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.     )

 

 

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☐		Soliciting Material Pursuant to § 240.14a-12

TransUnion

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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March 27, 2019

Dear Fellow Stockholders:

I am pleased to invite you to join our Board of Directors and senior leadership for our 2019 Annual Meeting of Stockholders (Annual Meeting), which will be held on Wednesday, May 8, 2019, at 12:00 p.m. Central Daylight Time at the offices of Latham & Watkins LLP, 330 North Wabash Avenue, Suite 2800, Chicago, Illinois 60611.

The attached Notice of Annual Meeting of Stockholders and proxy statement will serve as your guide to the business to be conducted at the meeting. We are mailing a Notice of Internet Availability of Proxy Materials (Notice) to our stockholders. We believe the Notice process allows us to provide our stockholders with the information they desire in a timely manner, while saving costs and reducing the environmental impact of our Annual Meeting. The Notice contains instructions on how to access our 2018 Annual Report (which includes our 2018 Form 10-K), proxy statement and proxy card over the Internet, as well as instructions on how to request a paper copy of the materials, if desired.

Your vote is very important to us. We encourage you to sign and return your proxy card and/or vote by telephone or via the Internet following the instructions on the Notice as soon as possible, so that your shares will be represented and voted at the Annual Meeting. Instructions on how to vote are on page 5.

We urge you to read the accompanying proxy statement carefully and to vote FOR the director nominees proposed by the Board of Directors and FOR the other proposals in accordance with the recommendations of the Board of Directors.

On behalf of your Board of Directors, thank you for your confidence in TransUnion. We look forward to your continued support.

 

 

 

Jim Peck

President and Chief Executive Officer

555 West Adams Street

Chicago, Illinois 60661

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To be held on Wednesday, May 8, 2019

12:00 p.m. Central Daylight Time

The 2019 Annual Meeting of Stockholders of TransUnion (Annual Meeting) will be held at 12:00 p.m. Central Daylight Time on Wednesday, May 8, 2019, at the offices of Latham & Watkins LLP, 330 North Wabash Avenue, Suite 2800, Chicago, Illinois 60611, for the following purposes:

 

1.

To elect each of George M. Awad, Christopher A. Cartwright, Siddharth N. (Bobby) Mehta and Andrew Prozes to the Board of Directors as a Class I director for a 3-year term;

 

2.

To ratify the appointment of Ernst & Young LLP as TransUnion’s independent registered public accounting firm for the fiscal year ending December 31, 2019;

 

3.

To hold a non-binding advisory vote to approve the compensation of TransUnion’s named executive officers; and

 

4.

To transact any other business that may properly come before the Annual Meeting or any adjournments or postponements of the Annual Meeting.

The close of business on March 12, 2019 is fixed as the record date for the determination of stockholders entitled to receive notice of, and to vote at, the Annual Meeting or any adjournments or postponements thereof. A complete list of such stockholders will be available for examination, by any stockholder, at our offices in Chicago, Illinois during normal business hours for a period of ten days before the Annual Meeting.

We are pleased to take advantage of the U.S. Securities and Exchange Commission’s “Notice and Access” rule that allows us to provide stockholders with notice of their ability to access proxy materials via the Internet. Under this process, on or around March 27, 2019, we will begin mailing a Notice of Internet Availability of Proxy Materials (Notice) to certain of our stockholders informing them that our proxy statement, 2018 Annual Report (which includes our 2018 Form 10-K) and voting instructions are available on the Internet as of the same date. As more fully described in the Notice, all stockholders may choose to access our proxy materials via the Internet or may request printed materials.

By order of the Board of Directors,

Mick Forde

Senior Vice President and Corporate Secretary

March 27, 2019

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

The Notice of the 2019 Annual Meeting, the proxy statement and our 2018 Annual Report

(which includes our 2018 Form 10-K) are available at: www.proxyvote.com

2019 Proxy Statement Contents

 

CEO LETTER TO STOCKHOLDERS
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
PROXY VOTING SUMMARY			2
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING			3
CORPORATE GOVERNANCE AND RELATED MATTERS			8
General			8
Company Structure; Board Composition			8
Board Leadership Structure and Role of Board in Risk Oversight			8
Director Independence			9
Mandatory Retirement			9
No Term Limits			9
Communications with Directors			9
Meetings and Meeting Attendance			10
Background and Experience of Directors			10
Board Committees			16
Code of Business Conduct			18
Related Person Transactions			18
Compensation Committee Interlocks and Insider Participation			20
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			21
Section 16(a) Beneficial Ownership Reporting Compliance			22
PROPOSAL 1:        ELECTION OF DIRECTORS			23
Director Compensation			23
PROPOSAL 2:        RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			25
Audit and Related Fees			25
Audit and Compliance Committee Report			25
PROPOSAL 3:        NON-BINDING ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION			27
COMPENSATION DISCUSSION AND ANALYSIS			28
Executive Summary			28
Executive Compensation Philosophy and Governance Practices			32
Role of Compensation Committee, Management and Compensation Consultant in Compensation Decisions			34
Overview of 2018 Target Compensation Mix			34
Key Executive Compensation Components			36
Market Analysis and Benchmarking			36
2018 Executive Compensation Program			37
Compensation Committee Report			46

 

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EXECUTIVE COMPENSATION			47
Summary Compensation Table — 2018			47
Grants of Plan-Based Awards — 2018			49
Outstanding Equity Awards at Fiscal Year-End — 2018			50
Options Exercised and Stock Vested — 2018			51
Nonqualified Deferred Compensation — 2018			51
Payments upon Termination and Change in Control — 2018			54
Pay Ratio Disclosure			58
Equity Compensation Plan Information			58
OTHER INFORMATION			59
Other Business			59
Proxy Solicitation			59
Stockholder Proposals for 2020 Annual Meeting and Director Nominations			59
Additional Information Available			59

 

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TransUnion

555 West Adams Street

Chicago, Illinois 60661

(312) 985-2000

www.transunion.com

PROXY STATEMENT

For the 2019 Annual Meeting of Stockholders

We are furnishing you this proxy statement in connection with the solicitation of proxies by our Board of Directors (or Board) to be voted at the 2019 Annual Meeting of Stockholders (Annual Meeting) of TransUnion, a Delaware corporation, sometimes referred to as the Company, we, us or our. The Annual Meeting will be held on Wednesday, May 8, 2019 at 12:00 p.m. Central Daylight Time at the offices of Latham & Watkins LLP, 330 North Wabash Avenue, Suite 2800, Chicago, Illinois 60611.

In accordance with rules and regulations adopted by the U.S. Securities and Exchange Commission (SEC), we are providing our stockholders access to our proxy materials and other Annual Meeting materials on the Internet. Accordingly, a Notice of Internet Availability of Proxy Materials (Notice) will be mailed to our stockholders on or about March 27, 2019, unless a stockholder has previously requested printed materials. Stockholders will have the ability to access the proxy materials and our 2018 Annual Report (which includes our 2018 Form 10-K) on a website referred to in the Notice or request a printed set of the proxy materials to be sent to them by following the instructions in the Notice. The Notice contains instructions on how you can vote on the Internet or by telephone. You will need the 16-digit control number provided on the Notice or your proxy card (if applicable) to vote.

The Notice also provides instructions on how to inform us to send future proxy materials to you electronically by e-mail or in printed form by mail. If you choose to receive future proxy materials by e-mail, you will receive an e-mail next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by e-mail or mail will remain in effect until you terminate it.

 

 

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PROXY VOTING SUMMARY

This voting summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement and our 2018 Annual Report (which includes our 2018 Form 10-K) carefully before voting.

Annual Meeting of Stockholders

 

Time and Date:		Wednesday, May 8, 2019 at 12:00 p.m. Central Daylight Time
Place:		Latham & Watkins LLP 330 North Wabash Avenue, Suite 2800 Chicago, Illinois 60611
Record Date:		March 12, 2019
Voting:		Stockholders as of the record date are entitled to vote.
		Vote by Internet at http://www.proxyvote.com
		Vote by telephone at 1-800-690-6903
		Vote by completing and returning your proxy card or voter instruction card
		Vote in person during the Annual Meeting
		We urge you to vote before the meeting.

 

Voting Matters Agenda Item		Board Vote Recommendation		Page Reference
1.     Election of Directors The Board recommends the election of each of the director nominees as a Class I director for a 3-year term.		FOR each Director Nominee		23
2.     Ratification of Appointment of Ernst & Young LLP as the Company’s Independent Registered Public Accounting Firm The Board is asking stockholders to ratify the selection of Ernst & Young LLP as the Company’s Independent Registered Public Accounting Firm for fiscal year 2019.		FOR		25
3.     Advisory Vote to Approve the Compensation of the Company’s Named Executive Officers The Board is asking stockholders to approve, on an advisory basis, the compensation of the Company’s named executive officers as disclosed in this proxy statement.		FOR		27

 

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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

 

 

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CORPORATE GOVERNANCE AND RELATED MATTERS

General

Our Board of Directors directs the management of our business and affairs, as well as managing our business on behalf of our stockholders. The Board and management recognize that the interests of TransUnion are advanced by responsibly addressing the concerns of multiple constituencies, including employees, consumers, customers and the communities in which we operate. Our Corporate Governance Guidelines support the Board in its oversight role and in fulfilling its obligation to stockholders.

Our Corporate Governance Guidelines address, among other things:

•

the composition and responsibilities of the Board;

•

director independence and qualification standards;

•

Board meeting requirements;

•

management succession planning;

•

compensation of non-management directors; and

•

communications with Board members.

The Nominating and Corporate Governance Committee regularly reviews our Corporate Governance Guidelines and recommends modifications of these guidelines to the Board when appropriate, including when New York Stock Exchange (NYSE) and SEC regulations require changes.

You can find our Corporate Governance Guidelines on our Investor Relations website, www.transunion.com/tru, on the “Leadership and Governance” page.

Company Structure; Board Composition

TransUnion was formed by affiliates of Goldman, Sachs & Co. LLC (“GS”) and Advent International Corporation (“Advent”) on February 15, 2012. On April 30, 2012, TransUnion Intermediate Holdings, Inc. was acquired by TransUnion and became our wholly-owned subsidiary, which we refer to as the “2012 Change in Control Transaction.” On June 30, 2015, we completed the initial public offering of 33,977,273 shares of our common stock (the “IPO”).

Our certificate of incorporation provides for a classified board of directors. We currently have three directors in Class I (Messrs. George Awad, Siddharth (Bobby) Mehta and Andrew Prozes), three directors in Class II (Messrs. Thomas Monahan and Leo Mullin and Ms. Suzanne Clark) and four directors in Class III (Messrs. Robert Beauchamp, Russell Fradin and James Peck and Ms. Pamela Joseph). Mr. Christopher Cartwright, President – U.S. Information Services, who will succeed Mr. Peck as our President and Chief Executive Officer on May 8, 2019, will stand for election at the Annual Meeting to serve as a Class I Director.

Board Leadership Structure and Role of Board in Risk Oversight

Our Board of Directors is led by Mr. Mullin, our Non-Executive Chairman; we do not currently have a Lead Director. The Chief Executive Officer position is separate from our Chairman position, and we believe that the separation of these roles is appropriate for us at this time.

The Board believes that this leadership structure is appropriate because it strikes an effective balance between management and independent director participation in the Board process. The Non-Executive Chairman role allows our President and Chief Executive Officer to focus on his management responsibilities in leading the business, setting our strategic direction and optimizing our performance and operations. At the same time, the Non-Executive Chairman can focus on Board leadership, provide guidance to the Chief Executive Officer, and focus on corporate governance and our overall business strategy. The Board believes that the separation of

 

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functions between the Chief Executive Officer and the Non-Executive Chairman of the Board provides independent leadership of the Board in the exercise of its oversight responsibilities, increases the accountability of the Chief Executive Officer and creates transparency into the relationship among executive management, the Board and our stockholders.

The Board of Directors has extensive involvement in the oversight of risk management related to us and our business and accomplishes this oversight through the regular reporting by the Audit and Compliance Committee. The Audit and Compliance Committee represents the Board by periodically reviewing our accounting, reporting and financial practices, including the integrity of our financial statements, the oversight of administrative, information security, and financial and disclosure controls, and our compliance with legal and regulatory requirements. Through its regular meetings with management, including the finance, legal, compliance, information security and internal audit functions, the Audit and Compliance Committee reviews and discusses all significant areas of our business and summarizes for the Board of Directors all areas of risk and the appropriate mitigating factors. In addition, our Board receives periodic detailed operating performance reviews from management. Our Board and our Audit and Compliance Committee regularly meet with our Chief Information Security Officer to assess cybersecurity risks and to evaluate the status of our cybersecurity strategy and program, which includes an overview of how people, process and technology are deployed at TransUnion to protect consumers, customers, data and systems that are part of our business.

