special pay program approved by the Compensation Committee aimed at retaining critical leaders responsible for strategy development, delivering the revised 2018 financial targets and continuing the transformation of the Company over the next three years. The full value of this award was forfeited upon Mr. Dale’s voluntary resignation from the Company. Details of Mr. Dale’s compensation are set forth in the tables below.

 

     

            2017 Actual

 

    

            2018 Target1

 

    

            2018 Actual1

 

   

    % Change from 2017     

 

  Base Salary    $

 

750,000

 

 

 

    

 

N/A

 

 

 

   $

 

750,000

 

 

 

 

0%     

 

  Annual Incentive    $

 

675,000

 

 

 

   $

 

750,000

 

 

 

   $

 

 

2  

 

 

-100%     

 

  Long-Term Incentive    $

 

1,200,000

 

 

 

   $

 

1,200,000

 

 

 

   $

 

2,399,983

 

3  

 

 

100%     

 

  One-Time Long-Term Retention Incentive     

 

N/A

 

 

 

    

 

N/A

 

 

 

   $

 

2,400,000

 

3,4  

 

   

 

1   The amount under “2018 Target” represents the amount intended to be granted to, earned by and paid to the executive. The amount under “2018 Actual” represents the amount actually granted to, earned by and paid to the executive. The amount for “Long-Term Incentive” is the value of the grant based on the closing price of our common stock on the NYSE on the grant date. The value reported in the Summary Compensation Table may differ slightly, as that represents the accounting grant date fair value. For the PRSU portion of the “Long-Term Incentive,” the amount included above assumes target level achievement.

 

2   Based on the Company’s financial performance no annual incentive award was made to Mr. Dale in 2018.

 

 

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3   Awards were forfeited upon Mr. Dale’s voluntary resignation.

 

4   One-time long-term retention equity award was 50% RSUs and 50% PSOs with a total value $2,400,000. This was forfeited upon his voluntary resignation.

In 2018, Mr. Dale was granted the following long-term incentive equity. Due to his voluntary resignation, he will forfeit all grants:

 

  Grant Date   

Grant Type

 

    

# RSUs/Options

 

    

Value1

 

   

Performance Period     

 

  February 21, 2018     

 

PRSUs

 

 

 

    

 

22,140

 

 

 

   $

 

720,000

 

 

 

 

2018 - 2020     

 

  October 26, 20182     

 

RSUs

 

 

 

    

 

19,512

 

 

 

   $

 

480,000

 

 

 

 

N/A     

 

  October 26, 20182     

 

RSUs

 

 

 

    

 

48,780

 

 

 

   $

 

1,200,000

 

3  

 

 
 

N/A     

 

 

  October 26, 20182     

 

PSO

 

 

 

    

 

342,857

 

 

 

   $

 

1,200,000

 

3  

 

 
  ends 10/26/2021     

 

1   This is the value intended to be granted by the Compensation Committee based on the closing price of our common stock on the grant date. Actual accounting grant date values reported in “Tables and Narrative Disclosure” will differ slightly. For the PRSUs, the amount reflected above assumes target level achievement.

 

2   Due to Mr. Dale’s resignation on February 1, 2019, he forfeited all PRSUs, RSUs and PSOs subject to these grants.

 

3   One-time long-term retention incentive awards that were part of the special pay program aimed at retaining critical leaders.

Nancy Phillips

Ms. Phillips has served as Chief Human Resources Officer since January 9, 2017. Following its annual review of Ms. Phillips’ compensation, the Compensation Committee made no changes in 2018. Ms. Phillips was awarded a one-time special retention award of $2,600,000 as part of the targeted special pay program approved by the Compensation Committee aimed at retaining critical leaders responsible for strategy development, delivering the revised 2018 financial targets and continuing the transformation of the Company over the coming three years. Details of Ms. Phillips’ compensation are summarized in the tables below:

 

     

            2017 Actual

 

    

            2018 Target1

 

    

            2018 Actual1

 

   

    % Change from 2017     

 

  Base Salary    $

 

480,769

 

 

 

    

 

N/A

 

 

 

   $ 500,000     4%     
  Annual Incentive    $

 

450,000

 

 

 

   $

 

500,000

 

 

 

   $

 

 

2  

 

 
 

-100%     

 

  Long-Term Incentive     

 

1,300,000

 

 

 

    

 

1,300,000

 

 

 

    

 

1,300,000

 

 

 

 

0%     

 

  One-Time Long-Term Retention Incentive     

 

N/A

 

 

 

    

 

N/A

 

 

 

   $

 

2,600,000

 

3  

 

 
   

 

1   The amount under “2018 Target” represents the amount intended to be granted to, earned by and paid to the executive. The amount under “2017 Actual” represents the amount actually granted to, earned by and paid to the executive. The amount for “Long-Term Incentive” is the value of the grant based on the closing price of our common stock on the NYSE on the grant date. The value reported in the Summary Compensation Table may differ slightly, as that represents the accounting grant date fair value. For the PRSU portion of the Long-Term Incentive, the amount included above assumes target level achievement.

 

2   Based on the Company’s financial performance no annual incentive award was made to Ms. Phillips in 2018.

 

3   One-time long-term retention equity award was 50% RSUs and 50% PSOs with a total value of $2,600,000.

In 2018, Ms. Phillips was granted the following long-term incentive equity awards:

 

  Grant Date   

Grant Type

 

  

# RSUs/Options

 

    

Value1

 

   

Performance Period     

 

  February 21, 2018   

PRSUs

 

    

 

23,985

 

 

 

   $

 

780,000

 

 

 

 

2018 - 2020     

 

  October 26, 20182   

RSUs

 

    

 

21,138

 

 

 

   $

 

520,000

 

 

 

 

N/A     

 

  October 26, 20183   

RSUs

 

    

 

52,846

 

 

 

   $

 

1,300,000

 

5  

 

 
 

N/A     

 

  October 26, 20184   

PSO

 

    

 

371,429

 

 

 

   $

 

1,300,000

 

5  

 

 
 

ends 10/21/2021     

 

 

1   This is the value intended to be granted by the Compensation Committee based on the closing price of our common stock on the grant date. Actual accounting grant date fair values reported in “Tables and Narrative Disclosure” will differ slightly. As to the PRSUs, the amount reflected above assumes target level achievement.

