UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

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Securities Exchange Act of 1934

 

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ADT INC.

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LETTER FROM THE CHAIRMAN OF THE BOARD

 

Dear Fellow Stockholders,

On behalf of ADT’s Board of Directors, I look forward to welcoming you to our 2022 annual meeting.

Over the last several years, ADT has undergone a significant transformation as it creates safe, smart and sustainable solutions centered around the security and smart home ecosystem. Working closely with management, the Board continued to exercise its role in overseeing execution and refinement of the company’s strategy. In nearly every Board meeting, we discuss the company’s long-term strategy and progress against strategic objectives, allowing us to debate assumptions and offer additional perspectives.

Our foundation of good governance practices has served us well and will continue to do so into the future. The combination of the depth of leadership experience among Board members and specific expertise in innovation, technology, consumer brand management, finance and M&A has been crucial to our collective oversight of the management team.

We continue to evaluate our own performance and composition regularly, remaining mindful of the need for the Board to possess a wide range of skills, qualifications, experiences and backgrounds. Across these aspects and others, we look to enhance diversity in the boardroom and we were pleased to welcome Sigal Zarmi, an expert in technology and innovation, to the Board as an independent director in 2021, and Benjamin Honig, a representative of Temasek, in 2022. We will also have two members departing our Board. On behalf of my fellow directors, the Company and ADT stockholders, I’d like to thank Andrew Africk and David Ryan for their service and contributions over the past several years.

As we look forward to 2022, the Board welcomes your engagement. We encourage you to share suggestions and concerns with us. In particular, we encourage you to review this proxy statement and vote in the upcoming meeting.

As always, we deeply appreciate your support of this iconic company.

Sincerely,

 

 

Marc Becker

LETTER FROM THE PRESIDENT AND

CHIEF EXECUTIVE OFFICER

 

Dear Fellow Stockholders,

It’s an extraordinary time for all of us at ADT. Our work over the past several years has transformed and reshaped our Company, while creating a diversified, scaled business. We’re now well positioned to accelerate our growth and transition into a new chapter.

During much of ADT’s 147 year history, we were focused solely on personal home security. But as today’s consumers continue to expand their definition of safety – ADT is changing with them. Accordingly, our mission has evolved beyond the traditional definition of security to a mission of Safe, Smart, and Sustainable.

Safe: We protect what matters most

Smart: We deliver customer-focused products, technologies, and services

Sustainable: We make life better for the customers and communities we serve

As we look to 2022 and beyond, our top objective is to delight and protect our customers through our offerings in smart home and residential security, commercial security, and residential solar. We remain obsessively focused on customer satisfaction to drive strong brand loyalty and increased customer retention. To do this, we will leverage our strategic differentiators – our innovative offerings, unrivaled safety, and premium customer experience – to drive growth in the business. Our growth will be augmented by benefits from our transformational Google partnership, the rebound in our Commercial segment performance, and our entry into the fast-growing residential solar business with our acquisition of Sunpro Solar, now rebranded as ADT Solar. By empowering customers to protect and connect what matters most, we can inspire them to choose ADT and stay with ADT which we believe will drive long-term stockholder value.

We also know that adopting strong Environmental, Social and Governance (“ESG”) practices is good for our business and a reflection on our trusted brand. Our mission delivers superior results for all stakeholders – our stockholders, our employees and the customers and communities we serve. We’re committed to living our values and integrating ESG into our business operations. And while we’re still early in this journey, we’re committed to transparent communication of our progress.

We’re excited for our future. We have a refreshed mission, a clear strategy and growth plan, and the best team in the industry to execute on it. Our goal is to be for our investors as we are for our customers – safe, smart, and sustainable.

Sincerely,

 

 

Jim DeVries

CONTENTS

 

 

 

Table of Contents

 

 

		2022 PROXY STATEMENT

TABLE OF CONTENTS

 

 

 

 

		2022 PROXY STATEMENT

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

 

 

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

 

Date:		Wednesday, May 25, 2022
Time:		8:30 a.m. EDT
Place:		Virtual Meeting
Record Date:		Close of Business, March 30, 2022

Meeting Agenda

 

•

To elect Matthew Nord, Eric Press and Matthew Winter to the Board of Directors of the Company (the “Board of Directors”) as Class II directors, in each case, for a term of three years expiring at the Annual Meeting of Stockholders to be held in 2025;

 

•

To conduct an advisory vote to approve the compensation of the Company’s named executive officers (“NEOs”);

 

•

To ratify the appointment of PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022; and

 

•

To transact such other business as may properly come before the Annual Meeting of Stockholders, or any postponement or adjournment thereof.

Holders of the Company’s common stock, par value $0.01 per share (“Common Stock”), of record at the close of business on March 30, 2022 are entitled to notice of, and to vote on all matters presented at, the Annual Meeting of Stockholders or any postponements or adjournments thereof.

Holders of the Company’s Class B common stock, par value $0.01 per share (“Class B Common Stock”), of record at the close of business on March 30, 2022 are entitled to notice of, and to vote on all matters presented at, the Annual Meeting of Stockholders or any postponements or adjournments thereof, except for the election of directors.

In our proxy materials, we refer to our holders of Common Stock as our “Common Stockholders”; we refer to our holders of Class B Common Stock as our “Class B Common Stockholders”; we refer to Common Stock and Class B Common Stock together as “common stock”; and we refer to all of our holders of common stock as “stockholders.”

We will furnish proxy materials to all of our stockholders via the Internet in order to expedite stockholders’ receipt of proxy materials while lowering the cost of delivery and reducing the environmental impact of our Annual Meeting of Stockholders.

Accordingly, we are mailing to our stockholders of record and beneficial owners a Notice of lnternet Availability of Proxy Materials (the “Notice”), which provides instructions on how to access the attached proxy statement and our annual report to stockholders for the fiscal year ended December 31, 2021 via the Internet and how to vote online. The Notice also contains instructions on how to obtain the proxy materials in printed form.

We are pleased to announce that the Company will conduct its Annual Meeting on the above date and time by live audio webcast in lieu of an in-person meeting. Your Board believes this meeting format will enhance and facilitate attendance by providing convenient access for all of our stockholders. In addition, this meeting format will help eliminate public health concerns around the COVID-19 pandemic and the significant costs associated with holding an in-person meeting. You will be able to attend the Annual Meeting, vote and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/ADT2022. We have planned and designed the meeting to encourage stockholder participation, protect stockholder rights, and promote transparency.

Dated: April 12, 2022

By order of the Board of Directors

 

 

David Smail

Executive Vice President, Chief Legal Officer and Secretary

 

		2022 PROXY STATEMENT		1

PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

 

PROPOSAL 1 — ELECTION OF DIRECTORS

Directors hold office until the third succeeding annual meeting of stockholders following their election and until the election and qualification of their successors. Under the Company’s amended and restated bylaws and amended and restated certificate of incorporation, the Board of Directors can change the number of directors comprising the entire Board of Directors so long as the number is not more than 15. The Board of Directors currently consists of 12 directors. In April 2022, Mr. Andrew Africk, currently a Class II director, notified the Company that he will be retiring from the Board of Directors immediately after the Annual Meeting.