Director Independence

Our Board of Directors has affirmatively determined that Mses. Clark and Joseph and Messrs. Awad, Beauchamp, Fradin, Mehta, Monahan, Mullin and Prozes qualify as independent directors under the NYSE corporate governance standards. Messrs. Christopher Egan and Sumit Rajpal, who served as directors in 2018, were not deemed to be independent under the NYSE rules. In making these determinations, our Board considered various transactions and relationships between each director or director nominee, his or her immediate family, and our Company and its subsidiaries. The purpose of this review by our Board is to determine whether any such relationships or transactions were material and, therefore, inconsistent with a determination that the director or director nominee is independent. As a result of its review of our nominees for director, the Board determined that Messrs. Awad, Mehta and Prozes are independent under NYSE rules. There are no family relationships between any of the nominees for director or between any nominee and any executive officer of our Company.

Mandatory Retirement

Any director who reaches age 75 while in office must resign when he or she reaches the age of 75. A director elected to the Board before his or her 75th birthday may continue to serve until the later of (1) the expiration of the director’s then-current term and (2) the annual stockholders’ meeting coincident with or next following his or her 75th birthday. On the recommendation of the Nominating and Corporate Governance Committee, the Board may waive this requirement as to any director if it deems such waiver to be in the best interests of the Company.

No Term Limits

The Board believes we benefit from the service of directors who have developed, through valuable experience over time, an increasing insight into the Company and its operations. The Nominating and Corporate Governance Committee will review periodically the appropriateness of each director’s continued service.

Communications with Directors

We have established a process for communications with directors. All interested parties (including our stockholders) who would like to communicate with, or otherwise make his or her concerns known directly to the chairperson of any of the Audit and Compliance, Nominating and Corporate Governance or Compensation Committees, or to the non-management or independent directors as a group, may do so by addressing such

 

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communications or concerns to the Corporate Secretary (Mick Forde, mick.forde@transunion.com), 555 West Adams Street, Chicago, Illinois 60661, who will forward such communications to the appropriate party. Such communications may be made confidentially or anonymously.

Meetings and Meeting Attendance

During 2018, each of our directors attended at least 75% of the Board and Board committee meetings on which he or she served (held during the period that such director served). During 2018, our Board of Directors met nine times. Directors are expected to attend our annual stockholders’ meeting. For our 2018 Annual Meeting of Stockholders, all members of our Board who were then-serving attended the meeting.

Background and Experience of Directors

When considering whether directors and nominees have the experience, qualifications, attributes and skills to enable our Board of Directors to satisfy its oversight responsibilities effectively in light of our business and structure, the Board focused primarily on each person’s background and experience as reflected in the information discussed in each of the directors’ individual biographies below. We believe that our directors provide an appropriate mix of experience and skills relevant to the size and nature of our business.

While the Board has not established mandatory minimum qualifications that a potential director nominee must possess, our Nominating and Corporate Governance Committee identifies candidates for the Board of Directors by taking into account all factors it considers appropriate, which may include ensuring that the Board, as a whole, is appropriately diverse and consists of individuals with various and relevant career experience. Our guidelines regarding director candidates do not prescribe specific standards for diversity, but the Nominating and Corporate Governance Committee considers diversity broadly to include differences of professional experience, viewpoint, individual characteristics, qualities and skills, resulting in naturally varying perspectives among the directors. Important individual qualifications for our directors include strength of character, mature judgment, familiarity with our business and industry, independence of thought and an ability to work collegially.

In identifying qualified candidates for our Board, our Nominating and Corporate Governance Committee reviews candidates’ existing commitments to other businesses and potential conflicts of interest with other pursuits. The Nominating and Corporate Governance Committee evaluates legal considerations, such as antitrust issues, corporate governance background, financial and accounting background, executive compensation background and the size, composition and combined expertise of the existing Board. Our Nominating and Corporate Governance Committee will consider director candidates from many sources, including stockholders. Stockholder recommendations must follow certain procedures under SEC rules and regulations and our bylaws. Any such recommendations must be in writing and delivered to the Nominating and Corporate Governance Committee at the following address: Corporate Secretary, 555 West Adams Street, Chicago, Illinois 60661. The Nominating and Corporate Governance Committee will evaluate all candidates for the Board in the same manner, including those candidates proposed by stockholders.

The Nominating and Corporate Governance Committee considers candidates with demonstrated skills or expertise in the following areas:

 

Ø

Business or regulatory acumen

Ø

Industry knowledge and experience

Ø

Technical skills

Ø

Relevant career experience

Ø

Financial expertise

Ø

Local or community ties

The specific experience and qualifications of each of our director nominees and continuing directors is described in the following section. The age indicated for each of our director nominees and continuing directors is as of

 

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March 15, 2019. The immediately following four director nominees will be seeking election at our Annual Meeting. Three of these directors are standing for reelection; one nominee, Christopher A. Cartwright, is seeking election for the first time. See “Item 1. Election of Directors” below for more information.

 

George M. Awad, 58		Director since November 2013
		Founder and Principal, Gibraltar Capital Corporation

Qualification Highlights

•

Executive level experience in leading consumer financial services companies

•

Finance and accounting experience

George M. Awad is the founder and principal of Gibraltar Capital Corporation, which he founded in 2011. Gibraltar Capital Corporation is a wealth management and advisory firm providing investment and business advice to wealthy, internationally-based families. He is a highly accomplished executive with exceptional operating experience in running large, global businesses across the full suite of consumer financial services products, including senior leadership roles with GE Capital from 1998 to 2006 and Citigroup, Inc. from 2006 to 2011, with focus on domestic and global markets. Most recently, Mr. Awad served as CEO, Consumer Finance for Citigroup, with prior positions as CEO, North America Cards and CEO, Global Consumer Group EMEA. Mr. Awad acted as the interim CEO and President of Walter Investment Management Corp. (now known as Ditech Holding Corporation) from June to September 2016. He has served on its board of directors since June 2016 and as the Chairman of the Board from June 2016 through February 2018. Mr. Awad leads Ditech Holding Corporation’s Compliance Committee and serves on its Nominating and Corporate Governance and Finance committees.

Mr. Awad holds a B.S. from the American University of Beirut and an M.B.A. from the University of Pittsburgh - Katz Graduate School of Business.

 

Christopher A. Cartwright, 53		Director Nominee
		President – U.S. Information Services, TransUnion

Qualification Highlights

•

Significant familiarity with our business and industry

•

Significant management experience

Christopher A. Cartwright joined the Company in August 2013 as Executive Vice President-U.S. Information Services. On November 14, 2018, the Company announced that Mr. Cartwright will succeed Mr. Peck as the Company’s President and CEO, effective on May 8, 2019. From December 2010 through March 2013, he was the Chief Executive Officer of Decision Insight Information Group, a portfolio of independent businesses providing real property information, software and services to insurance, finance, legal and real estate professionals in the United States, Canada and Europe. From June 1997 through October 2010, he held a variety of positions at Wolters Kluwer, a global information services and workflow solutions company, where he was CEO of Corporate Legal and Financial Services Division of North America and CEO of Shared Technology Services. Prior to Wolters Kluwer, he was Senior Vice President, Strategic Planning & Operations for Christie’s Inc. and Strategy Consultant for Coopers and Lybrand.

Mr. Cartwright holds a B.B.A. and an M.B.A. from the University of Texas at Austin.

 

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Siddharth N. (Bobby) Mehta, 60		Director since April 2012
		Former President and CEO, TransUnion

Qualification Highlights

•

Significant familiarity with our business and industry

•

Executive experience

•

Finance and accounting experience

Siddharth N. (Bobby) Mehta is the former President and Chief Executive Officer of TransUnion. He joined the Company in August 2007 and served as the President and Chief Executive Officer until December 31, 2012. From May 2007 through July 2007, he was a consultant to our Board of Directors. From 1998 through February 2007, he held a variety of positions with HSBC Finance Corporation and HSBC North America Holdings, Inc., including Chairman and Chief Executive Officer of HSBC Finance Corporation. He has served on the board of directors of Northern Trust Corporation since January 2019. Mr. Mehta has served on the board of directors of The Allstate Corporation since 2014 and the board of Piramal Enterprises Limited since 2013. Mr. Mehta also serves on the boards of DataCard Group, The Chicago Public Education Fund, The Field Museum, the Myelin Repair Foundation, The Lab School and Avant, LLC.

Mr. Mehta holds a B.S. from London School of Economics and an M.B.A. from the University of Chicago.

 

Andrew Prozes, 73		Director since January 2014
		Former CEO, LexisNexis

Qualification Highlights

•

Executive level experience in leading consumer financial services companies

•

Extensive business and industry experience

•

Extensive background in public company governance

Andrew Prozes served as a director of Cott Corporation from 2005 until May 2018 and chaired its Human Resources and Compensation Committee. He currently serves on the board of directors of Scribestar Limited, Fiizy, Payfone, Neoway, Ethoca Limited and Synaptive Limited, and a number of other private for-profit and not-for-profit boards. Mr. Prozes served as the Chief Executive Officer of LexisNexis and on the board of directors of Reed Elsevier PLC from 2000 until December 2010. Prior to joining Reed Elsevier, Mr. Prozes served as Executive Vice President and Chief Operating Officer of West Group, part of the Thomson Reuters Corporation, from 1997 to 2000. From 1988 to 1996, he served as President of Southam’s City Newspapers and was responsible for thirteen daily newspapers and Southam’s business information. Mr. Prozes is a past Chairman of The U.S. Information Industry Association and has served on the boards of the Information Technology Association of Canada and the Canadian Newspaper Association. He is a board trustee of Freedom House in Washington, D.C.

Mr. Prozes holds a B.A. from the University of Waterloo and an M.B.A. from York University.

The following directors are continuing directors who will not stand for election at the 2019 Annual Meeting:

 

Robert E. Beauchamp, 59		Director since June 2018
		Former President and CEO, BMC Software

Qualification Highlights

•

Significant executive experience

•

Technology expertise

•

Finance expertise

Robert E. Beauchamp served as the Chairman of BMC Software, Inc. – a leading provider of enterprise IT management solutions – from 2008 to October 2018, and as its President and Chief Executive Officer from 2001

 

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to 2016. Throughout his 30 years with BMC Software, Mr. Beauchamp held a variety of leadership roles. In addition to information technology and cybersecurity, he brings significant experience to TransUnion in the areas of strategic planning, risk management, global operations, sales, finance, and mergers and acquisitions. He is currently a board member of ThoughtTrace, Anaplan, Inc., Raytheon, Inc. and Forcepoint LLC (a cybersecurity joint venture company owned by Raytheon Company with Vista Equity Partners).

Mr. Beauchamp earned a B.B.A. from the University of Texas at Austin and an M.S. from Houston Baptist University.

 

Suzanne P. Clark, 51		Director since June 2017
		Senior Executive Vice President, U.S. Chamber of Commerce

Qualification Highlights

•

Significant executive experience

•

Finance experience

Suzanne P. Clark has served as Senior Executive Vice President of the U.S. Chamber of Commerce since January 2017, where she focuses on strategy, government relations and market innovation in support of the Chamber’s more than 3 million member companies internationally. Ms. Clark served as Executive Vice President of the U.S. Chamber of Commerce from September 2014 until January 2017. She was previously the Chief Executive Officer of Potomac Research Group from 2010 through September 2014. Prior to that, she held senior leadership roles with Atlantic Media Company (President of National Journal Group) and American Trucking Associations (Chief of Staff). She has served on the board of AGCO Corporation (NASDAQ:AGCO) since April 2017 and Ms. Clark serves on the boards of So Others Might Eat and St. Patrick’s Episcopal Day School. She is the former President of International Women’s Forum (Washington chapter) and has been honored by Washingtonian Magazine as one of the “100 Most Powerful Women in Washington.”

Ms. Clark holds a B.A. and an M.B.A. from Georgetown University.

 

Russell P. Fradin, 63		Director since July 2018
		Operating Partner, Clayton, Dubilier & Rice, Inc.

Qualification Highlights

•

Significant executive experience

•

Extensive background in public company governance

Russell P. Fradin became an operating partner with private investment firm Clayton, Dubilier & Rice, Inc. (CD&R) in 2016, and in that capacity serves as Chairman of two portfolio companies: Capco, a business, digital and technology consulting services company for the financial services industry; and TRANZACT, which provides end-to-end customer acquisition solutions to the insurance sector. Prior to joining CD&R, Mr. Fradin served as President and CEO at SunGard Data Systems, from 2011 until the company’s acquisition by FIS in 2015. He previously served as the Chairman and CEO of Aon Hewitt, a global leader in human resource solutions. During his tenure, Mr. Fradin oversaw the successful 2010 merger between Aon Consulting and Hewitt Associates, having been CEO of Hewitt since 2006. Additional former roles include CEO of the BISYS Group, and senior executive positions at Automatic Data Processing and McKinsey & Company. He has served on the board of Best Buy Co., Inc. since April 2013 and is currently lead independent director. Mr. Fradin also serves on the board of Hamilton Insurance Group, Ltd.

Mr. Fradin holds a B.S. in economics from the Wharton School at the University of Pennsylvania and an M.B.A. from Harvard Business School.

 

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Pamela A. Joseph, 60		Director since September 2015
		Former Vice Chairman of U.S. Bancorp Payment Services and Chairman of Elavon, Inc.