 

2   Vesting of these awards will occur in four equal annual installments beginning on October 26, 2019 and ending October 26, 2022.

 

3   Vesting of these awards will occur in three equal annual installments beginning on October 26, 2019 and ending October 26, 2021.

 

4   Vesting of these awards will occur in three equal annual installments beginning on October 26, 2019 and ending October 26, 2021, subject to achieving the stock performance target of $30.75 for 21 consecutive days on the NYSE.

 

5   One-time long-term retention incentive awards that were part of the special pay program aimed at retaining critical leaders.

 

 

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PRSU Payouts Under the 2016 LTPP

The performance period for our 2016 LTPP ended on December 31, 2018. PRSU grants under this plan were made in February 2016 and their grant date fair value was disclosed in our 2017 proxy statement. In February 2019, the Compensation Committee determined that the PRSUs granted under this plan did not meet threshold performance levels and approved the vesting of zero shares for all participants as outlined in the table below.

2016 LTPP Performance

 

Plan Metrics

Jan 1, 2016 – Dec 31, 2018

 

        

Final Results Based on

      Performance from Jan 1, 2016 – Dec 31, 2018       

 

  Elements

 

  

Performance Target for

100% Payout

         

Result

 

  

Weight

 

  

Payout     

Percentage     

 

  Free Cash Flow1

 

  

$2.85 billion

 

          

$2.734 billion

 

  

60%

 

  

0%     

 

  Relative Total Shareholder Return2

 

  

50th Percentile

 

          

5th Percentile

 

  

40%

 

  

0%     

 

  Total Shares

 

  

N/A

 

          

N/A

 

  

100%

 

  

0%     

 

 

1   The free cash flow LTPP performance measure is the sum of free cash flow as reported in our Annual Report on Form 10-K for each of the fiscal years in the performance period, adjusted to eliminate foreign currency exchange translation impacts. The elimination of foreign currency exchange translation impacts for the 2016-2018 performance period reduced LTPP free cash flow performance results by $5 million. Please see Annex C for additional information on free cash flow in accordance with United States GAAP.

 

2   The relative total shareholder return LTPP performance measure is the change in our stock price over the three-year performance period, assuming monthly reinvestment of dividends, compared to that of a peer group of companies.

2016 LTPP Payouts

 

  Name1   

Target PRSUs Awarded

 

    

Payout

                         Percentage

  

Vested and     

                    Delivered in      

Shares     

 

 
  Mitch Barns     

 

73,146

 

 

 

  

0%

 

    

 

—     

 

 

 

  Jamere Jackson     

 

26,646

 

 

 

  

0%

 

    

 

—     

 

 

 

  Giovanni Tavolieri     

 

6,270

 

 

 

  

0%

 

    

 

—     

 

 

 

  Eric Dale     

 

12,540

 

 

 

  

0%

 

    

 

—     

 

 

 

 

1   Mr. Kenny was hired on December 3, 2018, Mr. Anderson was hired on September 10, 2018 and Ms. Phillips was hired on January 9 2017, and therefore were not participants in the 2016 LTPP.

Below is a table of recent and projected future payouts under our LTPP Plan. Our variable pay programs continue to operate as intended.

 

      2015     2016    Projected 2017       
  Payout Percentage      59.15   0%      0%1       

 

1   Current projection of all performance metrics under the plan is below threshold

Realizable Pay

A significant portion of executive pay is “at risk” and depends on business performance and market conditions. The actual pay earned during the year either as cash or through vesting of previously granted equity awards is referred to as “realizable pay.” Realizable pay is different from the amounts reported in the Summary Compensation Table, which uses the accounting grant date fair value for equity awards.

We define realizable pay for any given year as the sum of:

 

   

cash earned as base salary in that year;

 

   

cash annual incentives and other bonuses earned in that year;

 

   

intrinsic value (share price minus exercise price) of stock option awards vesting in that year using the closing price of our common stock as reported on the NYSE on the last trading day of that year;

 

 

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market value of equity awards vesting in that year using the closing price of our common stock as reported on the NYSE on the last trading day of that year; and

 

   

value of financial planning reimbursements and executive wellness reimbursements as outlined under the “All Other Compensation” column of the Summary Compensation Table.

The table below presents the realizable pay for each of our NEOs for 2017 and 2018 and shows the total amount of compensation reported for each of our NEOs in the Summary Compensation Table for 2018.

 

Realizable Pay           

Total Compensation in Summary

Compensation Table

 
           
     

2017

 

    

2018

 

   

Percentage

Increase/(Decrease)

           

20181

 

    

Percent Variance

to 2018 Realizable

Pay2

 

 
  David Kenny     

 

N/A

 

 

 

   $

 

75,000

 

 

 

   

 

N/A

 

 

 

           $

 

19,804,677

 

 

 

    

 

26,306%

 

 

 

  Mitch Barns    $

 

5,509,179

 

 

 

   $

 

3,224,215

 

3  

 

 
   

 

(41%)

 

 

 

           $

 

10,785,368

 

4  

 

 
    

 

235%

 

 

 

  David Anderson     

 

N/A

 

 

 

    

 

640,000

 

 

 

   

 

N/A

 

 

 

           $

 

2,896,470

 

 

 

    

 

1,107%

 

 

 

  Jamere Jackson5    $

 

3,431,015

 

 

 

    

 

2,147,572

 

 

 

   

 

(37%)

 

 

 

           $

 

2,181,543

 

 

 

    

 

2%

 

 

 

  Giovanni Tavolieri     

 

N/A

 

 

 

   $

 

857,187

 

 

 

   

 

N/A

 

 

 

           $

 

4,375,478

 

 

 

    

 

410%

 

 

 

  Eric J. Dale    $

 

1,602,817

 

 

 

   $

 

1,147,635

 

 

 

   

 

(28%)

 

 

 

           $

 

4,271,880

 

 

 

    

 

272%

 

 

 

  Nancy Phillips    $

 

943,591

 

 

 

   $

 

624,488

 

 

 

   

 

(34%)

 

 

 

           $

 

4,318,093

 

 

 

    

 

591%

 

 

 

 

1   Portion of amount in Summary Compensation Table represented by one-time new hire awards for Messrs. Kenny (99.6%) and Anderson (91.5%) and one-time special retention awards for Messrs. Tavolieri (56.2%) and Dale (59.4%) and Ms. Phillips (60.2%). Mr. Dale forfeited the special retention award upon his voluntary resignation from the Company.