All of the nominees are members of the current Board of Directors. If any nominee for election to the Board of Directors should be unable to accept their nomination or election as a director, which is not expected, your proxy may be voted for a substitute or substitutes designated by the Board of Directors, or the number of directors constituting the Board of Directors may be reduced in accordance with the Company’s bylaws and certificate of incorporation.

Directors will be elected by the holders of a plurality of the voting power of our Common Stockholders present in person or represented by proxy at the Annual Meeting and entitled to vote. Abstentions and broker non-votes will not be counted for purposes of the election of directors. Under our amended and restated certificate of incorporation, holders of Class B Common Stock are not entitled to vote for the election of directors.

 

2		2022 PROXY STATEMENT

PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

 

DIRECTOR SKILLS AND EXPERIENCE

 

The Board is comprised of directors with broad and varied experience and expertise who are committed to representing the long-term interests of stockholders. The following summarizes the key skills and experiences represented on our Board:

 

Mr. Africk has not been included in the above charts in light of his advising the Company that he will be retiring from the Board immediately after the Annual Meeting.

 

		The Board of Directors recommends that the Common Stockholders vote FOR the election of the nominees for Class II directors listed below.

 

		2022 PROXY STATEMENT		3

PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

 

Class II Directors

 

 

The term of the following three Class II directors will expire at the Annual Meeting. Messrs. Nord, Press and Winter are the only nominees for election at the Annual Meeting for a term that will expire at the 2025 Annual Meeting of Stockholders and until each of their successors has been duly elected and qualified. Andrew Africk, who currently serves as a Class II director, advised the Company in April 2022 that he will be retiring from the Board immediately after the Annual Meeting.

 

Matthew H. Nord
Age: 42   Director Since: 2016		Matthew H. Nord is a member of our Board of Directors and a designee of funds managed by affiliates of Apollo Global Management, Inc. (together with its subsidiaries and affiliates, “Apollo” or the “Sponsor”). Mr. Nord is a Partner and Co-Head of Private Equity at Apollo Global Management, where he oversees the firm’s private equity strategy and has led numerous investments across technology, healthcare and business services. Mr. Nord currently serves on the board of directors of TD Synnex, a leading IT distributor and solutions aggregator for the IT ecosystem, Intrado Corporation, a telecommunications company, Lifepoint Health, an operator of health systems in non-urban markets in the U.S., and ScionHealth, an acute and post-acute hospital based healthcare provider. Mr. Nord previously served on the boards of directors of Tech Data Corporation, an information technology distribution company, Exela Technologies, Inc. f/k/a Novitex Holdings, Inc., a provider of comprehensive on-site outsourcing services, and Presidio, Inc., an IT solutions provider. Prior to joining Apollo in 2003, Matt was a member of the Investment Banking division of Salomon Smith Barney Inc. Mr. Nord graduated summa cum laude from the University of Pennsylvania’s Wharton School of Business with a BS in Economics. He also serves on the Montefiore Health System Board of Trustees, the Board of Advisors of the University of Pennsylvania’s Stuart Weitzman School of Design and the Rock and Roll Hall of Fame Foundation.

 

Eric L. Press
Age: 56   Director Since: 2016   Committees •  Nominating and Corporate Governance		Eric L. Press is a member of our Board of Directors and a designee of Apollo. Mr. Press is a Partner at Apollo, having joined in 1998. In his time with Apollo, he has been involved in many of the firm’s investments in basic industrials, metals, lodging/gaming/leisure and financial services. Prior to joining Apollo, Mr. Press worked at the law firm of Wachtell, Lipton, Rosen & Katz, specializing in mergers, acquisitions, restructurings and related financing transactions. Prior thereto, Mr. Press was a consultant with The Boston Consulting Group, a management consulting firm focused on corporate strategy. Mr. Press serves on the boards of directors of Knight Health Holdings, LLC d/b/a ScionHealth, an acute and post-acute hospital based healthcare provider, Lottomatica S.p.A. (f/k/a Gamenet Group S.p.A.), an integrated gaming operator based in Italy, Apollo Commercial Real Estate Finance, Inc., a public real estate investment trust, and DSB Parent L.P. (parent of LifePoint Health Inc., an operator of health systems in non-urban markets in the U.S.). He previously served on the boards of directors of Eagle LM5 Holdings Inc., a holding company associated with a former investment in Constellis, a global provider of risk management, security, training, and global support services, Caesars Entertainment Corporation, a casino-entertainment company, Princimar Chemical Holdings, LLC, a holding company for an investment in a shipping company that operated in the chemical shipping sector, and PlayAGS, Inc., a designer, manufacturer, and distributor of slot machines. He graduated magna cum laude from Harvard College with an AB in economics and Yale Law School, where he was a Senior Editor of the Yale Law Journal.

 

4		2022 PROXY STATEMENT

PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

 

Matthew E. Winter
Age: 65   Director Since: 2018   INDEPENDENT   Committees •  Audit (Chairman)		Matthew E. Winter is a member of our Board of Directors. Mr. Winter was the President of The Allstate Corporation from January 2015 to February 2018, and prior to that, served as the President, Allstate Personal Lines for The Allstate Corporation from January 2013 to January 2015. Mr. Winter joined The Allstate Corporation in 2009 as President and Chief Executive Officer of Allstate Financial. Mr. Winter also serves on the board of directors and the Audit and Compensation Committees of H&R Block Inc., a tax preparation company, and on the board of directors and Compensation Committee and Finance, Investment & Risk Management Committee of the Hartford Financial Services Group, an investment and insurance company. Mr. Winter holds a Bachelor of Science degree from the University of Michigan, a Juris Doctor degree from the Albany Law School of Union University, and a Master of Laws degree from the University of Virginia School of Law.

Class III Directors

 

 

The term of the following four Class III directors will expire at the 2023 Annual Meeting of Stockholders.

 

Marc. E. Becker
Age: 49   Director Since: 2016   Committees •  Compensation (Chairman) •  Executive (Chairman) •  Nominating and Corporate Governance (Chair)		Marc E. Becker is the chairman of our Board of Directors and a designee of Apollo. Mr. Becker joined Apollo in 1996 and is a Partner based in New York. Prior to joining Apollo in 1996, Mr. Becker was employed by Smith Barney Inc. within its Investment Banking division. Mr. Becker is on the Boards of Reno de Medici S.p.A, a leading producer of recycled carton board based in Italy, and SHC Services, Inc. (d/b/a Supplemental Health Care), a leading health care staffing provider. Mr. Becker is actively involved in a number of non-profit organizations and serves as a board member of the TEAK Fellowship, a New York City based non-profit, and Park Avenue Synagogue. Previously, Mr. Becker has also served on the boards of directors of OneMain Holdings Inc., a consumer lending company, Sun Country Airlines Holdings, Inc., a U.S. airline, CEVA Holdings LLC, a supply chain management company, Pinnacle Agriculture Holdings, LLC, a holding company for an agricultural input distribution business investment, Realogy Holdings Corp., a provider of residential real estate services in the U.S., Mount Sinai Children’s Center Foundation, which provides philanthropic support for Mount Sinai and Mount Sinai Kravis Children’s Hospital, and Vantium Management L.P., a management entity for an investment in a company that acquired and serviced non-conforming residential loans. Mr. Becker graduated cum laude with a BS in Economics from the University of Pennsylvania’s Wharton School of Business.