Qualification Highlights

•

Significant executive experience

•

Finance and accounting experience

•

Technology expertise

Pamela A. Joseph served as the President and Chief Operating Officer of TSYS from May 2016 until September 2017. Ms. Joseph was previously the Vice Chairman of U.S. Bancorp Payment Services and Chairman of Elavon (formerly NOVA Information Systems, Inc.), a wholly-owned subsidiary of U.S. Bancorp, a position she held from 2004 until June 2015. Ms. Joseph serves on the Board of Directors of Paychex, Inc. Ms. Joseph served on the Board of Directors of TSYS from May 2016 to September 2017. Ms. Joseph served as a director of Centene Corporation from September 2007 to April 2016.

Ms. Joseph holds a B.S. from the University of Illinois at Urbana-Champaign.

 

Thomas L. Monahan, III, 52		Director since June 2017
		Former CEO, CEB, Inc.

Qualification Highlights

•

Executive experience

•

Technology expertise

•

Extensive background in public company governance

Thomas L. Monahan, III served as Chairman and Chief Executive Officer of CEB, Inc. (formerly NYSE: CEB) from 2008 until April 2017, and served as CEO beginning in 2005. CEB is a research and analytics firm which provides data and insights to help people work more effectively. In his 21 years at CEB, Mr. Monahan led significant global growth and digitization of product delivery. Mr. Monahan has served as a Managing Partner at Norton Street Capital since April 2017. Previously, he worked at Deloitte and Andersen Consulting. He is a former member of the CEB board and served as a member of the board of Convergys Corporation (NYSE:CVG) from 2008 through 2018. Mr. Monahan is also currently a member of the boards of Workforce Logiq, Winsight, the Peace Tech Lab and the Maret School.

Mr. Monahan holds a B.A. from Harvard University and an M.B.A. from New York University.

 

Leo F. Mullin, 76		Chairman of the Board since February 2015; Director since June 2012
		Former CEO, Delta Airlines

Qualification Highlights

•

Extensive experience in large, multinational corporations

•

Finance and accounting experience

•

Extensive background in public company governance

Leo F. Mullin served as a Senior Advisor, on a part-time basis, to Goldman Sachs Capital Partners (“GSCP”), including board service on companies in which GSCP has invested, from 2004 through September 2015. Mr. Mullin retired from Delta Airlines in April 2004, after having served as Chief Executive Officer of Delta since August 1997 and Chairman since January 2004. Mr. Mullin was Vice Chairman of Unicom Corporation and its principal subsidiary, Commonwealth Edison Company, from 1995 to 1997. He was an executive of First Chicago Corporation, the nation’s tenth largest bank, from 1981 to 1995, serving as that company’s President and

 

14

Chief Operating Officer from 1993 to 1995, and as Chairman and Chief Executive Officer of American National Bank, a subsidiary of First Chicago Corporation, from 1991 to 1993. He has also served as a senior vice president at Conrail for five years, and as a consultant with McKinsey and Company for nine years, the last three years as a partner. Mr. Mullin previously served as director of Johnson & Johnson from 1999 to April 2015 and Educational Management Corporation from 2006 to 2015, and served as a director of Chubb Limited from 2007 until May 2018.

Mr. Mullin holds an A.B. from Harvard College, an M.S. from Harvard Graduate School of Arts & Sciences and an M.B.A. from Harvard Business School.

 

James M. Peck, 55		Director since December 2012
		President and Chief Executive Officer, TransUnion

Qualification Highlights

•

Extensive business and industry experience

•

Significant management experience

•

Technology expertise

James M. Peck joined the Company in December 2012 as President and Chief Executive Officer. On November 14, 2018, the Company announced that Mr. Peck will retire as President and CEO, effective on May 8, 2019. Mr. Peck will be succeeded by Christopher A. Cartwright, effective on May 8, 2019. Mr. Peck has more than 20 years of information management, global product development and engineering experience. He has led TransUnion through a transformation into a higher-growth, higher-margin business by setting and executing a strong strategy focused on enhancing the Company’s data, technology and analytics capabilities and achieving growth in key industry verticals and international markets. Prior to TransUnion, Mr. Peck was with Reed Elsevier, a FTSE 100 company, where he served as CEO of the LexisNexis Risk Solutions business from 2004-2012. Prior to 2004, Mr. Peck was the Senior Vice President and Chief Product Officer for the LexisNexis group. Additionally, Mr. Peck was the Senior Vice President of Product Development with Celera Genomics, a bio-technology firm that sequenced the human genome. Prior to that, he spent a decade at LexisNexis in engineering and executive roles to manage and build information solutions. Mr. Peck has served on the board of Sun Life Financial since January 2019 and serves on its Management Resources Committee and Risk and Conduct Review Committee. He also serves on the boards of CCC Information Services and the Museum of Science and Industry, Chicago.

Mr. Peck holds a bachelor’s degree from the University of Dayton and an M.B.A. from The Ohio State University.

 

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Board Committees

The standing committees of our Board of Directors consist of an Audit and Compliance Committee, a Compensation Committee, a Nominating and Corporate Governance Committee, and an Executive Committee. The Board has adopted written charters for each of its committees, which can be found on our Investor Relations website, www.transunion.com/tru, on the “Leadership and Governance” page. Listed below are the members of each of the four standing committees as of March 12, 2019.

 

AUDIT AND COMPLIANCE COMMITTEE(1)    2018 Meetings: 5    Pamela A. Joseph, Chair (I)  George M. Awad (I)  Robert E. Beauchamp (I)  Suzanne P. Clark (I)		•   Assist our Board in overseeing and monitoring: ¡   the quality and integrity of our financial statements and our financial reporting and disclosure practices; ¡   our compliance with applicable legal and regulatory requirements; ¡  our independent registered public accounting firm’s qualifications and independence; and ¡   the performance of our internal audit function.   •   Retain our independent registered public accounting firm.   •   Pre-approve audit and non-audit services to be provided by our independent registered public accounting firm.   •   Consult with our independent and internal auditors regarding audits of our consolidated financial statements and the adequacy of our internal controls.   •   Prepare the audit committee report for our proxy statement.   •   Our Board has determined that each member of the Audit and Compliance Committee qualifies as an independent director under the NYSE corporate governance standards and the independence requirements of Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).   •   Our Board has determined that each of Ms. Joseph and Mr. Awad qualifies as an “audit committee financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K.

 

I = Independent

 

(1)	Effective on July 23, 2018, Mr. Beauchamp was appointed to serve on the Audit and Compliance Committee.

 

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COMPENSATION COMMITTEE    2018 Meetings: 8    Andrew Prozes, Chair (I)  Thomas L. Monahan, III (I)  Leo F. Mullin (I)		•   Assist our Board of Directors in discharging its responsibilities relating to: ¡  setting our compensation program and compensation of our executive officers and directors; ¡   monitoring our incentive and equity-based compensation plans; and ¡  preparing the compensation committee report in our proxy statement.   •   Make annual compensation decisions for our executive officers, including adjustments to base salary, bonus, equity and equity-based incentives, and other benefits.   •   Make recommendations to the Board regarding compensation for non-management directors for their Board and committee service.   •   Review and discuss with management, at least annually, management’s assessment of whether risks arising from our compensation policies and practices for all employees, including non-executive officers, are reasonably likely to have a material adverse effect on the Company.   •   The Compensation Committee may delegate some or all of its authority to subcommittees when it deems appropriate.   •   Consult directly with our independent compensation consultant, Frederic W. Cook & Co., Inc., as needed, and with management to review and evaluate our compensation practices, which include both our executive and director compensation programs.

 

I = Independent

 

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NOMINATING AND CORPORATE  GOVERNANCE COMMITTEE(1)    2018 Meetings: 3    Leo F. Mullin, Chair (I)  Russell P. Fradin (I)  Andrew Prozes (I)		•   Assist our Board of Directors in discharging its responsibilities relating to:   ¡  identifying qualified individuals to become new Board members;   ¡  reviewing the qualifications of incumbent directors to determine whether to recommend them for reelection, or recommending that the Board select the director nominees for our annual meeting of stockholders;   ¡   identifying qualified Board members to fill vacancies on any Board committee and recommending that the Board appoint the identified member to the applicable committee;   ¡  reviewing and recommending to the Board applicable corporate governance guidelines; and   ¡  overseeing the annual self-evaluation of the Board and each Board committee, as well as overseeing individual director and management evaluations.

 

EXECUTIVE COMMITTEE    2018 Meetings: 2    Leo F. Mullin, Chair (I)  Pamela A. Joseph (I)  James M. Peck  Andrew Prozes (I)		•   Exercise the powers and authority of the Board during the intervals between meetings of the full Board of Directors.

 

I = Independent

 

(1)	Effective on November 7, 2018, Mr. Fradin was appointed to serve as a member of the Nominating and Corporate Governance Committee.

Code of Business Conduct

We have adopted a Code of Business Conduct that applies to all directors, officers and employees. You can find our Code of Business Conduct on our Investor Relations website, www.transunion.com/tru, on the “Leadership and Governance” page, and a copy of the Code of Business Conduct may also be obtained free of charge upon a request directed to TransUnion, 555 West Adams Street, Chicago, Illinois 60661, Attn: Corporate Secretary.

Related Person Transactions

Our Board of Directors has adopted a written Related Person Transaction Policy, which provides that any “Related Person Transaction” must be reviewed and approved or ratified in accordance with specified procedures. The term “Related Person Transaction” includes any transaction, arrangement or relationship, or series of similar transactions, arrangements or relationships, in which (1) the aggregate dollar amount involved exceeds $120,000 in any fiscal year, (2) the Company is, or is proposed to be, a participant, and (3) any person who is or was (since the beginning of the last fiscal year) a director, a nominee for director, an executive officer or a beneficial owner of more than five percent of any class of our voting securities, or a member of the immediate family of any such person, had, has or will have a direct or indirect interest (other than solely as a result of being a director or being less than a 10 percent beneficial owner of another entity).

 

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Our policy requires each director, nominee and executive officer to notify the Chief Legal Officer in writing of any Related Person Transaction in which the director, nominee, executive officer or an immediate family member has or will have an interest and to provide specified details of the transaction. The Chief Legal Officer will deliver a copy of the notice to the Audit and Compliance Committee, who will then review the material facts of each proposed Related Person Transaction and approve, ratify or disapprove the transaction.

The vote of a majority of disinterested members of the Audit and Compliance Committee is required for the approval or ratification of any Related Person Transaction. The Audit and Compliance Committee may approve or ratify a Related Person Transaction if the Audit and Compliance Committee determines, in its business judgment, based on the review of all available information, that the transaction is fair and reasonable to the Company, that there is a business or corporate interest supporting the Related Person Transaction, and that the Related Person Transaction is in the best interests of the Company.

In making this determination, the Audit and Compliance Committee will consider, among other things:

 

•

the business or corporate purpose of the transaction;

 

•

whether the transaction is entered into on an arms-length basis and on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances;

 

•

whether the interest of the director, nominee, executive officer, beneficial owner or family member in the transaction is material;

 

•

whether the transaction would impair the independence of the director or executive officer;

 

•

whether the transaction would otherwise present an improper conflict of interest; and

 

•

whether the transaction would violate any law or regulation applicable to us or any provision of our Code of Business Conduct.

The policy also contains categories of pre-approved transactions that the Board has identified as not having a significant potential for an actual or potential conflict of interest or improper benefit.

In any case where the Audit and Compliance Committee determines not to approve or ratify a Related Person Transaction, the matter will be referred to the Chief Legal Officer for review and consultation regarding the appropriate disposition of such transaction, arrangement or relationship including, but not limited to, termination of the transaction or rescission or modification of the transaction in a manner that would permit it to be ratified and approved.

Registration Rights Agreement

We are parties to a registration rights agreement with certain affiliates of investment funds affiliated with The Goldman Sachs Group, Inc. (collectively, the “GS Investors”) and the Advent-TransUnion Acquisition Limited Partnership (the “Advent Investor”) and certain members of management. The registration rights agreement provided the GS Investors and the Advent Investor an unlimited number of “demand” registrations, which required us to register shares of our common stock under the Securities Act of 1933, as amended (the “Securities Act”), held by the GS Investors and the Advent Investor and, if requested, to maintain an effective shelf-registration statement with respect to such shares. From February 15, 2012 through August 4, 2017, the Advent Investor owned at least 5% of our outstanding common stock, selling its remaining shares on November 2, 2017, and the Advent Investor had at least one designee serving on our Board of Directors until May 8, 2018. From February 15, 2012 through March 8, 2018, the GS Investors owned at least 10% of our outstanding common stock and had at least one designee serving on our Board of Directors. As of March 8, 2018, since neither the GS Investors nor the Advent Investor hold any shares of our common stock, they no longer have the ability to initiate a “demand” registration.

 

19

Data and Data Services

In 2018, we entered into a series of transactions with affiliates of Goldman, Sachs & Co. LLC (“GS”) to license data and provide data services that we offer to all of our business customers. In connection with these transactions, we received aggregate fees of approximately $10.5 million in 2018. These transactions were approved by the Audit and Compliance Committee pursuant to our Related Person Transaction Policy.