 

2   In all cases, the realized pay in 2018 is significantly lower than the values disclosed in the Summary Compensation Table.

 

3   Excludes severance accruals for Mr. Barns.

 

4   Includes the full value of severance accruals for Mr. Barns.

 

5   The Summary Compensation Table value includes a special payment Mr. Jackson received to cover the loss of his unvested SERP benefit at his prior employer. See “– Tables and Narrative Disclosure – Summary Compensation Table”, footnote 1. Mr. Jackson repaid this sum upon his resignation from the Company.

NEO Compensation Practices

 

 

  What We Do

 

 

 

What We Don’t Do

 

  Emphasize long-term equity in prospective pay increases

 

  Use share ownership guidelines to require all executive officers and non-employee directors to hold a significant amount of Nielsen stock. See “– Compensation Practices and Governance – Share Ownership Guidelines”.

 

  Specify maximum payout thresholds on all individual awards granted under our AIP

 

  Recoup both short-term and long-term incentive awards in the event of financial restatement as a result of intentional misconduct on the part of the executive, and where the award would have been lower as a result of the restatement. This Clawback Policy is shown under “– Compensation Practices and Governance – Other Policies and Guidelines – Clawback Policy.”

 

  Include double trigger provisions for all plans that contemplate a change in control

 

LOGO Use excise tax gross-up agreements

 

LOGO Permit hedging of shares

 

LOGO Permit pledging of share-based awards and shares subject to share ownership guidelines

 

LOGO Provide tax gross-ups on perquisites

 

LOGO Provide dividend equivalents on unearned PRSUs granted under the LTPP

 

LOGO Re-price options without shareholder approval

 

 

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EXECUTIVE COMPENSATION     

 

2018 Pay Decisions and Performance

Total Company Financial Performance

 

  Metric   

Target

 

  

Result     

 

  Adjusted EBITDA growth % over prior year at constant currency1   

1%

 

  

-7.9%     

 

  Revenue growth at constant currency1   

3.0%

 

  

-0.7%     

 

  Free Cash Flow   

$800MM

 

  

$542MM     

 

 

1   We calculate constant currency percentages by converting our prior-period local currency financial results using the current period foreign currency exchange rates and comparing these adjusted amounts to our current period reported results.

How Pay Decisions are Made

Annual Base Salaries

Base salary is the only fixed component of our executive officers’ compensation. The Compensation Committee considers benchmark compensation information for executives serving in similar positions at peer companies and general market survey data supplied by its compensation consultant, Meridian Compensation Partners, LLC (“Meridian”), to help ensure that base salaries of the Company’s NEOs are competitive in the marketplace and are serving their purpose to attract and retain top talent.

The Compensation Committee considers salary increases for the Company’s executive officers generally in 24-36+ month intervals unless there is a change in role or circumstances that warrant consideration.

Executive officers are not involved in determining their own compensation.

Annual Incentive Plan

The purpose of the AIP is to motivate executives to accomplish short-term business performance goals that contribute to long-term business objectives. The Compensation Committee approves the applicable performance measures and performance targets under the plan at the beginning of each year. At the beginning of the fiscal year following the end of the performance period the Company’s and the executives’ actual achievement under the performance measures and performance targets is reviewed and assessed, and the Compensation Committee approves the cash amounts payable to such executives. The NEOs participate in the same incentive plan as the Company’s senior managers.

In determining the target opportunity for each NEO, the Compensation Committee considered benchmark compensation information for executives serving in similar positions at peer companies and general market survey data provided by Meridian; executives’ total direct compensation mix; changes in role and job responsibilities; and Company financial performance and individual performance.

Under the AIP, the maximum potential annual incentive payout for the NEOs is 200% of their annual incentive target.

Annual Incentive Plan Payout Formula

 

   

The amount at which the AIP funds and that is available for payouts is derived formulaically based on AIP Adjusted EBITDA and revenue growth against a target and is expressed as a “funding percentage”; see – “Performance – Payout Formula” table below.

 

   

To assess Adjusted EBITDA performance for annual incentive funding, we recalculate Adjusted EBITDA as defined in our Annual Report on Form 10-K for the corresponding performance period to eliminate the impact of foreign currency on the year’s result by using a standard exchange rate established at the beginning of the performance period. We refer to this performance measure under the AIP as “AIP Adjusted EBITDA”.

 

   

Initial individual payouts are determined by applying the “funding percentage” to the individual’s target award opportunity.

 

 

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Final individual payouts are determined after a full assessment of:

 

   

Each individual’s contribution to overall Company performance; see “– 2018 Pay Decisions and Performance – Total Company Financial Performance”;

 

   

Other quantitative objectives; and

 

   

A qualitative assessment to take into account, as appropriate, degree of difficulty, extraordinary market circumstances, and leadership impact.

 

   

Based on the full assessment, individual payouts may be adjusted up or down from the initial payout to ensure that total performance is reflected in the final payouts.

 

   

Aggregate payouts under the AIP cannot exceed the amount of the funded plan pool.

 

   

Both AIP Adjusted EBITDA and revenue metrics operate independently; however revenue only funds if AIP Adjusted EBITDA meets threshold performance.