 

		2022 PROXY STATEMENT		5

PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

 

Stephanie Drescher
Age: 49   Director Since: 2017		Stephanie Drescher is a member of our Board of Directors and a designee of Apollo. Ms. Drescher is a Partner and Chief Client and Product Development Officer at Apollo, having joined in 2004, and is a member of the firm’s Management Committee. Prior to joining Apollo, Ms. Drescher was employed by JP Morgan for ten years, primarily in its Alternative Investment group. Ms. Drescher has served on the boards of directors of the JP Morgan Venture Capital Funds I and II, JP Morgan Corporate Finance Funds I and II, JP Morgan Private Investments Inc., and Allied Waste, which owned and operated solid waste collection businesses, recycling facilities, and landfills in the United States. Ms. Drescher is currently a Board Observer for iCapital, a global financial technology platform for alternative investments, and is on the boards of directors of The Student Leadership Network. Ms. Drescher graduated summa cum laude, Phi Beta Kappa from Barnard College of Columbia University and earned her MBA from Columbia Business School.

 

Reed B. Rayman
Age: 35   Director Since: 2016   Committees •  Compensation •  Executive		Reed B. Rayman is a member of our Board of Directors and a designee of Apollo. Mr. Rayman is a Partner at Apollo, a leading global alternative investment manager, where he has worked since 2010. Mr. Rayman previously was employed by Goldman, Sachs & Co. in both its Industrials Investment Banking and Principal Strategies groups from 2008 to 2010. Mr. Rayman serves on the boards of directors of Yahoo!, a web services provider, Careerbuilder, an employment website, Shutterfly, an e-commerce platform and manufacturer of personalized photo based products, Coinstar, a fully automated network of self-service coin-counting and bitcoin ATM machines, EcoATM, which operates used mobile phone trade-in kiosks and an on-line trade-in site, and Redbox Entertainment Inc., an operator of digital streaming services. He previously served on the board of directors of Mood Media, a television production company. Mr. Rayman is actively involved with the TEAK Fellowship, having served as a mentor and on the Young Professionals Board; he also serves on the Private Equity Executive Council of the UJA Federation of New York. Mr. Rayman holds a B.A. in Economics from Harvard University.

 

6		2022 PROXY STATEMENT

PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

 

Sigal Zarmi
Age: 58   Director Since: 2021   INDEPENDENT   Committees •  Audit		Sigal Zarmi is a member of our Board of Directors. Ms. Zarmi has over 30 years of experience in large scale digital transformation, technology operations, strategic planning, leadership and talent development. She is currently a Senior Advisor at Morgan Stanley, a multinational investment bank and financial services company, and at Boston Consulting Group, Inc., a global management consulting firm. Prior to her current position at Morgan Stanley, she served as its International CIO and Global Head of Transformation. Prior to Morgan Stanley, Ms. Zarmi was Vice Chairman - Global and US CIO of PwC. Before that, she was the CIO of GE Capital Americas, where she spent 18 years in various executive technology and operations leadership positions. Ms. Zarmi is on the board of directors at Hashicorp, Inc., an infrastructure software company, and DataRobot, Inc., a data science and AI cloud company. Ms. Zarmi was inducted into The CIO Hall of Fame in 2021 for her contributions and honored by Pace University with the Seidenberg Innovation Award for her leadership in digital transformation and contributions to advancing diversity in STEM. Under her leadership Morgan Stanley was named to Fast Company Best Workplaces for Innovators three years in a row. Ms. Zarmi holds an MBA from Columbia University in New York City and a B.S. in Engineering from the Technion—Israel Institute of Technology in Haifa, Israel.

Class I Directors

 

 

The term of the following four Class I directors will expire at the 2024 Annual Meeting of Stockholders.

 

James D. DeVries
Age: 59   Director Since: 2018   President and Chief Executive Officer   Committees: •  Executive •  Nominating and Corporate Governance		James D. DeVries is a member of our Board of Directors, and our President and Chief Executive Officer. Mr. DeVries was appointed as our President in September 2017 and as our Chief Executive Officer in December 2018. From May 2, 2016 to September 2017, Mr. DeVries served as our Executive Vice President and Chief Operating Officer. From December 2014 to May 2016, Mr. DeVries served as Executive Vice President of Brand Operations at Allstate Insurance Company, the second largest personal lines insurer in the United States. During his tenure at Allstate, Mr. DeVries led the operations organization, comprising approximately 7,000 employees in the United States, Northern Ireland and India, and was responsible for, among other things, customer care centers, outbound and inbound phone sales, procurement, technical support, life underwriting and claims, real estate, administration, and fleet management. From March 2008 to December 2014, Mr. DeVries served as Executive Vice President and Chief Administrative Officer of Allstate, where he was accountable for, among other things, real estate and administration, human resources, and procurement. Prior to joining Allstate in 2008, Mr. DeVries served in various executive and management roles at Principal Financial Group, Ameritech, Quaker Oats Company, and Andrew Corporation. Mr. DeVries is a board member of Amsted Industries Inc., a diversified global manufacturer of industrial components serving primarily the railroad, vehicular, and construction and building markets, and a past board member of the Human Resources Management Association of Chicago, the Chicago Public Library Foundation, and the Boys & Girls Clubs of Central Iowa. Mr. DeVries received a bachelor’s degree from Trinity College, which is now known as Trinity International University, a master’s degree from Loyola University, and an MBA from the Kellogg School of Management at Northwestern University.

 

		2022 PROXY STATEMENT		7

PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

 

Tracey R. Griffin
Age: 57   Director Since: 2018   INDEPENDENT   Committees •  Audit •  Compensation(1)		Tracey R. Griffin is a member of our Board of Directors. Ms. Griffin currently serves as the Chief Financial Officer and Chief Operating Officer of Framebridge, Inc., an online and retail custom framing brand. Prior to her position at Framebridge, Ms. Griffin served as Chief Financial Officer of Austin-based lifestyle retail brand Kendra Scott, from September 2018 to November 2019. Prior to that, Ms. Griffin served as Chief Financial Officer of PANDORA Americas, a global affordable jewelry brand, from February 2016 to September 2018, following her tenure as Chief Operating Officer from October 2014 to February 2016. In these roles at PANDORA, Ms. Griffin was responsible for implementing and overseeing strategic growth initiatives across the company, including its expansion into Latin America. Prior to that, she served as a Senior Partner at McKinsey & Company, a global management consulting firm, where she focused on retail and consumer goods clients. Ms. Griffin currently serves on the board of directors of The Children’s Place, a specialty, mall-based retailer, where she also sits on the Human Capital & Compensation Committee. In addition, Ms. Griffin sits on the non-profit organization Partnership for a Healthier America, where she is the Chairman of the Finance and Audit Committee, and has previously served on the Board and Strategy Committee of the United Negro College Fund (UNCF). Ms. Griffin received her BS in Finance from Georgetown University and an MBA from the Stanford Graduate School of Business.