Debt and Hedge Activities

As of December 31, 2018, interest accrued on our debt and hedge owed to related parties was less than $0.1 million. As of December 31, 2018, we owed approximately $1.6 million under our Term Loan B to affiliates of GS. Also as of December 31, 2018, there was no balance outstanding under our senior secured revolving line of credit and nothing was owed under our Term Loan A to GS affiliates. During 2018, we entered into an interest rate swap agreement in which one of the counter-parties was an affiliate of GS. As of December 31, 2018, the GS proportion of the fair value of the swap was a liability of $4.4 million. As of December 31, 2018, the GS proportion of the fair value of the cap was an asset of $1.7 million. For the year ended December 31, 2018, we paid affiliates of GS $2.4 million of interest expense and fees related to debt and hedge instruments.

Associated Organizations of Directors and Executive Officers

During 2018, we entered into a three-year contract with BMC Software Inc. (“BMC”) to provide us with ITSM SAAS (IT service management, software as a service) after a competitive bidding process. One of our directors, Mr. Beauchamp, was the Chairman of BMC’s board of directors until October 12, 2018, at which time he resigned, and he served as BMC’s President and CEO from 2001 to 2016. During the year ended December 31, 2018, we paid $2.8 million for services provided by BMC. Given that the services provided by BMC are easily obtainable and replaceable from a number of third parties and the services are for our internal use and not used to generate revenue, the services are not considered to be qualitatively significant or material to TransUnion.

Compensation Committee Interlocks and Insider Participation

Messrs. Prozes (Chair), Monahan, Mullin and Rajpal were members of the Compensation Committee during 2018. None of these individuals is or has been an officer or employee of the Company or is serving or has served as a member of the compensation committee of another entity that has an executive officer serving on our Compensation Committee. None of our executive officers serves on the board of directors or as a member of the compensation committee of another entity at which a member of our Compensation Committee or Board of Directors serves as an executive officer. We are parties to certain transactions with GS, as described above under “Related Person Transactions” and Mr. Rajpal served as a Managing Director of GS while he was a member of our Compensation Committee.

 

20

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND

MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of our common stock as of March 12, 2019, by:

 

•

each person that is the beneficial owner of more than 5% of our outstanding common stock;

 

•

each member of our board of directors;

 

•

each of our “named executive officers” (as defined in “Compensation Discussion and Analysis” in this proxy statement); and

 

•

all of the members of our board of directors and our executive officers as a group.

The information below is based on a total of 187,268,421 shares of our common stock outstanding as of March 12, 2019.

To our knowledge, unless otherwise disclosed in the footnotes to this table, and subject to applicable community property laws, we believe that the persons named in the table have sole voting and investment power with respect to their beneficially owned common stock.

Beneficial ownership for the purposes of the following table is determined in accordance with the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof, or has the right to acquire such powers within 60 days. Common stock subject to options that are currently exercisable or exercisable within 60 days of March 12, 2019, are deemed to be outstanding for calculating the percentage ownership of the person holding the options, but are not deemed outstanding for the purposes of calculating the percentage ownership of any other person. Unless otherwise indicated in the table or footnotes below, the address for each beneficial owner is c/o TransUnion, 555 West Adams Street, Chicago, Illinois 60661.

 

Name of Beneficial Owner		Shares of Common Stock     Beneficially Owned				Percent of     Common Stock     Outstanding
5% or greater stockholders:
T. Rowe Price Associates, Inc.(1)			30,296,747				16.18	%
The Vanguard Group(2)			15,916,543				8.50	%
Wellington Management Group LLP(3)			14,248,263				7.61	%
BlackRock, Inc.(4)			10,179,368				5.44	%
Lone Pine Capital LLC(5)			10,124,771				5.41	%
Directors and Named Executive Officers:
George M. Awad(6)			49,132				*
Robert E. Beauchamp			2,058				*
Suzanne P. Clark			5,731				*
Russell P. Fradin			2,005				*
Pamela A. Joseph			23,163				*
Siddharth N. (Bobby) Mehta(7)			78,234				*
Thomas L. Monahan, III			5,731				*
Leo F. Mullin(8)			89,593				*
Andrew Prozes(9)			54,269				*
James M. Peck(10)			782,496				*
Todd M. Cello(11)			11,144				*
Christopher A. Cartwright(12)			341,157				*
John T. Danaher(13)			4,318				*
David M. Neenan(14)			238,072				*
All Directors and Executive Officers as a Group:
(Consisting of 17 persons)(15)			1,721,267				*

 

 * Less than 1%.

 

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(1)

Based solely on information obtained from a Schedule 13G filed by T. Rowe Price Associates, Inc. (“Price Associates”) with the SEC on February 14, 2019, reporting beneficial ownership obtained as of December 31, 2018. Price Associates has sole voting power over 9,697,392 shares of our common stock and sole dispositive power over 30,296,747 shares of our common stock. Price Associates’ business address is 100 East Pratt Street, Baltimore, MD 21202.

(2)

Based solely on information obtained from a Schedule 13G filed by The Vanguard Group (“Vanguard”) with the SEC on February 12, 2019, reporting beneficial ownership as of December 31, 2018. Vanguard has sole voting power over 139,760 shares, shared voting power over 38,480 shares, sole dispositive power over 15,741,241 shares and shared dispositive power over 175,302 shares. Vanguard’s business address is 100 Vanguard Blvd., Malvern, PA 19355.

(3)

Based solely on information obtained from a Schedule 13G filed by Wellington Management Group LLP (“Wellington”) with the SEC on February 12, 2019, reporting beneficial ownership as of December 31, 2018. Wellington has indicated that it holds shares of our common stock together with certain of its subsidiaries. Wellington has shared voting power with respect to 9,424,965 of these shares and shared dispositive power with respect to 14,248,263 of these shares. Wellington’s business address is 280 Congress Street, Boston, MA 02210.

(4)

Based solely on information obtained from a Schedule 13G filed by BlackRock, Inc. (“BlackRock”) with the SEC on February 8, 2019, reporting beneficial ownership as of December 31, 2018. BlackRock has indicated that it has sole voting power over 8,841,307 shares and sole dispositive power over 10,179,368 shares. BlackRock’s business address is 55 East 52nd Street, New York, NY 10055.

(5)

Based solely on information obtained from a Schedule 13G filed by Lone Pine Capital LLC (“Lone Pine Capital”) and Stephen F. Mandel, Jr. (“Mr. Mandel”), the managing member of Lone Pine Managing Member LLC, which is the managing member of Lone Pine Capital, with the SEC on February 14, 2019, reporting beneficial ownership as of December 31, 2018. Lone Pine Capital and Mr. Mandel have shared voting and shared dispositive power over 10,124,771 shares. Lone Pine Capital’s and Mr. Mandel’s business address is Two Greenwich Plaza, Greenwich, CT 06830.

(6)	Represents 5,943 shares of common stock and options to purchase 43,189 shares of common stock, which are exercisable within 60 days.

(7)	Represents 35,576 shares of common stock and options to purchase 42,658 shares of common stock, which are exercisable within 60 days.

(8)	Represents 63,147 shares of common stock and options to purchase 26,446 shares of common stock, which are exercisable within 60 days.

(9)	Represents 11,083 shares of common stock and options to purchase 43,186 shares of common stock, which are exercisable within 60 days.

(10)	Represents 64,068 shares of common stock held by Mr. Peck, 274,568 shares of common stock held by Peckers Ventures, LLC, and options to purchase 443,860 shares of common stock, which are exercisable within 60 days.

(11)	Represents 10,644 shares of common stock and options to purchase 500 shares of common stock, which are exercisable within 60 days.

(12)	Represents 53,856 shares of common stock and options to purchase 287,301 shares of common stock, which are exercisable within 60 days.

(13)	Represents options to purchase 4,318 shares of common stock, which are exercisable within 60 days.

(14)	Represents 56,747 share of common stock held by Mr. Neenan and 61,775 shares held by Harrow Neenan LLC and options to purchase 119,550 shares of common stock, which are exercisable within 60 days.

(15)	Represents 691,248 shares of common stock held by our directors and executive officers and options to purchase 1,030,019 shares of common stock, which are exercisable within 60 days.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act and the rules of the SEC require our directors, executive officers and persons who own more than 10% of our common stock to file reports of their ownership and changes in ownership of our common stock with the SEC. As a practical matter, we assist our directors and officers by monitoring transactions and completing and filing Section 16 reports on their behalf. Based solely on our review of the reports filed during 2018 and related written representations, we determined that no director, executive officer, or beneficial owner of more than 10% of our common stock failed to file a report on a timely basis during 2018.

 

22

PROPOSAL 1: ELECTION OF DIRECTORS

Upon the recommendation of the Nominating and Corporate Governance Committee, our Board has nominated the four people named below for election as Class I directors at our Annual Meeting. Each of the nominees for director has agreed to be named in this proxy statement and to serve as a director if elected. Each nominee, if elected, will serve as a director until our 2022 Annual Meeting of Stockholders and until his successor has been elected and qualified, or until his earlier death, resignation or removal.

Nominees:

George M. Awad

Christopher A. Cartwright

Siddharth N. (Bobby) Mehta

Andrew Prozes

Directors will be elected by a plurality of the votes of the shares of our common stock present in person or represented by proxy at the 2019 Annual Meeting of Stockholders and entitled to vote on the election of directors, which means that the four nominees receiving the highest number of affirmative votes will be elected. Proxies cannot be voted for a greater number than the four nominees named in this proxy statement. Unless instructions to the contrary are given, all properly delivered proxies will be voted for the election of these four nominees as directors.

In the event that any nominee for any reason is unable to serve, or for good cause will not serve, the proxies will be voted for such substitute nominee as our Board may determine. We are not aware of any nominee who will be unable to serve, or for good cause will not serve, as a director.

The relevant experiences, qualifications, attributes or skills of each nominee that led our Board to recommend the above persons as a nominee for director are described in the section entitled “Background and Experience of Directors.”

The Board of Directors recommends a vote “FOR” each of the foregoing nominees to serve as a Class I director.

Director Compensation

The following tables discuss the compensation earned by our independent directors in 2018. The independent directors are Messrs. Awad, Beauchamp, Fradin, Mehta, Monahan, Mullin and Prozes and Mses. Clark and Joseph. Messrs. Rajpal and Egan, who served until March 8, 2018 and May 8, 2018, respectively, were not considered independent directors during 2018 because of their relationships with GS and Advent, which previously held significant interests in TransUnion, and accordingly, they did not receive any compensation for their service on the Board in 2018. Mr. Peck, our President and Chief Executive Officer, is not included in the table below because he does not receive any additional compensation for his service on the Board of Directors. Mr. Peck’s 2018 compensation is presented in the Summary Compensation Table found on page 47.

In 2018, independent directors were eligible for the annualized compensation amounts described below, which were paid on a quarterly basis for service on our Board of Directors and Committees:

 

Board of Directors Annual Retainer		$	85,000
Board Chair Fee		$	100,000
Audit and Compliance Committee Chair Fee		$	30,000
Compensation Committee Chair Fee		$	25,000
Nominating and Corporate Governance Committee Chair Fee		$	20,000
Committee Member Fees		$	10,000

In addition, in 2018, our independent directors received restricted stock grants with a target grant value of $150,000 under our 2015 Omnibus Incentive Plan, which vest on the one-year anniversary of the grant date. The

 

23

restricted stock grants provide the directors with the same rights as stockholders generally, including the right to receive dividends paid on our common stock.

The total compensation paid to our independent directors in 2018 is shown in the table below. The annual retainer and applicable fees are prorated for Mr. Beauchamp, who was appointed to our Board of Directors on June 20, 2018 and for Mr. Fradin, who was appointed to our Board of Directors on July 16, 2018.

Stock Ownership Requirements

We maintain a formal stock ownership policy requiring all independent directors to hold TransUnion common stock, which includes unvested restricted stock, in an amount equal to five times the annual Board retainer. To attain the desired multiple, each director must retain 75% of the after-tax value of his or her shares received pursuant to any equity grant after January 1, 2016, until such multiple is achieved. All applicable directors have met their stock ownership requirements, except for Mr. Awad and Messrs. Beauchamp, Fradin and Monahan and Ms. Clark, who were recently appointed to the Board of Directors in 2017 or 2018, as applicable.

Non-Employee Director Compensation Table – 2018

 

Name		Fees Earned or Paid in Cash ($)								Stock Awards(1) ($)								Total ($)
George M. Awad(2)			95,000								149,941								244,941
Robert E. Beauchamp			47,500								149,987								197,487
Suzanne P. Clark			95,000								149,941								244,941
Russell P. Fradin			42,500								149,974								192,474
Pamela A. Joseph			125,000								149,941								274,941
Siddharth N. (Bobby) Mehta(2)			85,000								149,941								234,941
Thomas L. Monahan			95,000								149,941								244,941
Leo F. Mullin(2)			212,500								149,941								362,441
Andrew Prozes(2)			127,500								149,941								277,441

 

(1)

The amounts shown in this column represent the full grant date fair value of the restricted stock grant in 2018 as computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. Assumptions used in the calculation of these amounts are included in Note 16, “Stock-Based Compensation,” of the consolidated financial statements contained in our 2018 Annual Report on Form 10-K. Messrs. Awad, Mehta, Monahan, Mullin and Prozes and Mses. Clark and Joseph each received a grant of 2,187 shares of restricted stock under our 2015 Omnibus Incentive Plan on May 8, 2018. Mr. Beauchamp received a grant of 2,058 shares of restricted stock under our 2015 Omnibus Incentive Plan on June 20, 2018 in connection with his appointment to the Board. Mr. Fradin received a grant of 2,005 shares of restricted stock under our 2015 Omnibus Incentive Plan on July 16, 2018 in connection with his appointment to the board. These are the only outstanding restricted stock grants for each director.