Performance targets are aggressive and achievable

 

   

The Compensation Committee believes that AIP Adjusted EBITDA and revenue growth are highly correlated to the creation of value for our shareholders and are an effective measure of the NEOs’ contributions to short-term Company performance.

The AIP Adjusted EBITDA and revenue performance targets are the Board-approved operating plan targets

 

   

In establishing the AIP Adjusted EBITDA and revenue growth targets, the Compensation Committee considered the Company’s historical performance against prior year targets and concluded that the process had been effective in establishing targets that were both aggressive and achievable. It noted that, over the prior five years, both AIP Adjusted EBITDA and revenue had grown at challenging annual growth rates and, in each year, had been assessed as either on target or closely approaching target.

Funding formula and individual payouts

 

    

The formula correlates levels of AIP Adjusted EBITDA and revenue performance, as defined above, to funding/initial payout percentages. This formula was weighted 75% to AIP Adjusted EBITDA, and 25% to revenue performance. A 100% funding percentage is achieved if performance for both metrics meets the performance targets as approved by the Compensation Committee at the beginning of the plan year. If performance falls below the Minimum threshold, no payouts are awarded. Funding and payouts are capped at 200%.

Performance – Payout Formula

 

    

AIP Adjusted EBITDA

 

    

Revenue

 

 

Performance Milestones

 

  

Growth vs Prior Year     

(Index %)     

 

    

Funding/     

Initial Payout %1     

 

    

Growth vs Prior Year     

(Index %)     

 

    

Funding/     

Initial Payout %1     

 

 

Maximum

 

    

 

109%     

 

 

 

    

 

200%     

 

 

 

    

 

106%     

 

 

 

    

 

200%     

 

 

 

Exceptional

 

    

 

105%     

 

 

 

    

 

150%     

 

 

 

    

 

105%     

 

 

 

    

 

167%     

 

 

 

Target

 

    

 

101%     

 

 

 

    

 

100%     

 

 

 

    

 

103%     

 

 

 

    

 

100%     

 

 

 

Minimum

 

    

 

94%     

 

 

 

    

 

50%     

 

 

 

    

 

100%     

 

 

 

    

 

50%     

 

 

 

< Minimum

 

    

 

<94%     

 

 

 

    

 

0%     

 

 

 

    

 

<100%     

 

 

 

    

 

0%     

 

 

 

 

1   The AIP funding percentage and initial payout percentage are determined using linear interpolation if actual performance falls between any two performance levels.

 

 

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2018 Results

In February 2019, the Compensation Committee evaluated performance under the 2018 AIP. The Compensation Committee determined that the Company’s AIP Adjusted EBITDA growth index and revenue growth achieved in 2018 under the AIP did not meet threshold performance yielding an AIP funding percentage of zero percent for all eligible NEOs.

2019 Changes

The Compensation Committee regularly reviews incentive pay metrics to make sure those are aligned with the company’s strategies and financial goals as well as relevant metrics to drive management performance around those goals. As a result of the most recent updated analysis, the Compensation Committee made the following changes to performance metrics and weightings for 2019. Revenue and Adjusted EBITDA margin performance will each represent 35% of the pool. Both Adjusted EBITDA margin and revenue must meet threshold performance for either metric to fund. Free cash flow performance will fund 30% of the pool. Each of the performance targets are the Board-approved operating plan targets for 2019. These changes are meant to better align the annual performance targets with variables that are tied to the company’s growth, profitability, and cash generation.

Long-Term Incentives (LTI)

The purpose of long-term incentive awards is to focus executives on long-term sustainable performance and to align executive rewards with long-term returns delivered to shareholders. Currently, all long-term incentives are delivered as equity-based awards.

 

 

 

 

LTI MIX – 60% IS SUBJECT TO QUANTIFIABLE LONG-TERM PERFORMANCE

 

 

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Equity-based awards are made to executives, other employees and directors pursuant to the Amended and Restated Nielsen 2010 Stock Incentive Plan (as amended, the “2010 Plan”). Our goal is to provide at least 50% of the NEOs’ total direct compensation pay mix in long-term equity, progressing to 60% over time, and to have approximately 60% of the LTI subject to quantifiable long-term performance metrics, which are granted as PRSUs.

Our practice is to grant the service-based portion of LTI as RSUs to align with market practice in the digital marketplace in which we compete for top talent and in recognition of its belief that RSUs incent executives to improve performance through share price appreciation, as well as, provide a powerful retention effect.

Prior to finalizing award sizes, the Compensation Committee considers:

 

   

current Company financial performance and individual performance;

 

   

general industry market benchmarks and peer group data provided by its compensation consultant, Meridian;

 

   

executives’ total direct compensation mix and prior year award values; and

 

   

changes in role and job responsibilities.

 

 

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Given 2018’s business difficulties and in light of the turnover at the executive level, in September the Compensation Committee decided to launch a targeted special pay program aimed at retaining critical leaders responsible for strategy development, delivering the revised 2018 financial targets and continuing the transformation of the Company over the coming three years. As described further under “– Summary of Other NEO Pay Decisions” above, select senior leaders, including certain of the NEOs, received equity-based special one-time retention awards. The awards were designed to provide meaningful retention value and reward superior stock price performance. For each participant, half of the award value is denominated in PSOs subject to a challenging stock price growth hurdle of 25%. The remaining award value is denominated in service-based RSUs for their retention value as well as alignment with stock price performance. Both components vest ratably over 3 years except that PSOs will only become exercisable if the stock price goal is achieved for 21 or more consecutive days within the three-year period.

Performance Restricted Stock Units Awarded Under the Long-Term Performance Plan (LTPP)

2018 Plan

LTPP participants are awarded a target number of PRSUs that are earned subject to the Company’s performance against three cumulative three-year performance metrics. In addition to free cash flow and relative total shareholder return (“TSR”), the Compensation Committee added three-year revenue CAGR as a performance metric for the 2018 LTPP to reinforce the importance of driving long-term revenue growth. For the 2018 plan, 50% of the total LTI award opportunity will be based on free cash flow performance against target, 25% will be based on relative total shareholder return and 25% will be based on three-year revenue CAGR.