 

(1)	Ms. Griffin will join the Compensation Committee effective upon completion of the Annual Meeting.

 

Benjamin Honig
Age: 33   Director Since: 2022		Benjamin Honig is a member of our Board of Directors and a board designee of certain investors (the “Co-Investors”) in our indirect parent entities other than Apollo, and was designated by an affiliate of Temasek International (USA) LLC (“Temasek”). Mr. Honig has worked at Temasek, a global investment company, since 2013, investing in technology, media, healthcare and business services companies. In his role at Temasek, Mr. Honig currently serves as a member of the board of directors of Horizon Media Holdings, LLC, a media agency, and as a board observer of Creative Artists Agency (CAA) Holdings, LLC, a talent agency. He was also closely involved in investments made by Temasek including Virtu Financial, Inc., EMC Corp., VMware, Inc., Dell Technologies, Inc., and Harry’s, Inc. From 2010 to 2013, Mr. Honig was employed by Credit Suisse as an investment banker in the Mergers and Acquisitions department. Mr. Honig received his B.A. in Economics from Cornell University.

 

Lee J. Solomon
Age: 50   Director Since: 2016		Lee J. Solomon is a member of our Board of Directors and a designee of Apollo. He is a Partner at Apollo Private Equity having joined in 2009. Previously, Mr. Solomon was an executive in the media industry, and prior to that, he served as a Principal at Grosvenor Park, which was a joint venture with Fortress Investment Group. Prior to that, he was the Executive Vice President of Business Affairs for Helkon Media. Mr. Solomon also serves on the board of directors of media companies Terrier Media Holdings, Inc. (d/b/a Cox Media Group) and Terrier Gamut Holdings, Inc., Aspen Holdco, LLC (parent of Coinstar, a fully automated network of self-service coin-counting machines), EcoATM Parent, LLC, which operates used mobile phone trade-in kiosks and an on-line trade-in site, Redbox Entertainment Inc., an operator of digital streaming services, College Parent Holdings GP LLC (parent of Yahoo!), a web services provider, Colonnade Acquisition Corp. II, a special purpose acquisition company, and Legend Pictures, LLC, a film production and mass media company. He previously served on the board of directors of Redwood Holdco, LLC (former parent of Redbox), ecoATM, LLC, AP NMT JV Newco B.V. (parent of Endemol Shine Group), a television production company, and Mood Media Corporation, a provider of in-store media solutions. Mr. Solomon graduated from the University of Rochester with a BA in Economics and Political Science and received his MBA from The Stern School of Business at New York University.

 

8		2022 PROXY STATEMENT

CORPORATE GOVERNANCE

 

 

 

CORPORATE GOVERNANCE

Controlled Company

 

 

Our Common Stock is listed on the New York Stock Exchange (“NYSE”). As Apollo controls more than 50% of the combined voting power of the Company, we are considered a “controlled company” for the purposes of that exchange’s rules and corporate governance standards. We have availed ourselves of the “controlled company” exception under the NYSE rules, which exempts us from certain requirements, including the requirements that we have a majority of independent directors on our Board of Directors and that the Compensation Committee of our Board of Directors (the “Compensation Committee”) and Nominating and Corporate Governance Committee of our Board of Directors (the “Nominating and Corporate Governance Committee”) be comprised entirely of independent directors. The Audit Committee of our Board of Directors (the “Audit Committee”) is comprised entirely of independent members.

If at any time we cease to be a “controlled company” under the NYSE rules, the Board of Directors will take all action necessary to comply with the applicable NYSE rules, including appointing a majority of independent directors to the Board of Directors and ensuring that our Compensation Committee and our Nominating and Corporate Governance Committee are comprised entirely of independent directors, subject to a permitted “phase-in” period.

Director Independence

 

 

We have availed ourselves of the “controlled company” exception under the NYSE rules, which exempts us from certain requirements, including that we have a majority of independent directors on our Board of Directors (see “Corporate Governance—Controlled Company”). No director qualifies as independent unless the Board of Directors affirmatively determines that the director has no material relationship with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company). The Board of Directors broadly considers all relevant facts and circumstances relative to independence and considers the issue not merely from the standpoint of the director, but also from the viewpoint of persons or organizations with which the director has an affiliation. Material relationships can include commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships (among others). In accordance with the NYSE listing standards, the Board of Directors considers the following categorical standards of director independence, according to which independent directors:

 

•

Are not, nor have been within the last three years, an employee of the listed company, or an immediate family member is, or has been within the last three years, an executive officer, of the listed company;

 

•

Have not received, nor have an immediate family member who has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from the listed company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service);

 

•

(a) Are not a current partner or employee of a firm that is the listed company’s internal or external auditor; (b) do not have an immediate family member who is a current partner of such a firm; (c) do not have an immediate family member who is a current employee of such a firm and personally works on the listed company’s audit; or (d) were not, and do not have an immediate family member who was, within the last three years, a partner or employee of such a firm and personally worked on the listed company’s audit within that time;

 

•

Are not, and do not have an immediate family member who is, or has been within the last three years, employed as an executive officer of another company where any of the listed company’s present executive officers at the same time serves or served on that company’s compensation committee;

 

•

Are not a current employee, or an immediate family member is not a current executive officer, of a company that has made payments to, or received payments from, the listed company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues; and

 

		2022 PROXY STATEMENT		9

CORPORATE GOVERNANCE

 

 

 

•

Do not accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the issuer or any subsidiary thereof.

The listing standards of the NYSE and the rules of the Securities and Exchange Commission (the “SEC”), require the members of a company’s audit committee to be independent. As a “controlled company,” the majority of our Board of Directors is not required to be independent.

The Board of Directors has determined that Ms. Griffin, Mr. Winter and Ms. Zarmi are our independent directors, as such term is defined by the applicable rules and regulations of the SEC and the NYSE. Our Audit Committee is comprised of Ms. Griffin, Mr. Winter, who serves as chair, and Ms. Zarmi. During Mr. Africk’s service on the Board, Mr. Africk was also determined to be an independent director by the Board.

Board of Directors Leadership Structure and Board’s Role in Risk Oversight

 

 

The Board of Directors has an oversight role, as a whole and also at the committee level, in overseeing management of the Company’s risks. The Board of Directors regularly reviews information regarding our credit, liquidity, and operations, as well as the risks associated with each, and takes an active role in reviewing our enterprise risk management process. The Compensation Committee is responsible for overseeing the management of risks relating to employee compensation plans and arrangements, and the Audit Committee is responsible for overseeing the management of financial risks, which also more broadly encompasses enterprise risk management, including compliance, cybersecurity, privacy and related risks, as well as the Company’s ESG strategies, policies and public disclosures. While each committee is responsible for evaluating certain risks, and overseeing the management of such risks, the entire Board of Directors is regularly informed through committee reports about such risks.