(2)

Mr. Awad has 43,189 vested and exercisable stock options with an exercise price of $8.57. Mr. Mehta has 42,658 vested and exercisable stock options with an exercise price of $4.99. Mr. Mullin has 24,793 vested and exercisable stock options and 8,265 unvested stock options with an exercise price of $13.06 with 1,653 stock options vesting on the last day of each calendar year quarter ending on March 31, 2020. Mr. Prozes has 41,026 vested and exercisable stock options and 2,160 unvested stock options with an exercise price of $8.57 that fully vest on March 31, 2019.

Business Expenses

The independent directors are reimbursed for their business expenses related to their attendance at our meetings, including room, meals and transportation to and from Board and committee meetings. On rare occasions, a director’s spouse may accompany a director when traveling on TransUnion business.

Director and Officer Liability (or D&O) Insurance

D&O insurance insures our individual directors and officers against certain losses that they are legally required to bear as a result of their actions while performing duties on our behalf. Our D&O insurance policy does not break out the premium for directors versus officers and, therefore, a dollar amount cannot be assigned to the coverage provided for individual directors.

 

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PROPOSAL 2: RATIFICATION OF APPOINTMENT OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit and Compliance Committee of our Board has appointed the independent registered public accounting firm of Ernst & Young LLP to audit our consolidated financial statements for the year ending December 31, 2019. Ernst & Young LLP has been engaged as our independent registered public accounting firm since our formation in 2012. We are not required under SEC regulations to submit this proposal. However, the Board believes it is appropriate and a good corporate governance practice to do so.

The ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2019 will be determined by the vote of a majority of the voting power of the shares present or represented at the 2019 Annual Meeting of Stockholders and voting affirmatively or negatively on the proposal. Unless instructions to the contrary are given, all properly delivered proxies will be voted “FOR” ratification.

If the appointment is not ratified by the stockholders, the Audit and Compliance Committee will consider the appointment of a different independent registered public accounting firm.

A representative of Ernst & Young is expected to be present at the Annual Meeting, will be offered the opportunity to make a statement if the representative desires to do so and will be available to respond to appropriate questions.

The Board of Directors recommends a vote “FOR” the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal year 2019.

Audit and Related Fees

The following table sets forth the aggregate fees paid to Ernst & Young, our principal accountant, for the years ended December 31, 2018 and 2017:

 

Category (in millions)		2018				2017
Audit fees		$	4.6			$	3.8
Audit-related fees			0.1				0.1
Tax fees			0.1				0.2
All other fees			—				—
Total		$	4.8			$	4.1

All audit and non-audit services provided by our principal accountant, or any other independent registered public accounting firm, must be approved by the Audit and Compliance Committee of our Board of Directors. For engagements expected to generate fees of $50,000 or less, audit and non-audit services by an independent registered public accounting firm can be approved by the Chairman of the Audit and Compliance Committee. Audit-related fees include fees paid for due diligence related to mergers and acquisitions, the review of controls and security of our information systems and agreed upon procedures. Tax fees include fees related to the analysis of various domestic and international tax restructuring matters. All of the fees paid to our principal accountant in 2018 and 2017 were pre-approved by our Audit and Compliance Committee.

Audit and Compliance Committee Report

The Audit and Compliance Committee of our Board of Directors currently consists of the four directors whose names appear below. Each member of the Audit and Compliance Committee is “independent” and meets the

 

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financial literacy requirements of NYSE’s listing standards. The primary purposes of the Audit and Compliance Committee are to assist the Board in monitoring:

 

•

the integrity of TransUnion’s financial statements and financial reporting processes and systems of internal control;

 

•

the qualifications and independence of TransUnion’s independent registered public accounting firm;

 

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the performance of TransUnion’s internal audit function and independent registered public accounting firm; and

 

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TransUnion’s compliance with legal and regulatory requirements.

The Audit and Compliance Committee is responsible for appointing, retaining and terminating our independent registered public accounting firm and also performs the specific functions set forth in its charter, which is available on our website.

The Audit and Compliance Committee has reviewed and discussed with TransUnion’s management and Ernst & Young LLP, TransUnion’s independent registered public accounting firm, the audited financial statements of TransUnion included in its Annual Report on Form 10-K for the year ended December 31, 2018.

The Audit and Compliance Committee has discussed with TransUnion’s independent registered public accounting firm the matters required to be discussed by SAS No. 61, “Communications with Audit Committees,” as amended (American Institute of Certified Public Accountants, Professional Standards Vol. 1, AU Section 380), as adopted by the Public Company Accounting Oversight Board (the “PCAOB”) in Rule 3200T. The Audit and Compliance Committee also has received and reviewed the written disclosures and the letter from Ernst & Young LLP required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit and Compliance Committee concerning independence, and has discussed with Ernst & Young LLP such independent registered public accounting firm’s independence.

Based on the review and discussions referred to above, the Audit and Compliance Committee recommended to our Board of Directors that the audited financial statements be included in TransUnion’s Annual Report on Form 10-K for the year ended December 31, 2018 for filing with the SEC.

This report is submitted on behalf of the Audit and Compliance Committee.

Pamela A. Joseph, Chair

George M. Awad

Robert E. Beauchamp

Suzanne P. Clark

The foregoing Audit and Compliance Committee Report is not soliciting material, is not deemed filed with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

 

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PROPOSAL 3: NON-BINDING ADVISORY VOTE TO APPROVE

NAMED EXECUTIVE OFFICER COMPENSATION

As discussed in the Compensation Discussion and Analysis, which begins on page 28 of this proxy statement, the Board believes that our long-term success depends largely on the talents of our employees. Our compensation program plays a significant role in our ability to attract, retain, and motivate the highest quality employees. The Board believes that our current compensation program directly links executive compensation to performance and the achievement of strategic goals, aligning the interests of our executive officers with those of our stockholders.

This proposal provides stockholders with the opportunity to cast an advisory vote to approve the compensation program. This non-binding advisory vote is commonly referred to as a “say-on-pay” vote. The “say-on-pay” vote is being provided pursuant to SEC regulations. While the vote does not bind the Board to any particular action, the Board values the input of the stockholders, and will take into account the outcome of this vote in considering future compensation arrangements. Since the Company has determined to hold future advisory votes on executive compensation every three years, we expect that the next such vote will occur at the 2022 Annual Meeting of Stockholders.

The Board encourages you to review carefully the Compensation Discussion and Analysis beginning on page 28 and the Executive Compensation section beginning on page 47, and to cast an advisory vote to approve our executive compensation programs through the following resolution:

“RESOLVED, that the compensation paid to TransUnion’s named executive officers, as disclosed in the 2019 proxy statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”

Unless instructions to the contrary are given, all properly delivered proxies will be voted for approval of the compensation of our named executive officers.

The Board of Directors recommends that you vote “FOR” the approval, on a non-binding advisory basis, of the compensation of our named executive officers as disclosed in this proxy statement.

 

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COMPENSATION DISCUSSION AND ANALYSIS

The information contained in this “Compensation Discussion and Analysis” (“CD&A”) describes the material elements of compensation paid or awarded to our principal executive officer, principal financial officer, and the other three most highly compensated executive officers (collectively, our “named executive officers” or “NEOs”) for the twelve months ended December 31, 2018.

For 2018, our named executive officers were:

 

•

Mr. James M. Peck—President and Chief Executive Officer (the “CEO”);

 

•

Mr. Todd M. Cello—Executive Vice President and Chief Financial Officer (the “CFO”);

 

•

Mr. Christopher A. Cartwright—Executive Vice President, U.S. Information Services (“USIS”);

 

•

Mr. David M. Neenan—Executive Vice President, International; and

 

•

Mr. John T. Danaher—Executive Vice President, Consumer Interactive.

In the Executive Summary section of this CD&A, we highlight our:

 

•

2018 Business Results;

 

•

2018 Annual Incentive Plan Performance;

 

•

2016 Performance Share Unit Performance (for the 2016-2018 performance period);

 

•

2018 Executive Compensation Program Actions, Results and Changes; and

 

•

CEO Transition.

In the remainder of this CD&A, we describe:

 

•

How our executive compensation philosophy and governance practices align with stockholders and reflect best practices, particularly by discouraging and mitigating against excessive risk taking (see page 32);

 

•

The role of the Compensation Committee, management and compensation consultant in compensation decisions (see page 34);

 

•

An overview of our NEOs’ 2018 target compensation mix (see page 34);

 

•

Key executive compensation components (see page 36);

 

•

Our market analysis and benchmarking (see page 36); and

 

•

Our 2018 executive compensation program (see page 37).

Executive Summary

2018 Business Results

Information is a powerful thing and at TransUnion we believe in using Information for Good. We find innovative ways to leverage data and information to help consumers and businesses make smarter decisions. The right information—analyzed by experienced people—can help all of us learn from the past, navigate the present and predict the future.

We operate with the belief that information can help advance industry, facilitate commerce and ultimately increase the standard of living for consumers around the world. Because when businesses and consumers have access to more complete and multidimensional information, they can make more informed decisions and achieve great things.

 

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For 2018, we delivered another year of excellent financial performance with double-digit revenue and Adjusted EBITDA growth as well as continued margin expansion, as compared to the full year of 2017, which is summarized as follows:

 

•   Consolidated revenue of $2,317 million, an increase of 20% (20% on a constant currency basis)   •   Consolidated Adjusted Revenue of $2,345 million, an increase of 21% (22% on a constant currency basis)   •   Consolidated Adjusted EBITDA of $917 million, an increase of 23% (23% on a constant currency basis)   •   Adjusted EBITDA margin expansion of approximately 40 basis points

This strong performance was broad-based and the result of executing on our growth strategy, which is driven by our core business, new solutions, and faster growing verticals and geographies. Additionally, we are enabling further investment in strategic growth initiatives that should continue to drive diversified top-line growth and strengthen our competitive position globally.

Adjusted Revenue and Adjusted EBITDA are non-GAAP financial measures that we use as supplemental measures of our operating performance. For a more detailed explanation of how we calculate these non-GAAP measures, please refer to our Annual Report on Form 10-K, filed with the SEC on February 14, 2019, under the heading “Results of Operations—Twelve Months Ended December 31, 2018, 2017 and 2016,” and Exhibit 99.1 of our Current Report on Form 8-K, filed with the SEC on February 14, 2019, under the heading “Non-GAAP Financial Measures.” Further, the year over year constant currency percentage changes above assume that foreign currency exchange rates are consistent between years. This allows financial results to be evaluated without the impact of fluctuations in foreign currency exchange rates.

 

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2018 Annual Incentive Plan Performance

The following highlights the corporate financial performance results for our 2018 annual incentive plan. Overall, our Defined Corporate Adjusted EBITDA was $908.2 million resulting in a payout of 171% of target and our Defined Corporate Revenue was $2,336.7 million resulting in a payout of 147% of target. For our CEO’s and CFO’s 2018 annual incentive, Defined Corporate Adjusted EBITDA has a 50% weighting and Defined Corporate Revenue has a 20% weighting. For our other NEOs, Defined Corporate Adjusted EBITDA has a 20% weighting. Our 2018 annual incentive, including the business unit level financial objectives, individual objectives, applicable weightings and achievement is discussed in greater detail beginning on page 38 in the section titled “2018 Executive Compensation Program—Annual Incentive Plan.”

 

 

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2016 Performance Share Unit Performance

The following highlights the performance results for our 2016 Performance Share Units (“PSUs”) granted in February 2016 with a performance period of January 1, 2016 to December 31, 2018. Overall, our cumulative Adjusted EBITDA was $2,235.0 million resulting in a payout of 200%, our cumulative Revenue was $5,687.4 million resulting in a payout of 200% and our Relative Total Shareholder Return (“TSR”) was in the 88^th percentile resulting in a payout of 200%. For our 2016 PSUs, cumulative Adjusted EBITDA has a 50% weighting, cumulative Revenue has a 25% weighting, and Relative TSR has a 25% weighting resulting in an overall weighted payout of 200% (maximum performance). Our PSU performance is discussed in greater detail beginning on page 42 in the section titled “2018 Executive Compensation Program—Long-Term Incentive Plan—2016 Performance Share Unit Performance.”

 

2018 Executive Compensation Program Actions, Results and Changes

We took the following actions with respect to our NEOs and executive compensation program in 2018:

 

•   Mr. Peck received a base salary increase to reflect strong company performance and execution and to better align with peers and Mr. Neenan received a base salary increase in recognition of continued business growth of the International segment with the largest acquisition in our history of Callcredit Information Group, Ltd. (“Callcredit”) (see page 38).   •   Mr. Peck received an increase in his target annual incentive to better align his pay with peers (see page 38).   •   Actual 2018 annual incentive payouts for the NEOs ranged from 118% to 192% of target based on corporate, business unit and individual performance (see page 40).   •   Mr. Cartwright and Mr. Neenan received a one-time restricted stock unit retention grant (see page 43).   •   The Company announced Mr. Peck’s retirement as President and CEO, and Mr. Cartwright’s appointment to President and CEO, effective May 8, 2019 (see page 32).