The performance period for the 2018 grant commenced on January 1, 2018 and ends on December 31, 2020. Grants are denominated in RSUs and settled in Nielsen shares. Based on the performance at the end of the three-year period, executives may earn less or more than the target PRSUs granted. Relative total shareholder return below the 30th percentile of our peer group, revenue CAGR below 3% or free cash flow performance below 85% of the free cash flow target will result in zero percent payout for that metric. Payouts for each metric are calculated independently of each other. The maximum payout for each metric is 200%. In the case of absolute negative total shareholder return of the Company over the performance period, payments under the relative total shareholder return component of the plan are capped at 100% of target.

The table below summarizes the LTPP performance-payout matrix for the 2018 cycle.

 

Plan Design1

 

                               

Metric

 

  

Weight

 

          

Threshold

 

  

Target

 

  

Maximum

 

Free Cash Flow

 

    

 

50%

 

 

 

   Performance

 

   85%

 

   100%

 

   120%

 

              Payout

 

   50%

 

   100%

 

   200%

 

Relative TSR

 

    

 

25%

 

 

 

   Performance

 

   30th Percentile

 

   50th Percentile

 

   75th Percentile

 

              Payout

 

   50%

 

   100%

 

   200%

 

Revenue

 

    

 

25%

 

 

 

   Performance

 

   3% CAGR

 

   4% CAGR

 

   4.5% CAGR

 

              Payout

 

   50%

 

   100%

 

   200%

 

 

1   The performance metrics operate independently.

Relative Total Shareholder Return Peer Group

Each year, the Compensation Committee reviews the peer group in order to determine the appropriate peer companies used to measure our relative total shareholder return for grants made that year under the LTPP. The peer group for determining achievement under relative total shareholder return is distinct from the peer group used to evaluate grants made that year and set compensation levels discussed under “— Compensation Practices and Governance — Benchmarking.” In their review of the peer group used to measure relative total shareholder return, the Compensation Committee considers the following:

 

   

companies in businesses similar to Nielsen and/or representative of the markets it serves;

 

 

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companies with similar economic profiles to Nielsen; and

 

   

companies with historical stock price correlation to Nielsen’s stock price.

Based on this review, the Compensation Committee made no changes to the 2017 relative total shareholder return peer group for 2018 (except GfK SE was removed because that company was no longer publicly traded).

 

2018 LTPP Peer Group

 

     

Accenture plc

 

  

MSCI Inc.

 

Dun & Bradstreet Corporation

 

  

Omnicom Group, Inc.

 

Equifax Inc.

 

  

Publicis Groupe (ADR)

 

Experian plc

 

  

RELX (NV)

 

FactSet Research Systems Inc.

 

  

S&P Global, Inc.

 

Gartner Inc

 

  

Thomson Reuters Corporation

 

IHS Markit Ltd.

 

  

Verisk Analytics, Inc.

 

The Interpublic Group of Companies, Inc.

 

  

Wolters Kluwer (NV/ADR)

 

IQVIA Holdings Inc. (formerly Quintiles IMS Holdings Inc.)

 

  

WPP plc (ADR)

 

Moody’s Corporation

 

    

2019 Changes

The Compensation Committee made the following changes to the 2019 performance plan. The performance metrics will include three-year revenue compound annual growth (no change versus 2018) and adjusted earnings per share (“EPS”) (new in 2019 and as defined in Annex C). The weightings of the metrics will be 50% on revenue growth and 50% on adjusted EPS. Relative TSR performance, which had been a metric in the past, will become a modifier to the initial payout factor established through revenue growth and EPS performance. In making these changes, the Compensation Committee considered various inputs, including key measures that will drive long-term value and consideration of relative shareholder value. The Relative TSR peer group will remain the same for the 2019 PRSU plan except that Dun & Bradstreet Corporation has been removed from the peer group because that company is no longer publicly traded.

 

 

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EXECUTIVE COMPENSATION     

 

Compensation Practices and Governance

Compensation Committee

The Compensation Committee regularly reviews the philosophy and goals of the executive compensation program and assesses the effectiveness of compensation practices and processes. The Compensation Committee sets performance goals and assesses performance against these goals. The Compensation Committee considers the recommendations, the peer group benchmark compensation information and general market survey data provided by its independent consultant as well as the judgment of the CEO on the performance of his direct reports. The CEO does not participate in the Compensation Committee discussion regarding his own compensation. The Compensation Committee makes its decisions based on its assessment of both Nielsen and individual performance against goals, as well as on its judgment as to what is in the best interests of Nielsen and its shareholders.

The responsibilities of the Compensation Committee are described more fully in its charter, which is available on the Corporate Governance page of our website at www.nielsen.com/investors under Corporate Governance: Governance Documents: Compensation Committee Charter. In fulfilling its responsibilities, the Compensation Committee is entitled to delegate any or all of its responsibilities to subcommittees of the Compensation Committee. The Compensation Committee may delegate to one or more officers of the Company the authority to make grants and awards of cash or options or other equity securities to any non-Section 16 officer of the Company under the Company’s incentive-compensation or other equity-based plans as the Compensation Committee deems appropriate and in accordance with the terms of such plan; so long as such delegation is in compliance with the relevant plan and subject to the laws of England and Wales and the Company’s articles of association.

Independent Compensation Consultant

The Compensation Committee retains Meridian as its compensation consultant. Meridian has provided peer group benchmark compensation information, general market survey data and perspective on executive and independent director compensation and related governance. Meridian and its affiliates did not provide any services to Nielsen or its affiliates in 2018 other than executive and director compensation consulting to the Compensation Committee. Discussions between Meridian and Nielsen management are limited to those discussions necessary to complete work on behalf of the Compensation Committee.

The Compensation Committee determined that Meridian and its lead consultant for Nielsen satisfy the independence factors described in the NYSE listing rules. The Compensation Committee also determined that the work performed by Meridian in 2018 did not raise any conflict of interest.