The Chairman of our Board of Directors and our Chief Executive Officer (“CEO”) are currently separate. Our Board of Directors does not currently have a policy as to whether the role of Chairman of our Board of Directors and the CEO should be separate. Our Board of Directors believes that the Company and its stockholders are best served by maintaining the flexibility to determine whether the Chairman and CEO positions should be separated or combined at a given point in time in order to provide appropriate leadership for us at that time. In addition, our Board of Directors does not currently have a policy as to whether an independent director may be appointed as lead director.

The Board of Directors understands that no single approach to board leadership is universally accepted and that the appropriate leadership structure may vary based on several factors, such as a company’s size, industry, operations, history and culture. Accordingly, our Board of Directors, with the assistance of the Nominating and Corporate Governance Committee, assesses its leadership structure in light of these factors and the current environment to achieve the optimal model for us and for our stockholders.

The composition of the Board of Directors, the tenure of the directors with the Company, the overall experience of the directors and the experience that the directors have had with the Chairman and the executive management group permit and encourage each member to take an active role in all discussions, and each member does actively participate in all substantive discussions. We believe that our current Board of Directors leadership structure is serving the Company well at this time.

Board of Directors Meetings and Committees

 

 

In fiscal 2021, the Board of Directors held six meetings. During the past fiscal year, all directors attended at least 75% of the meetings of the Board of Directors and of the committees on which they served.

Recent representative discussion topics of the Board of Directors included:

 

•

The Company’s mission and strategy, as well as short term and long term objectives in light of such strategy.

 

•

The Company’s strategic initiatives including, with respect to the acceleration of capital efficient growth, maintaining a market leadership position, brand management, go to market initiatives, innovation in products and offerings, and prioritizing the customer experience.

 

•

Budget in light of key strategic investment areas and product innovation.

 

10		2022 PROXY STATEMENT

CORPORATE GOVERNANCE

 

 

 

•

Mergers and acquisitions activity, including the acquisition of Compass Solar Group, LLC (“Sunpro Solar”) (the “Sunpro Solar Acquisition”), and various strategic tuck in acquisitions across the business. The Board of Directors discussed the proposed acquisition of Sunpro Solar and its significance to the Company’s strategic initiatives during multiple meetings prior to the consummation of the acquisition.

 

•

Cybersecurity, including a tabletop exercise during which key stakeholders reviewed real-world scenarios in order to: (i) evaluate and test readiness and response capabilities; (ii) facilitate discussions around strategies, effectiveness, and gaps; and (iii) suggest improvements for consideration in readiness and response.

 

•

Enterprise Risk Management and associated risk mitigation efforts, including the approval of a company-wide Risk Appetite Statement.

 

•

The impact of COVID-19 on team members, customers and the operations across the Company generally.

 

•

The Company’s ESG initiatives.

 

•

Certain capital structure and cost of funds considerations.

 

•

Reviews by each committee Chairperson of the matters discussed during their most recent committee meetings, together with any committee-recommended actions for the consideration of the Board of Directors.

The Board of Directors has four committees:

 

•

Audit;

 

•

Compensation;

 

•

Executive; and

 

•

Nominating and Corporate Governance.

Each of these committees operates under written charters which are available at the Company’s website at https:// investor.adt.com/ by opening the “Governance” tab, clicking on “Governance Documents,” and clicking on the name of the respective committee. Committee charters are also available in print upon the written request of any stockholder. The current committee membership of our Board of Directors is as follows:

 

Name		Audit Committee		Compensation Committee		Executive Committee		Nominating and   Corporate Governance Committee
Marc E. Becker
James D. DeVries
Tracey R. Griffin(1)
Eric L. Press
Reed B. Rayman
Matthew E. Winter
Sigal Zarmi

 = Member              = Committee Chair

 

(1)	Mr. Africk served on the Compensation Committee during his tenure on the Board. Upon Mr. Africk’s retirement from the Board immediately after the Annual Meeting, Ms. Griffin will join the Compensation Committee.

Audit Committee

 

 

In fiscal 2021, the Audit Committee held five meetings. Our Audit Committee consists of Mr. Winter (Chair), Ms. Griffin and Ms. Zarmi. Our Board of Directors has determined that each of Ms. Griffin, Mr. Winter and Ms. Zarmi qualify as an “audit committee financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K and that each of Ms. Griffin,

 

		2022 PROXY STATEMENT		11

CORPORATE GOVERNANCE

 

 

 

Mr. Winter and Ms. Zarmi are independent as independence is defined in Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and under the NYSE listing standards. The principal duties and responsibilities of our Audit Committee include the following:

 

•

To oversee and monitor our accounting, tax, treasury, financial reporting, external reporting, and asset-safeguarding policies and processes;

 

•

To oversee and monitor the integrity of our financial statements and internal controls;

 

•

To oversee and monitor the independence, retention, performance, and compensation of our independent auditor;

 

•

To oversee and monitor the performance of our internal audit function;

 

•

To discuss, oversee, and monitor policies with respect to risk assessment and risk management;

 

•

To discuss with management our information technology and cybersecurity risks and concerns on an annual basis, and more frequently if and as needed;

 

•

To oversee and monitor our compliance with legal and regulatory requirements and the implementation and effectiveness of our compliance and ethics programs;

 

•

To review and evaluate any actual or potential conflict of interest regarding a related person transaction;

 

•

To engage with management periodically regarding management’s ESG related initiatives and the use and reporting of related ESG metrics;

 

•

To conduct investigations the Audit Committee deems appropriate;

 

•

To prepare the annual Audit Committee report to be included in our annual proxy statement; and

 

•

To provide regular reports to the Board of Directors.

The Audit Committee has the authority to retain counsel and advisors to fulfill its responsibilities and duties and to form and delegate authority to subcommittees.

Recent representative discussion topics of the Audit Committee included:

 

•

Disclosure, internal control implications and integration considerations relating to the Company’s various M&A activities, including the Company’s acquisition of SunPro Solar and joint venture with Ford.

 

•

The Company’s Enterprise Risk Management framework, including the recommendation to the Board of Directors of a company-wide Risk Appetite Statement.

 

•

Review of accounting and disclosure implications stemming from the impact of COVID-19 and related internal control requirements of a work from home environment.

 

•

Disclosures relating to ESG, corporate responsibility and related metrics and the Company’s ongoing ESG program.

 

•

Information technology operation risks and cybersecurity.

 

•

Financing transactions considered by the Company and the Company’s capital structure.

 

•

Tax and Treasury operations and ongoing strategies.

 

•

Compliance and ethics matters.

 

•

Review of regulatory and legislative developments impacting the Company and industry.

 

•

Significant legal matters being addressed by the Company.