 

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CEO Transition

In November of 2018, we announced Mr. Peck will retire as President and CEO of TransUnion effective May 8, 2019 (the “Succession Date”). The Board appointed Mr. Cartwright to assume the role of President and CEO effective on the Succession Date. As discussed in this proxy statement, Mr. Cartwright will stand for election as a member of the Board at the Annual Meeting. To assist with an orderly transition, Mr. Peck will continue as a non-executive employee from and after the Succession Date through February 29, 2020. His duties will relate principally to ongoing communication and consultation with Mr. Cartwright. Mr. Peck will also continue to serve on the Board following the Succession Date, and he has agreed that he will resign from the Board, effective February 29, 2020.

Executive Compensation Philosophy and Governance Practices Align with Stockholders and Reflect Best Practices, Discouraging and Mitigating Excessive Risk Taking

 

What We Do		What We Don’t Do
Ø  Emphasize Company performance. 91% of our CEO’s target compensation and 75% of our other NEOs’ target compensation is “at-risk” based on Company and share price performance.   Ø  Align with stockholders. 79% of our CEO’s target compensation and 50% of our other NEOs’ target compensation is based on long-term incentives aligned with stockholders.   Ø  Incent both short- and long-term performance. Our long-term incentives have a three-year vesting or performance period complementing the one-year performance period for our annual incentive.   Ø  Require significant stock ownership for our executives. Our executives are subject to certain stock ownership requirements.   Ø  Compensation Committee advised by an independent compensation consultant. The independent consultant does not provide services to the Company other than advising the Compensation Committee.   Ø  Anti-hedging and pledging stock policies for our officers and directors.   Ø  Annual incentive plan and long-term incentive grants contain a clawback provision. We can recoup annual incentive payments and long-term incentive compensation, including upon a financial restatement.   Ø  Pay severance or vest PSUs and RSUs upon a “double trigger” in the event of a change in control. Our “double trigger” requires both a change in control and termination of employment either involuntarily without cause or voluntarily for good reason.		Ø  Provide NEOs with tax gross-ups in the event of a change in control. Taxes are our NEOs’ responsibility.   Ø  No re-pricing of underwater stock options. We do not re-price outstanding stock options, whether vested or unvested.   Ø  Pay dividend equivalents on unvested performance share units. Dividend equivalents on PSUs are paid only upon the vesting of such PSUs based on the number of shares earned as a result of actual Company performance.   Ø  Provide enhanced benefit plans for our NEOs. Our NEOs generally participate in the same retirement, health and welfare plans broadly available to all U.S. salaried employees. Additionally, there are no lifetime benefits for former or retired executives.   Ø  Offer excessive perquisites. We only offer a limited number of perquisites to NEOs to support personal financial planning and well-being.

 

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Executive Compensation Philosophy & Practices

Our executive compensation program is based on a philosophy that aligns the interests of our executives and stockholders. The following are key components of our compensation philosophy, which are used to guide the Compensation Committee in making compensation decisions. These components are evaluated to confirm the appropriateness of each objective in light of the overall corporate strategy and market practices.

 

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Attract, motivate and retain highly experienced executives who are vital to our short- and long-term success, profitability and growth;

 

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Align the focus of our executives with the interest of our stockholders by rewarding executives for the achievement of strategic goals that successfully drive our strategy, operations and business performance and, thereby, enhance stockholder value;

 

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Differentiate rewards based on actual individual performance while also rewarding executives for our overall results; and

 

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Discourage unnecessary and excessive risk-taking.

In support of this philosophy, the Compensation Committee:

 

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Reviews and approves corporate goals and objectives for our CEO;

 

•

Evaluates the performance of our CEO in light of such goals and objectives and approves the annual base salary, annual incentive, long-term incentives and other benefits provided to the CEO and other executive officers;

 

•

Reviews and recommends to the full Board of Directors new executive compensation programs, including long-term incentive compensation programs;

 

•

Periodically reviews the operation of our executive compensation programs as well as the administration of such programs to determine whether they are achieving their intended purpose(s);

 

•

Requires our executives to establish and maintain significant stock ownership in the Company;

 

•

Engages an independent compensation consultant to solely advise the Compensation Committee as to the competitiveness of our program and incentives being provided to our CEO and the other executives; and

 

•

Places a significant portion of each executive’s compensation at risk, contingent upon meeting measurable and meaningful performance goals.

Most Recent Say-on-Pay Voting Results

At our 2016 Annual Meeting of Stockholders, the stockholders approved, on a non-binding advisory basis, holding a non-binding advisory vote to approve the executive compensation of the NEOs every three years (the “Say-on-Pay vote”). Our most recent Say-on-Pay vote was held at our 2016 Annual Meeting of Stockholders, and received greater than 99% support. We believe this strong Say-on-Pay vote outcome shows support for the program and no changes have been made to the current program design as a result of the most recent Say-on-Pay vote. As discussed in this proxy statement, at our Annual Meeting, we will be conducting a non-binding Say-on-Pay vote.

 

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Role of Compensation Committee, Management and Compensation Consultant in Compensation Decisions

Pursuant to its charter, the Compensation Committee is responsible for overseeing our executive compensation program, developing and reviewing our executive compensation philosophy, and approving decisions regarding executive compensation.

The Compensation Committee is ultimately responsible for making the compensation decisions with respect to our CEO and creating appropriate programs for the CEO and the other NEOs. The Compensation Committee seeks and considers input from senior management and an independent compensation consultant in connection with its duties. In 2018, the Compensation Committee engaged Frederic W. Cook & Co., Inc. (“FW Cook”) as a consultant on executive compensation matters.

FW Cook’s engagement includes reviewing and advising on executive compensation matters principally related to the CEO, the executive officers, our senior executives and outside directors. For 2018, FW Cook assisted the Compensation Committee by (a) recommending a comparator group for benchmarking purposes and (b) providing comparator group data on compensation levels and design, including an analysis of target total compensation (base salary, annual incentives and long-term incentives). FW Cook also assisted the Compensation Committee in reviewing general market practices and management compensation proposals.

FW Cook performs services solely on behalf of the Compensation Committee and does not provide any other services to us. The Compensation Committee assessed the independence of FW Cook and concluded no conflicts of interest exist that would prevent FW Cook from independently representing the Compensation Committee.

Executive management regularly participates in the compensation decision-making process in the following specific respects:

 

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The CEO reports to the Compensation Committee his performance evaluation of our senior executives, including the NEOs (other than himself). Together with the Executive Vice President, Human Resources, the CEO recommends compensation decisions for these individuals, including base salary levels, the mix of incentive awards and performance objectives;

 

•

The CEO develops recommended performance objectives and targets for our incentive compensation programs; and

 

•

The CEO and the Executive Vice President, Human Resources recommend long-term incentive grants for executive officers, other than the CEO, for approval by the Compensation Committee.

Overview of 2018 Target Compensation Mix

The Compensation Committee annually reviews the CEO’s and other NEOs’ compensation. In performing this exercise, the Compensation Committee evaluates all elements of target total compensation against a pre-determined group of companies (as described below in the section titled “Market Analysis and Benchmarking”). As noted in the following section, there is a significant emphasis on performance-based components of compensation. For additional detail on each compensation component, please see the sections below titled “Base Salary,” “Annual Incentive Plan” and “Long-Term Incentive Plan” under “2018 Executive Compensation Program.”

 

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Target Compensation Mix

There is a significant emphasis on the elements that comprise performance-based pay (annual and long-term incentive awards). As illustrated in the following charts, a significant percentage of our CEO’s and all other NEOs’ target total compensation (i.e., target annual incentive, restricted stock units (“RSUs”) and PSUs) is linked to Company performance and aligned with the interests of our stockholders and considered “at-risk”: 91% for the CEO and 75% for our other NEOs.

 

 

 

(1)	Percentages are calculated using 2018 annual base salary, target annual incentive and target annual long-term incentive grant value for RSUs and PSUs. Excludes one-time RSU grants for Mr. Cartwright and Mr. Neenan.

 

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Key Executive Compensation Components

The key components of our executive compensation program for NEOs are base salary, annual incentive, employee benefits (health, welfare, retirement and perquisites) and long-term incentive (“LTI”) awards, which consist of time-vested RSUs and PSUs subject to a three-year performance period.

These elements are illustrated in greater detail below:

 

Component				Description		Purpose
Fixed		Base Salary		•  Ongoing cash compensation based on the NEO’s role, responsibilities, market data and individual performance		•  Designed to attract and retain experienced executives •  Recognizes individual experiences, skills, and sustained performance
		Benefits (health, welfare and retirement)		•  Medical, dental, qualified and nonqualified retirement plan		•  Same benefits generally available to U.S. employees
		Perquisites		•  Reimbursement for financial and tax planning services and annual physical program		•  Supports personal financial planning needs •  Ensures personal well-being
At-Risk		Annual Incentive		•  Actual pay varies between 0% and 200% of target •  Uses predominantly financial objectives, including financial goals linked to a business unit where relevant, as well as individual objectives		•  Incentivizes and drives the accomplishment of financial and individual strategic goals
		Restricted Stock Units		•  Represents 50% of target annual LTI grant value •  Vest 100% on the third anniversary of the grant date provided NEO remains continuously employed		•  Aligns NEOs and stockholders •  Encourages retention through cliff vesting
		Performance Share Units		•  Represents 50% of target annual LTI grant value •  Actual awarded shares varies between 0% and 200% of target •  Performance components include 3-year cumulative Adjusted EBITDA, Revenue and Relative TSR •  Vest 100% following three-year performance period based on actual Company performance		•  Aligns NEOs to long-term financial and share price performance •  Aligns pay and performance by linking number of shares to financial and market performance

Market Analysis and Benchmarking

As described below, we use various tools and methods, including benchmarking, to evaluate whether each NEO’s level of pay is appropriate. For 2018, the benchmarking process for all of our NEOs is described below.

 

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Benchmarking

The Compensation Committee benchmarks against the median for each pay component (i.e., base salary, target annual incentive and target LTI grants) to guide our compensation objectives. We utilize the median as a point of reference and not necessarily the definitive compensation level. Consequently, our NEOs’ compensation may be positioned at a level less than or greater than the median based on time in position, experience and competitive pay objectives, as well as other factors.

Comparator Group

In addition to general industry data, the following 20-company comparator group was approved by the Compensation Committee (the “Custom Comparator Group”) in 2017 to be used in reviewing and benchmarking the various 2018 pay components. The focus of these organizations includes managing data, providing technology solutions, providing consulting services or specialized information delivery and processing. Additionally, these are comparable-sized companies, selected to be representative of the business services, technology and financial services sectors in which we compete and participate directly or indirectly for business and, in some cases, executive talent.

 

Acxiom Corporation(1)		Equifax, Inc.		MSCI Inc.
Cardtronics, Inc.		Experian Group Limited		Paychex, Inc.
Convergys Corporation(2)		FactSet Research Systems		TeleTech Holdings, Inc.
CoreLogic, Inc.		Fair Issac Corporation		Total System Services, Inc.
CoStar Group Inc.		Global Payments, Inc.		Vantiv(3)
DST Systems, Inc.		IHS Markit Ltd.		Verisk Analytics, Inc.
The Dun & Bradstreet Corporation		Moody’s Corporation

 

(1)	Effective October 2, 2018, Acxiom Corporation is now known as LiveRamp Holdings, Inc.

(2)	On October 5, 2018, Convergys Corporation was acquired by Synnex and is now part of Concentrix. All benchmark information was completed based on fiscal year 2017 results for Convergys Corporation.

(3)	On January 16, 2018, Vantiv acquired Worldpay Group plc. The combined company is now known as Worldpay, Inc. All benchmark information was completed based on fiscal year 2017 results for Vantiv.

We evaluated a number of factors when determining an appropriate comparator group, including the characteristics described above and various quantitative metrics such as net revenue, operating income, total assets, total equity, total employees and market capitalization. This evaluation resulted in year over year changes to our comparator group with the removal of Deluxe Corporation and On Assignment, Inc. (Solera Holdings, Inc. was also removed after being acquired by Vista Equity Partners in March 2016.) Weighing each of the quantitative metrics equally for our Custom Comparator Group, our composite percentile ranking was 41% —slightly below the median of the group. While not receiving a greater weight than any other factor, the median annual net revenue of the Custom Comparator Group at the time of benchmarking was approximately $2.0 billion, compared with our 2017 revenue of $1.9 billion and our 2018 revenue of $2.3 billion.

2018 Executive Compensation Program

Base Salary

Each NEO receives an annual base salary to compensate for services rendered in the NEO’s position during the year. The Compensation Committee annually evaluates the performance of the CEO and determines his base salary in light of his goals and objectives, individual performance and competitive market data. The Compensation Committee also at least annually reviews each other NEO’s base salary based on a recommendation from the CEO, with input from our Executive Vice President, Human Resources, and adjusts the NEO’s base salary when appropriate. In general, the CEO recommends a base salary increase for the other NEOs when supported by additional responsibilities, strong individual performance or changes in competitive market data.

 

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In January 2018, as part of the annual compensation review process, Mr. Peck received a $50,000 base salary increase to reflect strong company performance and execution and to better align with peers. Following the increase, Mr. Peck’s annualized base salary is $1,000,000.