 

 

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Benchmarking

The Compensation Committee uses the executive compensation of a peer group of companies, selected for their business relevance and size appropriateness to Nielsen, as one of many considerations when making executive compensation pay decisions. To account for differences in Nielsen’s size compared to market benchmarks, the market data are statistically adjusted as necessary to allow for valid comparisons to similarly-sized companies. The peer group information may also be supplemented by general industry survey data selected by Meridian to provide reasonable benchmarks for a Company of Nielsen’s size and business type. After a review by the Compensation Committee, no changes were made to the peer group for 2018.

 

2018 Peer Group

 

     

Adobe Systems Incorporated

 

  

The Interpublic Group of Companies, Inc.

 

Alliance Data Systems Corporation

 

  

IQVIA Holdings Inc.

 

Automatic Data Processing, Inc.

 

  

Moody’s Corporation

 

Cognizant Technology Solutions Corporation

 

  

Omnicom Group, Inc

 

Equifax Inc.

 

  

S&P Global, Inc.

 

Experian plc

 

  

salesforce.com Inc.

 

Fiserv, Inc.

 

  

Thomson Reuters Corporation

 

IHS Markit Ltd.

 

  

Verisk Analytics, Inc.

 

Consideration of Risk

The Compensation Committee conducted a risk assessment of Nielsen’s 2018 pay practices, which included the review of a report from Meridian. As a result of this assessment, the Compensation Committee concluded that it believes that Nielsen’s pay programs are not reasonably likely to have a material adverse effect on Nielsen, its business and its value. Specifically, the Compensation Committee noted the following:

 

   

Good balance of fixed and at-risk compensation, including a good balance of performance in LTI plans.

 

   

Overlapping vesting periods that expose management, including the CEO, to consequences of their decision-making for the period during which the business risks are likely to materialize.

 

   

Adjusted EBITDA and revenue performance, Company-wide financial metrics, funds annual incentives.

 

   

Payouts under the AIP and LTPP are capped at 200% of a recipient’s target award opportunity.

 

   

A small number of associates receive commission and sales incentive payments. Nielsen management completed an annual review of their commission and sales incentives to ensure that they do not provide employees with an incentive to take unexpected or higher levels of risk.

 

   

Nielsen introduced a share purchase plan in 2016, which provides employees with the opportunity to purchase shares through payroll deduction. The purchase of shares aligns the interests of employees with the interests of shareholders and increases employee focus on longer-term performance. As of December 2018, the program has been rolled out to ~55% of global associates.

 

   

Nielsen has continued to expand the equity eligible population. Increasing ownership creates better alignment with investors and helps to discourage employees from taking risky decisions that could be detrimental to Nielsen over the long run.

 

   

Executive compensation is benchmarked annually.

 

   

Compensation Committee retains an independent consultant.

 

   

Significant share ownership requirements for executives and independent directors.

 

   

Nielsen has a compensation clawback policy and anti-hedging policy.

 

   

Pledging of shares subject to share ownership requirements is prohibited.

 

   

Nielsen has a robust code of conduct and whistleblower policy.

 

 

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Share Ownership Guidelines

To ensure strong alignment of executive interests with the long-term interests of shareholders, executives are required to accumulate and maintain a meaningful level of share ownership in the Company.

The table below presents the guidelines and actual share ownership as of December 31, 2018 for each of our NEOs.

 

Name

 

  

Guideline

 

      

Guideline Shares1

 

                         Share Ownership2  

Mr. Kenny

 

    

 

6 x salary

 

 

 

      

 

334,300

 

 

 

    

 

541,790

 

 

 

Mr. Anderson3

 

    

 

3 x salary

 

 

 

      

 

102,900

 

 

 

    

 

46,323

 

 

 

Mr. Tavolieri

 

    

 

3 x salary

 

 

 

      

 

77,200

 

 

 

    

 

118,971

 

 

 

Mr. Dale

 

    

 

3 x salary

 

 

 

      

 

96,400

 

 

 

    

 

101,403

 

 

 

Ms. Phillips

 

    

 

1 x salary

 

 

 

      

 

21,400

 

 

 

    

 

92,428

 

 

 

 

1   The guideline shares were reset using $23.33, the closing price of our common stock on the NYSE on December 31, 2018.

 

2   Eligible shares include beneficially-owned shares held directly or indirectly, jointly-owned shares and unvested RSUs.

 

3   Mr. Anderson is expected to meet his ownership guidelines by 2020; he may not sell or dispose of shares for cash unless the share ownership guidelines are satisfied.

Other Policies and Guidelines

Perquisites

We provide our NEOs with limited perquisites, reflected in the “All Other Compensation” column of the Summary Compensation Table and described in the footnotes. NEOs may claim financial planning and executive wellness expenses capped each year at $15,000 and $2,500, respectively. In very limited circumstances, we may permit NEOs and their family members to access our contractual arrangement for private aircraft for their personal use. None of the NEOs used the aircraft for personal use in 2018. In certain circumstances, where necessary for business purposes, we also provide reimbursement for relocation expenses.

Severance

We believe that severance protections play a valuable role in attracting and retaining key executive officers. The terms of our policy are described in further detail under “– Tables and Narrative Disclosure – Potential Payments Upon Termination or Change in Control”.

Change in Control

Equity awards made in 2011 or later, under the 2010 Plan do not vest automatically solely in the event of a change in control. The treatment of unvested equity awards upon a change in control is described in further detail under “– Tables and Narrative Disclosure – Potential Payments Upon Termination or Change in Control.”

Clawback Policy

Our clawback policy requires the CEO and his executive direct reports, in all appropriate cases, to repay or forfeit any bonus, short-term incentive award or amount, or long-term incentive award or amount awarded to the executive, and any non-vested equity-based awards previously granted to the executive if:

 

   

The amount of the incentive compensation was calculated based upon the achievement of certain financial results that were subsequently the subject of a restatement or the correction of a material error;

 

   

The executive engaged in intentional misconduct that caused or partially caused the need for the restatement or caused or partially caused the material error; and

 

   

The amount of the incentive compensation that would have been awarded to the executive, had the financial results been properly reported, would have been lower than the amount actually awarded.