Executive Committee

 

 

Our Executive Committee of the Board of Directors (the “Executive Committee”) consists of Messrs. Becker (Chair), DeVries, and Rayman. In fiscal 2021, the Executive Committee held no meetings. Subject to certain exceptions, the Executive Committee generally may exercise all of the powers and duties of the Board of Directors when the Board of Directors is not in session, or when it is impractical to call a special meeting of the Board of Directors, and to implement the policy decisions of the Board of Directors. The Executive Committee serves at the pleasure of our Board of Directors. This committee and any of its members may continue to serve or be changed once our Sponsor no longer owns a controlling interest in us.

 

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CORPORATE GOVERNANCE

 

 

 

Compensation Committee

 

 

In fiscal 2021, the Compensation Committee held three meetings. During 2021, our Compensation Committee consisted of Messrs. Becker (Chair), Africk and Rayman. The principal duties and responsibilities of the Compensation Committee include the following:

 

•

Review and determine the Company’s compensation strategy to ensure it is appropriate to attract, retain and motivate senior management and other key employees;

 

•

Review and determine the executive compensation philosophy, policies and programs that in the Committee’s judgment support the Company’s overall business strategy and review and discuss, at least annually, the material risks associated with executive compensation structure, policies and programs to determine whether such structure, policies and programs encourage excessive risk-taking and evaluate compensation policies and practices that could mitigate any such risk;

 

•

On an annual basis, review and approve the corporate goals and objectives relevant to the compensation of the Company’s CEO, evaluate the CEO’s performance in light of these goals and objectives, and determine and approve CEO compensation based on this evaluation;

 

•

On an annual basis, review and approve corporate goals and objectives relevant to the compensation of the Company’s other executive officers, evaluate the executive officers’ performance in light of those goals and objectives, and determine and approve executive officer compensation based on this evaluation;

 

•

Review, approve and administer the Company’s incentive compensation, equity-based and pension plans;

 

•

Review and approve any employment agreement or compensatory transaction with an executive officer of the Company involving compensation in excess of $120,000 per year;

 

•

Establish and periodically review policies concerning perquisite benefits;

 

•

Develop and recommend to the Board for approval a CEO and executive officer succession plan; and

 

•

Prepare an annual Compensation Committee report and take such other actions as are necessary and consistent with respect to the Company’s public disclosures, governing law and the Company’s organizational documents.

Recent representative discussion topics of the Compensation Committee included:

 

•

Corporate goals and objectives relevant to the compensation of the CEO and other executive management and consideration of long term stockholder value.

 

•

The evaluation of compensation performance goals and incentive plan structure and related impact on risk taking by senior executives and employees.

 

•

Policies designed to foster alignment between management and our stockholders.

 

•

Consideration of the appropriate peer group for compensation and talent acquisition purposes.

 

•

The Company’s severance plans and appropriate adjustments thereto.

 

•

Director Compensation.

We have elected to avail ourselves of the “controlled company” exception under the NYSE rules, which exempts us from the requirement that we have a Compensation Committee comprised entirely of independent directors.

Nominating and Corporate Governance Committee

 

 

Our Board of Directors established a Nominating and Corporate Governance Committee. In fiscal 2021, the Nominating and Corporate Governance Committee held two meetings. Our Nominating and Corporate Governance Committee consists of Messrs. Becker (Chair), Press, and DeVries. The principal duties and responsibilities of the Nominating and Corporate Governance Committee include the following:

 

•

To identify candidates qualified to become directors of the Company, consistent with criteria approved by our Board of Directors;

 

		2022 PROXY STATEMENT		13

CORPORATE GOVERNANCE

 

 

 

•

To recommend to our Board of Directors nominees for election as directors at the next annual meeting of stockholders or a special meeting of stockholders at which directors are to be elected, as well as to recommend directors to serve on the committees of the Board of Directors;

 

•

To recommend to our Board of Directors candidates to fill vacancies and newly created directorships on the Board of Directors;

 

•

To review stockholder proposals affecting corporate governance and to make recommendations to the Board accordingly;

 

•

To identify best practices and recommend corporate governance principles, including giving proper attention and making effective responses to stockholder concerns regarding corporate governance;

 

•

To develop, review, and assess the adequacy of our corporate governance principles and guidelines periodically and recommend to our Board of Directors any changes deemed appropriate; and

 

•

To oversee the evaluation of our Board of Directors and its committees.

Recent representative discussion topics of the Nominating and Corporate Governance Committee included:

 

•

Review of certain governance matters, such as the continued adequacy of the Board of Directors’ Governance Principles.

 

•

Assessment of the effectiveness of the Board of Directors and committees of the Board of Directors in providing proper governance and oversight.

 

•

Review of regulatory and legislative developments impacting the Company and industry.

We have elected to avail ourselves of the “controlled company” exception under the NYSE rules, which exempts us from the requirement that we have a Nominating and Corporate Governance Committee comprised entirely of independent directors.

Compensation Committee Interlocks and Insider Participation

 

 

Members of the Compensation Committee during 2021 included Mr. Andrew Africk, who advised the Company in April 2022 that he will be retiring from the Board immediately after the Annual Meeting, and Messrs. Becker and Rayman. None of the members of the Compensation Committee in 2021 were, at any time during 2021 or at any other time, an officer or employee of the Company.

None of our executive officers has served as a member of the Board of Directors, or as a member of the compensation or similar committee, of any entity that has one or more executive officers who served on our Board of Directors or Compensation Committee during 2021.

Except as described in the section entitled “Certain Relationships and Related Person Transactions” below, none of the members of the Compensation Committee had or has any relationships with us that are required to be disclosed under Item 404 of Regulation S-K.

Identifying and Evaluating Candidates for the Board of Directors

 

 

In considering possible candidates to serve on the Board of Directors, the Nominating and Corporate Governance Committee will take into account all appropriate qualifications, qualities and skills in the context of the current make-up of the Board of Directors and will consider the entirety of each candidate’s credentials, including, among other things, their individual background, experience and knowledge. In addition, the Nominating and Corporate Governance Committee will evaluate each nominee according to the following criteria:

 

•

Nominees should have a reputation for integrity, honesty and adherence to high ethical standards;

 

•

Nominees should have demonstrated business acumen, experience and ability to exercise sound judgments in matters that relate to the current and long-term objectives of the Company, and should be willing and able to contribute positively to the decision-making process of the Company;

 

14		2022 PROXY STATEMENT

CORPORATE GOVERNANCE

 

 

 

•

Nominees should have a commitment to understand the Company and its industry and to regularly attend and participate in meetings of the Board of Directors and its committees;

 

•

Nominees should have the interest and ability to understand the sometimes conflicting interests of the various constituencies of the Company, which include stockholders, employees, customers, governmental units, creditors and the general public, and to act in the interests of all stockholders;

 

•

Nominees should not have, nor appear to have, a conflict of interest that would impair the nominee’s ability to represent the interests of all the Company’s stockholders and to fulfill the responsibilities of a director; and

 

•

Nominees shall not be discriminated against on the basis of race, religion, national origin, sex, gender identity, sexual orientation, age, disability, political affiliation or any other basis proscribed by law. The value of diversity on the Board of Directors should be considered.