In May 2018, Mr. Neenan received a $150,000 base salary increase in recognition of the additional responsibilities associated with the acquisition of Callcredit, the second largest and fastest growing consumer credit bureau in the United Kingdom and the largest acquisition in our history, as well as the increased size and complexities of the International segment. Following the increase, Mr. Neenan’s annualized base salary is $650,000.

Messrs. Cello, Cartwright, and Danaher did not receive a base salary increase in 2018.

The following table illustrates the NEO’s 2018 annualized base salary incorporating the increases described above.

 

Named Executive Officer		2018 Annualized Base Salary				2017 Annualized Base Salary
James M. Peck		$	1,000,000			$	950,000
Todd M. Cello		$	450,000			$	450,000
Christopher A. Cartwright		$	700,000			$	700,000
David M. Neenan		$	650,000			$	500,000
John T. Danaher		$	450,000			$	450,000

Annual Incentive Plan

The annual incentive plan is designed to motivate and reward our NEOs based on financial and individual performance. Financial targets are approved by the Compensation Committee at the beginning of the performance period with individual and other qualitative goals set to successfully drive our operations and business results to achieve our overall corporate strategy. Each NEO’s annual incentive is determined by multiplying the target annual incentive percentage by the NEO’s eligible base salary and then multiplying this result by the percentage achievement with respect to the applicable financial and individual goals, provided the threshold level of performance is achieved.

Target levels

Each NEO has a target annual incentive expressed as a percentage of his eligible base salary. The target is determined by the Compensation Committee after consideration of several factors, including the NEO’s duties and responsibilities and competitive market data. Mr. Peck received an increase in his target annual incentive in 2018 from 115% of base salary to 130% of base salary to better align with his peers.

 

Named Executive Officer		2018 Target Annual Incentive as a Percentage of Base Salary
James M. Peck			130	%
Todd M. Cello			90	%
Christopher A. Cartwright			100	%
David M. Neenan			100	%
John T. Danaher			100	%

Financial and individual objectives, targets, and potential payouts

The following table defines the various financial and individual objectives applicable for the 2018 annual incentive. The actual payout ranges between 0% and 200% of target for each objective depending on actual performance. The objectives of Defined Corporate Adjusted EBITDA and Defined Corporate Revenue are to incent our NEOs based on the achievement of overall Company financial performance. Similarly, at the business

 

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unit level, Defined Adjusted EBITDA and Defined Revenue are designed to incent specific business unit financial performance. The Growth Strategy Initiative is a quantitative measure aligned to our overall growth strategy, while the Strategic Individual Objectives are quantitative and qualitative measures aligned to specific strategic objectives. Both of these objectives are set individually for each NEO in a manner that would significantly advance our growth and strategic objectives, if delivered. Additionally, these goals are designed to provide NEOs with the opportunity to achieve above target payouts only upon robust performance.

 

Objective		Definition
Defined Corporate Adjusted EBITDA		Earnings before interest, taxes, depreciation and amortization, and other adjustments deemed by management and the Compensation Committee for annual incentive plan purposes.
Defined Corporate Revenue		The overall corporate revenue, including applicable adjustments used in the calculation of Adjusted Revenue as disclosed in our Annual Report on Form 10-K, and further adjusted by management and the Compensation Committee for annual incentive plan purposes.
Defined USIS Adjusted EBITDA		Earnings before interest, taxes, depreciation and amortization, and other adjustments for annual incentive plan purposes for the USIS operating segment.
Defined USIS Revenue		The USIS operating segment revenue, including applicable adjustments used in the calculation of Adjusted Revenue as disclosed in our Annual Report on Form 10-K, and further adjusted by management and the Compensation Committee for annual incentive plan purposes.
Defined International Adjusted EBITDA		Earnings before interest, taxes, depreciation and amortization, and other adjustments for annual incentive plan purposes for the International operating segment.
Defined International Revenue		The International operating segment revenue, including applicable adjustments used in the calculation of Adjusted Revenue as disclosed in our Annual Report on Form 10-K, and further adjusted by management and the Compensation Committee for annual incentive plan purposes.
Defined Consumer Interactive Adjusted EBITDA		Earnings before interest, taxes, depreciation and amortization, and other adjustments for annual incentive plan purposes for the Consumer Interactive operating segment.
Defined Consumer Interactive Revenue		The Consumer Interactive operating segment revenue, including applicable adjustments used in the calculation of Adjusted Revenue as disclosed in our Annual Report on Form 10-K, and further adjusted by management and the Compensation Committee for annual incentive plan purposes.
Growth Strategy Initiative		Robust planning process that supports the development of growth strategy initiatives, including business cases, action plans and specific, budgeted Adjusted EBITDA growth targets that are accretive to fuel growth in future years.
Strategic Individual Objectives		Specific individual quantitative and qualitative goals aligned with our strategic objectives.

 

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The following table provides threshold, target and maximum targets for the financial objectives described above. It also provides actual 2018 results and the achievement as a percentage of target. For each financial objective, at threshold performance, the NEO receives a 20% payout, at target performance, a 100% payout and, at maximum performance, a 200% payout. The payout for performance between percentages is interpolated on a straight-line basis and performance below threshold results in a 0% payout for that financial objective.

 

Financial Objective*		Threshold (20% Payout)		Target (100% Payout)		Maximum (200% Payout)		Result				Achievement
Defined Corporate Adjusted EBITDA		$   836.3		$   880.3		$   919.9			$   908.2			171%
Defined Corporate Revenue		$2,173.2		$2,287.6		$2,390.6			$2,336.7			147%
Defined USIS Adjusted EBITDA		$   519.7		$   547.1		$   571.7			$   566.1			178%
Defined USIS Revenue		$1,164.1		$1,225.4		$1,280.5			$1,265.4			173%
Defined International Adjusted EBITDA		$   197.0		$   207.4		$   216.7			$   209.3			120%
Defined International Revenue		$   499.8		$   526.1		$   549.7			$   525.9			100%
Defined Consumer Interactive Adjusted EBITDA		$   199.3		$   209.8		$   219.2			$   224.0			200%
Defined Consumer Interactive Revenue		$   428.1		$   450.6		$   470.9			$   471.0			200%

* Amounts reflect millions.

2018 Annual Incentive Payouts

The following table summarizes each NEO’s 2018 annual incentive plan objectives described above, including the applicable weighting, achievement as a percentage of target and payout. The NEO weightings are determined based on the NEO’s role, duties, and responsibilities and are designed to strengthen the link between pay and performance.

 

Named Executive Officer		Objective		Weighting					Achievement					Payout
James M. Peck,  President and CEO		Defined Corporate Adjusted EBITDA				50%					171%				$	1,112,222
		Defined Corporate Revenue				20%					147%				$	381,333
		Growth Strategy Initiative				30%					125%				$	487,500
						Total					152%				$	1,981,056
Todd M. Cello,  CFO		Defined Corporate Adjusted EBITDA				50%					171%				$	346,500
		Defined Corporate Revenue				20%					147%				$	118,800
		Growth Strategy Initiative				30%					125%				$	151,875
						Total					152%				$	617,175
Christopher A. Cartwright,  Executive Vice President,  USIS		Defined Corporate Adjusted EBITDA				20%					171%				$	239,556
		Defined USIS Adjusted EBITDA				25%					178%				$	311,111
		Defined USIS Revenue				25%					173%				$	303,333
		Growth Strategy Initiative				20%					150%				$	210,000
		Strategic Individual Objectives				10%					150%				$	105,000
						Total					167%				$	1,169,000

 

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Named Executive Officer		Objective		Weighting					Achievement					Payout
David M. Neenan,  Executive Vice President,  International		Defined Corporate Adjusted EBITDA				20%					171%				$	204,021
		Defined International Adjusted EBITDA				25%					120%				$	178,849
		Defined International Revenue				25%					100%				$	149,041
		Growth Strategy Initiative				20%					80%				$	95,386
		Strategic Individual Objectives				10%					125%				$	74,521
						Total					118%				$	701,818
John T. Danaher,  Executive Vice President,  Consumer Interactive		Defined Corporate Adjusted EBITDA				20%					171%				$	154,000
		Defined Consumer Interactive Adjusted EBITDA				25%					200%				$	225,000
		Defined Consumer Interactive Revenue				25%					200%				$	225,000
		Growth Strategy Initiative				20%					200%				$	180,000
		Strategic Individual Objectives				10%					175%				$	78,750
						Total					192%				$	862,750

For the Strategic Individual Objectives, the CEO evaluated each of the NEOs in conjunction with such NEO’s self-evaluation, with the Compensation Committee approving the final performance. Mr. Cartwright earned a 150% payout on his Strategic Individual Objectives by delivering strong performance in the USIS segment, including growing our position in the fraud and identity space through acquisition, continuing to deliver on our growth initiatives, and continuing to develop our client experience and operating efficiencies. Mr. Neenan earned a 125% payout on his Strategic Individual Objectives by focusing efforts to shift market share, growing key strategic accounts in various countries and executing the largest acquisition in our history, Callcredit. Mr. Danaher earned a 175% payout on his Strategic Individual Objectives by delivering strong performance in the Consumer Interactive segment, including continuing to grow our direct business and launching new partnerships for our indirect business.

Long-Term Incentive Plan

2018 Annual LTI Grants

Our NEOs receive annual LTI grants, which are linked directly to the creation of stockholder value over a multi-year term. In 2018, 79% of the target total compensation opportunity provided to our CEO and 50% of the target total compensation opportunity provided to all other NEOs was equity-based and directly correlated to the Compensation Committee’s view there should be a strong connection between an NEO’s rewards and stockholder value creation.

As noted previously, 50% of the 2018 target LTI grant value was delivered in the form of time-vested RSUs that cliff vest on the third anniversary of the grant date and the remaining 50% in PSUs that vest following a three-year performance period starting January 1, 2018 and ending December 31, 2020. When dividends are paid on our common stock, unvested RSUs accrue dividend equivalents that are paid out in cash based on the number shares that vest. Similarly, for PSUs, dividend equivalents accrue during the performance period and are paid out in cash based on the number of shares that vest as a result of actual Company performance.

 

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Similar to 2017, the PSU grants made in 2018 have the following three performance components and weightings with the actual payout ranging between 0% and 200% of target for each performance component depending on actual Company performance:

 

Performance Component		Weighting
Cumulative Adjusted EBITDA(1)				45	%
Relative total stockholder return (“Relative TSR”) against the companies in the Commercial and Professional Services industry classification within the Russell 3000 Index (the “Relative TSR Peer Group”)				35	%
Cumulative Revenue(1)				20	%

 

(1)	Adjusted EBITDA and Revenue are calculated using the definitions of Adjusted EBITDA and Adjusted Revenue disclosed in our Annual Report on Form 10-K and adjusted to be on an organic, constant currency basis.

Additionally, if our Relative TSR during the performance period is negative, then the maximum payout for the Relative TSR performance component is 100%, regardless of actual performance against the Relative TSR Peer Group.

The Compensation Committee sets our financial performance targets for the cumulative Adjusted EBITDA and cumulative Revenue taking into consideration our long-term strategic plan. We do not publicly disclose specific financial performance targets on a prospective basis. Prospectively disclosing these specific targets would provide competitors and others with insights into our confidential planning process and strategies and potentially harm us competitively. We design our financial performance targets to be challenging. There is a risk we will not achieve threshold or target performance resulting in either no shares or shares awarded below target.

The performance components in our PSUs are cumulative Adjusted EBITDA and cumulative Revenue, which differ from the Defined Corporate Adjusted EBITDA and Defined Corporate Revenue financial components in our 2018 annual incentive. Each are independent financial components intended to drive different behavior. The performance targets for the annual incentive financial components are based on our annual internal operating targets and designed to incent our annual performance, while the performance targets for the PSU components are based on our long-term strategic plan and designed to incent our long-term performance.

To determine the 2018 target LTI grant value for each NEO, the Compensation Committee considered target total compensation data from our Custom Comparator Group for comparable executive positions, the strategic direction of the Company and business units, and the NEO’s scope of authority and responsibility.

The table below reflects the 2018 target LTI grant value for each NEO with respect to the annual LTI grant made on February 16, 2018.

 

Named Executive Officer		Target LTI Grant Value
James M. Peck			$8,500,000
Todd M. Cello			$1,000,000
Christopher A. Cartwright			$1,200,000
David M. Neenan			$1,200,000
John T. Danaher			$1,000,000

2016 Performance Share Unit Performance

In January 2019, the Compensation Committee approved the results for the PSU grants made to the NEOs on February 19, 2016 for the performance period of January 1, 2016 – December 31, 2018, which vested on February 15, 2019. The PSUs were tied to cumulative Adjusted EBITDA, cumulative Revenue and our Relative TSR against the companies in the Commercial and Professional Services industry classification within the Russell 3000 Index.

 

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The chart below details the applicable performance measures, weightings, targets and the certified performance achievement as a percentage of target. The payout for performance between percentages is interpolated on a straight-line basis and performance below threshold results in a 0% payout for that performance measure. The Compensation Committee did not apply any discretion to adjust the final performance achievement for the 2016 PSUs.