 

 

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EXECUTIVE COMPENSATION     

 

Hedging Prohibition

As part of our securities trading policy, all employees, including our NEOs, and non-employee directors are prohibited from engaging in short-selling of our securities, trading activity designed to profit from fluctuations in the price of our securities or in hedging transactions involving our securities (including forward contracts, swaps, exchange funds, puts, calls, options).

Other Benefits

The CEO and other NEOs are eligible to participate in the health and welfare, defined contribution 401(k), and deferred compensation plans made available, per eligibility requirements, to all employees.

Tax Implications

The Compensation Committee takes into account the various tax and accounting implications of compensation. When determining amounts of equity grants to executives and employees, the Compensation Committee also examines the accounting cost associated with the grants.

Certain of the Company’s incentive compensation programs are intended to allow the Company to make awards to executive officers that are deductible under Section 162(m) of the Internal Revenue Code as qualifying performance-based compensation, which provision otherwise sets limits on the tax deductibility of compensation paid to a company’s most highly compensated executive officers. Commencing with the Company’s 2018 fiscal year, the performance-based compensation exception to the deductibility limitations under Section 162(m) no longer applies (other than with respect to certain “grandfathered” performance-based awards granted prior to November 2, 2017), and the deduction limitation under Section 162(m) generally applies to compensation paid to any of our then current or former named executive officers. The Compensation Committee may continue to seek ways to limit the impact of Section 162(m) of the Internal Revenue Code. However, the Compensation Committee believes that the tax deduction limitation should not compromise the Company’s ability to establish and implement compensation and incentive programs that support the compensation objectives discussed above. Accordingly, achieving these objectives and maintaining required flexibility in this regard is expected to result in compensation that is not deductible for federal income tax purposes.

 

 

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based upon this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (or any amendment thereto).

Submitted by the Compensation Committee of the Company’s Board of Directors:

Harish Manwani (Chairperson)

Guerrino De Luca

Robert C. Pozen

Lauren Zalaznick

 

 

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EXECUTIVE COMPENSATION     

 

 

 

TABLES AND NARRATIVE DISCLOSURE

Summary Compensation Table

The following table presents information regarding compensation to our NEOs for the periods indicated.

 

  Name and

  Principal Position

  Year    

Salary

($)

   

Bonus1

($)

   

Stock

Awards2

($)

   

Option

Awards3

($)

   

Non-Equity

Incentive Plan

Compensation

($)

   

Change in
Pension

Value and

Nonqualified

Deferred

Compensation

Earnings4

($)

   

All Other

Compensation5

($)

   

Total

($)

 
  (a)   (b)     (c)     (d)     (e)     (f)     (g)     (h)     (i)     (j)  

  David Kenny

  Chief Executive Officer

    2018       75,000       1,500,000       15,142,776       3,086,901                         19,804,677  
                                                                       

  Mitch Barns

  Chief Executive Officer

    2018       1,000,000             4,124,341                   (5,923     5,666,950       10,785,368  
    2017       1,000,000             7,467,431             1,700,000       11,553       23,210       10,202,194  
    2016       1,000,000             5,737,698       1,657,089       1,700,000       3,186       24,516       10,122,489  

  David Anderson

  Chief Financial Officer

  and Chief Operating Officer

    2018       240,000       400,000       1,125,007       1,125,002                   6,462       2,896,470  
                                                                       

  Jamere Jackson

  Chief Financial Officer

    2018       533,654       325,000       1,314,639                         8,250       2,181,543  
    2017       750,000       325,000       2,538,946             680,000             8,100       4,302,046  
    2016       741,154       325,000       2,124,905       607,602       680,000             7,950       4,486,610  

  Giovanni Tavolieri

  Chief Product and   Technology Officer for

  Nielsen Global Connect

    2018       582,500             2,490,207       1,300,002                   2,769       4,375,478  
                                                                       

  Eric J. Dale

  Chief Legal Officer

    2018       750,000             2,298,630       1,200,000                   23,250       4,271,880  
    2017       750,000             1,194,774             675,000             23,100       2,642,874  
    2016       750,000             1,069,441       331,416       675,000             22,950       2,848,807  

  Nancy Phillips

  Chief HR Officer

    2018       500,000             2,490,207       1,300,002                   27,885       4,318,093  
    2017       480,769             1,294,370             450,000             285,091       2,510,230  

 

1   Bonus
    For Mr. Kenny, the $1,500,000 amount shown was paid in December 2018 to compensate for the loss of the 2018 annual incentive payout from his former employer. If Mr. Kenny resigns voluntarily without Good Reason or is terminated for Cause within one-year of receiving the payment, Mr. Kenny must repay the amount in full. See “New CEO and CFO Compensation Arrangements” above.
    For Mr. Anderson, the $400,000 amount shown in 2018 is a guaranteed bonus that was paid on March 8, 2019.
    For Mr. Jackson, the $325,000 amount shown in years 2016, 2017 and 2018 is the amount of the annual installments he received of a $1,300,000 payment (over 4 years) which is paid in connection with his hire date of March 10, 2014 and meant to compensate him for the loss of his unvested SERP benefit from his previous employer. Mr. Jackson is required to repay each payment in full if his employment terminates within one year following its receipt unless such termination is by the Company without “cause” or is by Mr. Jackson for “good reason.” The 2018 payment was repaid upon Mr. Jackson’s voluntary termination without good reason in September 2018.

 

2   Stock Awards
    Represents the aggregate grant date fair value of the equity-based awards granted to each NEO calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation – Stock Compensation (the “FASB ASC Topic 718”). For a discussion of the assumptions and methodologies used to value the awards reported in column (e), please see Note 12 “Stock-Based Compensation” to our audited consolidated financial statements, included in our Annual Report on Form 10-K for the year ended December 31, 2018. All numbers exclude estimates of forfeitures. No awards were subject to re-pricing or material modifications. Further, in accordance with the SEC’s rules, dividend equivalents that accrued on the executives’ RSUs and PRSUs granted in 2018 are not reported above because dividends were factored into the grant date fair value of these awards.