In addition, our Board Governance Principles address over-boarding and in order to provide sufficient time for informed participation in their Board responsibilities, any non-management director who is employed as an executive officer, including as a CEO, of a publicly traded company is required to limit his or her external directorships of other public companies to one; any non-management director who is not fully employed is required to limit his or her external directorships of other public companies to three; and our CEO is required to limit his service on public company boards to no more than two. The Nominating and Corporate Governance Committee is notified of the intention of directors or our CEO to serve on another for-profit (public or private) company board of directors, and the committee reviews the possibility for conflicts of interest or time constraints and may object to such placement in which event the full Board shall determine the disposition of the matter.

Stockholders may recommend director candidates for consideration by the Nominating and Corporate Governance Committee. To have a candidate considered by the Nominating and Corporate Governance Committee, a stockholder must submit the recommendation in writing and must include the following information:

 

•

The name and address of the stockholder, as they appear on the Company’s books and records, and evidence of the stockholder’s ownership of Company stock, including the class or series and number of shares owned and the length of time of ownership;

 

•

A description of all arrangements or understandings between the stockholder and each candidate pursuant to which the nomination is being made;

 

•

The name of the candidate, the candidate’s resume or a listing of his or her qualifications to be a director of the Company and the person’s consent to be named as a director if nominated by the Board of Directors; and

 

•

Such other information regarding each proposed candidate required under the bylaws of the Company and as would be required to be included in a proxy statement under the rules of the SEC if such candidate had been nominated by the Board of Directors.

Each such recommendation must be sent to the Secretary of the Company at ADT Inc., 1501 Yamato Road, Boca Raton, FL 33431 and must be received within the time indicated below under “When are stockholder proposals due for consideration at next year’s annual meeting?” The Nominating and Corporate Governance Committee will evaluate stockholder recommended director candidates in the same manner as it evaluates director candidates identified by other means.

Corporate Governance Guidelines

 

 

Our Board of Directors has adopted a code of business conduct and ethics that applies to all of our directors, officers, and employees, and is intended to comply with the relevant listing requirements for a code of conduct as well as qualify as a “code of ethics” as defined by the rules of the SEC. The code of business conduct and ethics contains general guidelines for conducting our business consistent with the highest standards of business ethics. The Company also maintains an ethics hotline as set forth in our code of business conduct and ethics so that any suspected violation of our code of business conduct and ethics can be reported confidentially, without fear of reprisal. We intend to disclose future amendments to

 

		2022 PROXY STATEMENT		15

CORPORATE GOVERNANCE

 

 

 

certain provisions of our code of business conduct and ethics, or waivers of such provisions applicable to any principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions, and our directors, on our website at https://investor.adt.com/. The code of business conduct and ethics is made available on our website.

We have Board Governance Principles that address significant issues of corporate governance and set forth procedures by which our managers and Board of Directors carry out their respective responsibilities. The principles are available for viewing on our website at https://investor.adt.com/. We will also provide the Board Governance Principles, free of charge, to stockholders who request them. Such requests should be directed to our Secretary at ADT Inc., 1501 Yamato Road, Boca Raton, FL 33431.

Environmental, Social and Governance Initiatives

 

 

We recognize the importance of corporate responsibility and have established the following ESG Commitment Statement which guides the integration of our ESG initiatives into our business:

Our commitment to respect the environment, promote social responsibility and lead with responsible

governance is fundamental to who we are and guides our safe, smart and sustainable business practices.

We have also tracked our ESG initiatives in internal annual and periodic reporting for several years, and in 2021 published to our website our 2020 Sustainability Accounting Standard’s Board (“SASB”) Index Report reflecting certain of our ESG initiatives. We have continued to include enhanced disclosure of our corporate ESG initiatives in our 2021 Annual Report on Form 10-K, and we will publish to our website during the second quarter of 2022 our 2021 Corporate ESG Report, which will include as an appendix our 2021 SASB Index Report. These reports can be found on our investor relations website at https://investor.adt.com/

Executive Sessions of Non-Management Directors

 

 

The non-management directors of the Company meet in executive sessions without management on a regular basis. Under the Company’s Board Governance Principles, the Chairman presides at such executive sessions (the “Presiding Director”). In the absence of the Presiding Director, the non-management directors will designate another director who is present to preside over such executive sessions.

Apollo Approval of Certain Matters and Rights to Nominate Certain Directors

 

 

As long as funds affiliated with or managed by Apollo beneficially own a majority of our outstanding common stock, Apollo will be able to control all matters requiring stockholder approval, including the election of directors, amendment of our certificate of incorporation, and certain corporate transactions. See “Certain Relationships and Related Person Transactions.”

Compensation Risk Assessment

 

 

We believe that the performance goals and incentive plan structures generally established under the Company’s executive, annual and long-term incentive programs would not contribute to excessive risk taking by our senior executives or employees. The approved goals under our incentive programs are consistent with our financial operating plans and strategies, and these programs are discussed and reviewed by the Compensation Committee. The Company’s compensation systems are balanced, rewarding both short-term and long-term performance, and its performance goals are team-oriented, with an individual component, and include measurable factors and objective criteria. The Compensation Committee is actively engaged in setting compensation systems, monitoring those systems during the year and using discretion in making rewards, as necessary. As a result of the procedures and practices described above, the Compensation Committee believes that the Company’s compensation policies and practices for its employees do not encourage risk-taking that is reasonably likely to have a material adverse effect on the Company. This conclusion is based on a risk assessment that was performed by management in conjunction with Pearl Meyer and presented to and reviewed with the Compensation Committee at its October 2021 meeting.

 

16		2022 PROXY STATEMENT

CORPORATE GOVERNANCE

 

 

 

Communications with the Board of Directors

 

 

Stockholders and other interested parties desiring to communicate directly with the full Board of Directors, the Audit Committee, the non-management directors as a group or with any individual director or directors may do so by sending such communication in writing, addressed to the attention of the intended recipient(s), c/o Secretary, ADT Inc., 1501 Yamato Road, Boca Raton, FL 33431. The Company also maintains an ethics hotline where any suspected violation of our code of business conduct and ethics can be reported confidentially. More information about the hotline can be found at https://investor.adt.com under the Governance tab. Interested parties may communicate anonymously and/or confidentially if they desire. All communications received that relate to accounting, internal accounting controls or auditing matters will be referred to the chairman of the Audit Committee unless the communication is otherwise addressed. All other communications received will be forwarded to the appropriate director or directors.

Director Attendance at Annual Meeting

 

 

The Company encourages all of our directors to attend each Annual Meeting of Stockholders. Eleven of our directors attended the 2021 Annual Meeting of Stockholders either remotely or in person.

 

		2022 PROXY STATEMENT		17

EXECUTIVE OFFICERS

 

 

 

EXECUTIVE OFFICERS

The names of the current executive officers of the Company (and their respective ages as of the date of this proxy statement) are set forth below. Each of our executive officers is re-elected annually by our Board of Directors.