 

Performance Measure*		Weighting					Threshold (25% Payout)					Target (100% Payout)					Maximum (200% Payout)					Actual					Achievement
Cumulative Adjusted EBITDA(1)				50	%				$1,782.5					$1,912.0					$2,096.9					$2,235.0					200	%
Cumulative Revenue(1)				25	%				$5,018.7					$5,183.3					$5,486.3					$5,687.4					200	%
Relative TSR				25	%				25th Percentile					50th Percentile					80th Percentile and above					88th Percentile					200	%
																			Total Weighted Payout										200	%

 

*	Amounts reflect millions.

 

(1)	Adjusted EBITDA and Revenue are calculated using the definitions of Adjusted EBITDA and Adjusted Revenue disclosed in our Annual Report on Form 10-K and adjusted to be on an organic, constant currency basis.

The following table illustrates the final results for each NEO’s 2016 PSUs.

 

									Actual Performance(1)
Named Executive Officer		Performance Metric		# of Target PSUs					Payout %					# of Shares Earned
James M. Peck		Cumulative Adjusted EBITDA				57,806					200	%				115,612
		Cumulative Revenue				28,903					200	%				57,806
		Relative TSR				28,903					200	%				57,806
Todd M. Cello		Cumulative Adjusted EBITDA				2,055					200	%				4,110
		Cumulative Revenue				1,028					200	%				2,056
		Relative TSR				1,027					200	%				2,054
Christopher A. Cartwright		Cumulative Adjusted EBITDA				15,415					200	%				30,830
		Cumulative Revenue				7,708					200	%				15,416
		Relative TSR				7,707					200	%				15,414
David M. Neenan		Cumulative Adjusted EBITDA				11,561					200	%				23,122
		Cumulative Revenue				5,781					200	%				11,562
		Relative TSR				5,780					200	%				11,560
John T. Danaher		Cumulative Adjusted EBITDA				11,561					200	%				23,122
		Cumulative Revenue				5,781					200	%				11,562
		Relative TSR				5,780					200	%				11,560

 

(1)	The PSUs vested on February 15, 2019 and, therefore, are reported in the “Outstanding Equity Awards at Fiscal Year-end Table” for 2018.

One-time 2018 RSU Grants

As described above, a primary goal of our executive compensation program is to attract, motivate and retain highly experienced executives who are vital to our short- and long-term success, profitability and growth. The CEO and Compensation Committee extensively review talent retention on an on-going basis, including retention of executives with strong performance who are key to our future success. Based on this review, on June 1, 2018, Mr. Cartwright and Mr. Neenan each received a grant of RSUs with a fair market value of $2,999,946. Each

 

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grant is comprised of 43,446 RSUs that fully vest on the third anniversary of the grant date with the same terms and conditions as the 2018 annual LTI grant to employees generally. The Compensation Committee determined the grant size based on a review of Mr. Cartwright’s and Mr. Neenan’s compensation and the value of outstanding long-term incentive grants for comparable positions at peer companies. These one-time RSU grants will not affect any regular compensation arrangements for Mr. Cartwright or Mr. Neenan.

Stock Ownership Requirements

The Compensation Committee maintains a formal stock ownership policy requiring all executives (defined as the CEO and his direct reports) to hold TransUnion common stock, including unvested RSUs, in an amount equal to six times annual base salary for the CEO and three times annual base salary for all other executives. To attain the requisite multiples, the executive must retain 75% of the after-tax value of the executive’s shares received pursuant to any long-term incentive grant made after January 1, 2016 until such multiple is achieved. Executives age 60 or older are subject to a reduced ownership requirement equal to 50% of the applicable amount.

All NEOs have met their stock ownership requirements.

Prohibited Transactions

Our insider trading policy limits the timing and types of transactions in TransUnion securities by Company insiders, including our NEOs (and any member of the NEO’s family sharing the same household, any corporations or other business entities they control or manage, and any trusts of which they are the trustee or otherwise have investment control over).

Subject to certain specified exceptions, among other restrictions, the policy:

 

•

allows all executive officers, directors and other designated employees to trade TransUnion securities only during open window periods and only after they have pre-cleared transactions with the CFO and Chief Legal Officer (or their respective designees);

 

•

prohibits the short-selling of TransUnion securities or “selling against the box” (failing to deliver sold securities) unless approval is received from the CFO and Chief Legal Officer (or their respective designees), which will generally only be granted in exceptional circumstances; and

 

•

prohibits transactions in puts, calls or other derivatives on TransUnion securities on an exchange or in any other organized market, as well as any other derivative or hedging transactions on TransUnion securities unless approval is received from the CFO and Chief Legal Officer (or their respective designees), which will generally only be granted in exceptional circumstances.

Transactions made pursuant to approved 10b5-1 plans, certain stock option exercises and purchases through our employee stock purchase plan are examples of the types of transactions that may be permissible during blackout periods, in accordance with our insider trading policy.

Our insider trading policy also prohibits holding TransUnion securities in a margin account or pledging TransUnion securities as collateral for a loan unless approval is received from the CFO and Chief Legal Officer (or their respective designees).

Executive Benefits and Perquisites

The NEOs receive benefits that are part of a competitive total compensation package necessary to attract and retain executive talent, and are generally identical to those we provide to other U.S.-based employees. These benefits include medical, dental, vision, life and disability insurance. In addition, we offer a qualified retirement plan (described below) and, for the NEOs, a nonqualified supplemental retirement plan (described below).

 

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NEOs are also eligible to participate in an annual physical program and may receive reimbursement for financial planning and tax services up to the maximum amount of $15,000 for the CEO and $12,000 for the other NEOs.

Retirement Plans

We maintain the TransUnion 401(k) & Savings Plan (the “401(k) Plan”), which is a broad-based 401(k) savings and retirement plan in which all employees, including the NEOs, may participate. Generally, we match employees’ eligible contributions up to a certain amount and also may make a non-elective Company contribution. The Internal Revenue Code of 1986, as amended (the “Code”) places certain limits on the amount of contributions that may be made by and on behalf of employees to the 401(k) Plan. Therefore, to allow for contributions beyond the limits set under the Code, we also maintain the nonqualified Retirement and 401(k) Supplemental Plan (the “Supplemental Plan”). In general, under the Supplemental Plan, each NEO may defer all or some portion of the NEO’s cash compensation that the NEO was not otherwise permitted to defer under the 401(k) Plan due to limitations under the Code in order to provide additional retirement savings. We make a matching contribution to the Supplemental Plan consistent with our matching contributions under the 401(k) Plan. Additionally, we may make a discretionary non-elective contribution on behalf of the NEOs to the Supplemental Plan at the end of the year based on a similar contribution to the 401(k) Plan.

CEO Employment Agreement and Severance Agreements

Upon Mr. Peck’s hire, we entered into an employment agreement (the “Peck Employment Agreement”), which is summarized under “—Executive Compensation—Payments Upon Termination and Change in Control—2018” and the accompanying narrative.

As a result of our CEO transition, both Mr. Peck and Mr. Cartwright have entered into employment agreements, which will become effective as of the Succession Date. These agreements, as well as a summary of material terms, can be found in our Current Report on Form 8-K filed with the SEC on November 14, 2018.

We have also entered into a Severance and Restrictive Covenant Agreement (the “Severance Agreement”) with each of the other NEOs. The Severance Agreements are designed to maximize retention and are summarized under “—Executive Compensation—Payments Upon Termination and Change in Control—2018” and the accompanying narrative.

Use of Tally Sheets

In 2018, the Compensation Committee reviewed compensation summaries for each executive officer, including the NEOs. These summaries outline each component of pay and amounts paid in certain termination and change in control scenarios. Changes to our NEOs’ compensation are not based off this information, however, the Compensation Committee uses this information to confirm that pay objectives continue to be aligned with the long-term interests of the stockholders.

Federal Income Tax Considerations

Section 162(m) of the Code limits the deductibility of compensation in excess of $1 million paid to certain NEOs in any calendar year. Since our initial public offering in 2015, we have been subject to transition relief from the $1 million compensation deductibility limitation under Section 162(m). Additionally, under the tax rules in effect before 2018, compensation that qualified as “performance-based” under Section 162(m) was deductible without regard to this $1 million limit. However, the U.S. Tax Cuts and Jobs Act of 2017 (the “TCJA”) eliminated this performance-based compensation exception effective January 1, 2018, subject to a special rule that “grandfathers” certain awards and arrangements that were in effect on or before November 2, 2017. As a result, compensation that the Compensation Committee structured to qualify as performance-based compensation under Section 162(m) that is paid on or after January 1, 2018 may not be fully deductible, depending on the application of the special grandfather rules.

 

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While the TCJA limits the deductibility of compensation paid to the NEOs, such limitations will not have a material impact on the Company’s executive compensation program. Our Compensation Committee may, among other things, determine that failing to meet its objectives to attract, retain, and motivate senior executives creates more risk for the Company than the financial impact of losing the tax deduction. Our Compensation Committee will continue to structure our compensation program in the best long-term interests of our stockholders, with deductibility of compensation being one of a variety of considerations taken into account.

Risk Assessment in Compensation Programs

Our compensation programs, including our incentive compensation plans, are designed with specific features to address potential risks while rewarding employees for achieving long-term financial and strategic objectives through appropriate risk taking. The following elements are incorporated into our compensation programs to mitigate risk:

 

•

A Balanced Mix of Compensation Components—The target compensation mix for our executive officers is composed of base salary, annual cash-based incentives and long-term incentive awards, representing a mix that is not overly weighted toward short-term cash incentives. For example, our RSUs and PSUs granted in 2018 have a three-year vesting or performance period, complementing our annual incentive.

 

•

Multiple Performance Factors—Our annual incentive plan uses both corporate and business unit financial metrics and individual performance, which encourages focus on the achievement of various strategic objectives for the overall benefit of the Company.

 

•

Capped Incentive Awards—Annual incentive awards and performance share units are capped at 200% of target.

 

•

Stock Ownership—We have stock ownership requirements for our executives aligning the interests of our executive officers with the long-term interests of stockholders.

 

•

Prohibited Transactions—Our executives are prohibited from various pledging and hedging transactions.

 

•

Clawback Provision—Our annual incentive plan and long-term incentive grants contain a clawback provision, which, among other things, provides for the recoupment of compensation upon a financial restatement.

Based on these factors, the Compensation Committee, in consultation with management and FW Cook, concluded that our compensation programs are appropriate and do not create risks that are reasonably likely to have a material adverse effect on the Company.

Compensation Committee Report

The Compensation Committee of the Board of Directors of TransUnion has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

Andrew Prozes, Chair

Thomas L. Monahan, III

Leo F. Mullin

The foregoing Compensation Committee Report is not soliciting material, is not deemed filed with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

 

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EXECUTIVE COMPENSATION

Summary Compensation Table — 2018

 

Name/Principal Position		Year				Salary(1) ($)				Bonus ($)				Stock Awards(2) ($)				Option Awards ($)				Non-Equity Incentive Plan Compensation(3) ($)				Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)				All Other Compensation(4) ($)				Total ($)
James M. Peck     President and Chief     Executive Officer			2018				992,308				—				9,036,693				—				1,981,056				—				254,065				12,264,122
			2017				950,000				—				5,412,447				—				1,860,891				—				242,651				8,465,989
			2016				950,000				—				6,069,077				—				2,141,300				—				157,092				9,317,469
Todd M. Cello     Executive Vice     President and Chief     Financial Officer(5)			2018				496,811				—				1,063,106				—				617,175				—				58,655				2,235,747
			2017				371,563				—				689,107				—				425,812				—				32,944				1,519,426
Christopher A. Cartwright     Executive Vice President,     U.S. Information Services			2018				700,000				—				4,275,701				—				1,169,000				—				112,814				6,257,515
			2017				700,000				—				1,312,125				—				1,149,944				—				104,423				3,266,492
			2016				700,000				—				1,618,417				—				1,050,000				—				114,931				3,483,348
David M. Neenan     Executive Vice President,     International			2018				592,308				—				4,275,701				—				701,818				—				121,505				5,691,332
			2017				492,298				—				1,312,125				—				717,222				—				112,763				2,634,408
			2016				450,000				—				1,213,811				—				771,750				—				90,140				2,525,701
John T. Danaher     Executive Vice President,     Consumer Interactive			2018				505,828				—				1,063,106				—				862,750				—				79,724				2,511,408
			2017				417,308				—				1,093,438				—				711,208				—				19,105				2,241,059
			2016				400,000				—				1,213,811				—				724,000				—				30,096				2,367,907

 

(1)	Salary amounts for Mr. Cello and Mr. Danaher include a payout of unused accrued paid time off made to all eligible associates upon the Company’s transition to a flexible-time-off policy. Mr. Cello received $46,812 and Mr. Danaher received $55,828.

(2)

The amounts shown in this column represent the aggregate grant date fair value of RSUs and PSUs granted to the NEOs calculated in accordance with FASB ASC Topic 718. For 2018, assumptions used in the calculation of these amounts are included in Note 16, “Stock-Based Compensation,” of the consolidated financial statements in our 2018 Annual Report on Form 10-K. For PSUs, the amounts are based on probable outcomes as of the grant date. The table below illustrates the value of the PSUs for each NEO assuming maximum performance.

 

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