 

    Values for awards made in 2018:
    PRSUs – Target amounts granted on February 21, 2018 under the LTPP, based on the probable outcome of the relevant performance conditions — Messrs. Barns — $4,124,341, Jackson — $1,314,639, Tavolieri — $670,201, Dale — $618,647 and Ms. Phillips — $670,201. The maximum awards at the date of grant are as follows: Messrs. Barns — $7,302,559, Jackson — $2,327,700, Tavolieri — $1,186,658, Dale — $1,095,377 and Ms. Phillips — $1,186,658. Upon termination, Mr. Barns forfeited one-third of the potential value of the 2018 PRSU award.

 

 

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    Regular Annual RSUs – Amounts were awarded to the NEOs on October 26, 2018 as follows: Messrs. Tavolieri — $519,995 and Dale — $479,995 and Ms. Phillips — $519,995.
    Retention RSUs – Amounts were awarded to the NEOs on October 26, 2018 as follows: Messrs. Tavolieri — $1,300,012 and Dale — $1,199,988 and Ms. Phillips — $1,300,012. Mr. Dale forfeited this award upon his voluntary termination from the Company.
    Make-whole RSUs –RSUs were granted to Mr. Kenny on December 3, 2018 — $13,742,766.
    New hire inducement RSUs –RSUs were granted to Mr. Anderson on October 26, 2018 — $ 1,125,007 and to Mr. Kenny on December 3, 2018 — $1,400,010.

 

    Of the PRSUs granted in 2018 that vest according to free cash flow, the grant date fair value was computed in accordance with FASB ASC Topic 718 based upon the probable outcome of the performance conditions as of the grant date. Assuming the highest level of performance achievement as of the grant date, the grant date fair value of the PRSUs that vest according to free cash flow would have been: Mr. Barns — $4,237,625; Mr. Jackson — $1,350,748; Mr. Tavolieri — $688,609; Mr. Dale — $635,639; and Ms. Phillips — $688,609. Of the PRSUs granted in 2018 that vest according to CAGR, the grant date fair value was computed in accordance with FASB ASC Topic 718 based upon the probable outcome of the performance conditions as of the grant date. Assuming the highest level of performance achievement as of the grant date, the grant date fair value of the PRSUs that vest according to CAGR would have been: Mr. Barns — $2,118,812; Mr. Jackson — $675,374; Mr. Tavolieri — $344,305; Mr. Dale — $317,820; and Ms. Phillips — $344,305. As the PRSUs granted in 2018 that vest according to relative shareholder return are subject to market conditions as defined under FASB ASC Topic 718 and were not subject to performance conditions as defined under FASB ASC Topic 718, they had no maximum grant date fair values that differed from the grant date fair values presented in the table.

 

3   Option Awards
     Represents the aggregate grant date fair value of stock options awarded to each NEO calculated in accordance with FASB ASC Topic 718. For a discussion of the assumptions and methodologies used to value the awards reported in column (f), please see Note 13 “Stock-Based Compensation” to our audited consolidated financial statements, included in our Annual Report on Form 10-K for the year ended December 31, 2018. All numbers exclude estimates of forfeitures. No awards were subject to repricing or material modifications.

 

    Retention Performance Stock Options: Amounts were awarded to the NEOs on October 26, 2018 as follows: Messrs. Tavolieri — $1,300,002 and Dale — $1,200,000 and Ms. Phillips — $1,300,002. Mr. Dale forfeited this award upon his voluntary termination from the Company.
    New Hire Performance Stock Options: PSOs were granted to Mr. Anderson on October 26, 2018 — $ 1,125,002 and to Mr. Kenny on December 3, 2018 — $1,466,901.
    Premium Performance Stock Options: Awards were granted on December 3, 2018 to Mr. Kenny — $1,620,000.

 

4   Change in Pension Value and Nonqualified Deferred Compensation Earnings
    The amount indicated for Mr. Barns represents the actuarial change in pension value during 2018 relating to the Nielsen qualified plan and non-qualified excess plan. See “– Pension Benefits for 2018.”

 

5   All Other Compensation (2018 values)
    Mr. Barns: financial planning expenses: $15,000; executive wellness expenses: $2,500; retirement plan contributions: $8,250; Health Savings Account Plan contributions: $1,200; and severance accruals: $5,640,000.
    Mr. Anderson: retirement plan contributions: $6,462.
    Mr. Jackson: retirement plan contributions: $8,250.
    Mr. Tavolieri: retirement plan contributions: $2,769.
    Mr. Dale: financial planning expenses: $15,000 and retirement plan contributions: $8,250.
    Ms. Phillips: financial planning expenses: $15,000; relocation expenses: $4,635; and retirement plan contributions: $8,250.

 

 

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EXECUTIVE COMPENSATION     

 

Grants of Plan-Based Awards in 2018

The following table presents information regarding grants to our NEOs during the fiscal year ended December 31, 2018.

 

         

Estimated Future Payouts

Under Non-Equity Incentive Plan  Awards1

         

Estimated Future Payouts

Under Equity Incentive Plan Awards

                         

  Name

  (a)

 

Grant Date

(b)

   

Threshold

($)

(c)

   

Target

($)

(d)

   

Maximum

($)

(e)

          

Threshold3

(#)

(c)

   

Target4

(#)

(d)

   

Maximum5

(#)

(e)

   

All Other

Stock

Awards:

Number of

Shares of

Stocks or

Units

(#)

(i)

   

All Other

Options

Awards:

Number of

Securities

Underlying

Options

(#)

(j)

   

Exercise

or Base

Price of

Option

Awards

($/Sh)

(k)

   

Grant

Date

Fair Value

of Stock

and

Option

Awards6

($)

(l)

 
  David Kenny                                                                   $        
    12/3/2018