 

Name		Age		Position
James D. DeVries		59		President and Chief Executive Officer and Director
Jeffrey A. Likosar		51		Chief Financial Officer and President, Corporate Development
Daniel M. Bresingham		50		Executive Vice President, Commercial
Harriet K. Harty		55		Executive Vice President and Chief Administrative Officer
Keith F. Holmes		54		Executive Vice President and Chief Revenue Officer
Marc Jones		47		Executive Vice President, Solar
David W. Smail		56		Executive Vice President, Chief Legal Officer and Secretary
Donald M. Young		57		Executive Vice President and Chief Operating Officer

James D. DeVries. For the biography of James D. DeVries, please see “Proposal 1—Election of Directors—Class I Directors.”

 

Jeffrey A. Likosar

 

Jeffrey A. Likosar is our Chief Financial Officer and President, Corporate Development. From March 2018 to April 2021 Mr. Likosar was our Executive Vice President, Chief Financial Officer and Treasurer, and from February 2017 to March 2018 Mr. Likosar was our Executive Vice President and Chief Financial Officer. Prior to joining the Company, from February 2014 to September 2016, Mr. Likosar served as CFO of Gardner Denver, a leading global provider of high-quality industrial equipment, technologies, and services to a broad and diverse customer base through a family of highly recognized brands. Mr. Likosar was responsible for all aspects of the financial function in this role. From November 2008 to February 2014, Mr. Likosar served in various capacities at Dell Inc., a privately owned multinational computer technology company, including as Chief Financial Officer, End User Computing and Operations, and Vice President of Financial Planning and Analysis and Acquisition Integration. Prior to joining Dell, Mr. Likosar spent most of his career at GE across the Appliances, Plastics, and Aviation Divisions. His roles included Chief Financial Officer of Resins (in GE’s Plastics Division) and Chief Financial Officer of Military Systems (in GE’s Aviation Division), in addition to various other roles in the Plastics and Appliances Divisions. Mr. Likosar began his career at GE Appliances as an analyst in the Financial Management Program and holds a bachelor’s degree in Business Administration from the Kenan-Flagler Business School at the University of North Carolina at Chapel.

 

Daniel M. Bresingham

 

Daniel M. Bresingham is our Executive Vice President, Commercial. Previously, Mr. Bresingham served as our Executive Vice President and Chief Administrative Officer from March 2018 to December 2018. From September 2017 to March 2018 Mr. Bresingham was our Executive Vice President, Chief Administrative Officer and Treasurer, and from April 2016 to September 2017, Mr. Bresingham was our Treasurer and Assistant Secretary. Prior to that, Mr. Bresingham served as Chief Financial Officer of Prime Security Services Borrower, LLC, a subsidiary of the Company, from July 2015 to October 2016. From April 2010 to June 2015, Mr. Bresingham served as the Chief Financial Officer of Protection One. Prior to joining the Company, Mr. Bresingham served as Chief Financial Officer of Stanley Convergent Security Solutions from January 2007 through April 2010 and was the Controller of HSM Electronic Protection Services from November 2004 to January 2007. Mr. Bresingham also has senior management experience in the telecommunications industry and public accounting experience from his time at Arthur Andersen and PwC. Mr. Bresingham holds a bachelor’s degree in Accounting from the University of Illinois at Urbana-Champaign and an MBA from the University of Chicago.

 

18		2022 PROXY STATEMENT

EXECUTIVE OFFICERS

 

 

 

Harriet K. Harty

 

Harriet K. Harty is our Executive Vice President and Chief Administrative Officer. Ms. Harty was our Senior Vice President and Chief Administrative Officer from July 2020 to February 2022. Ms. Harty is a senior business executive with a strong combination of financial acumen, operational excellence and human resources expertise. Prior to joining ADT in July 2020, Ms. Harty served roughly 25 years at Allstate in various leadership roles, including as their Chief Human Resources Officer, and, just prior to ADT, served as the Executive Vice President and Chief Human Resources Officer at Sompo International. Ms. Harty also serves as an advisory board member for After School Matters and has served as a Board Member for Women Employed. She earned a Master of Business Administration in Marketing from the University of Illinois at Chicago and a Bachelor of Science in Accountancy from Northeastern Illinois University in Chicago. She is also a Certified Public Accountant.

 

Keith F. Holmes

 

Keith F. Holmes is our Executive Vice President and Chief Revenue Officer as of May 2021. Mr. Holmes previously served as Executive Vice President, Head of Cox Business at Cox Communications, Inc. (“Cox”), where he was responsible for driving the strategic direction of the high-growth division and overseeing all financial, sales, operations, product development and marketing for business customers, including wholesale services for telecom carriers, security solutions and new business ventures. At Cox, Mr. Holmes also had the roles of Senior Vice President – Head of Residential Sales and Senior Vice President – Field Sales, since 2017 and 2014, respectively. Mr. Holmes was also a Vice President at AT&T Mobility. Mr. Holmes has spent over 30 years in the communications industry. Mr. Holmes has a Master of Business Administration from the University of Alabama at Birmingham and a bachelor’s degree from Georgia Institute of Technology.

 

Marc Jones

 

Marc Jones is Executive Vice President, Solar. Mr. Jones joined ADT in December 2021 when ADT acquired Sunpro Solar, the company he founded and led since 2008. As a visionary leader in the renewable energy industry, Mr. Jones is passionate about building sustainable companies that make a difference. He was a recipient of the Ernst and Young’s Entrepreneur of the Year Award for the Gulf Coast Region in 2019. Under his leadership, Sunpro Solar was named second largest residential solar contractor in the U.S. by Solar Power World Magazine in 2021. Mr. Jones is a board member for the Gulf States Renewable Energy Industries Association (GSREIA). Before founding Sunpro, Mr. Jones worked as an accountant for Arthur Anderson. He is a U.S. Army veteran and received a bachelor’s degree in accounting from Southeastern Louisiana University.

 

		2022 PROXY STATEMENT		19

EXECUTIVE OFFICERS

 

 

 

David W. Smail

 

David W. Smail is our Executive Vice President, Chief Legal Officer and Secretary. Prior to joining the Company, from August 2015 to September 2018, Mr. Smail served as Executive Vice President & Chief Legal Officer for Scientific Games Corporation, a leading developer and provider of technology-based products, systems, platforms, and services for the global gaming and lottery industries. Prior to that he held the role of Executive Vice President & General Counsel at Morgans Hotel Group, an international hospitality company, and before that was Executive Vice President and Group General Counsel of global advertising and communications services business Havas S.A. He also was previously a partner in the international law firm Hogan Lovells (previously Hogan & Hartson). Mr. Smail holds a Bachelor of Arts degree, summa cum laude, in Biology and French from Macalester College, and a Juris Doctor degree, cum laude, from Harvard Law School.

 

Donald M. Young

 

Donald M. Young is our Executive Vice President and Chief Operating Officer. Previously Mr. Young was our Chief Information Officer and Executive Vice President, Field Operations from December 2018 to April 2021, and our Senior Vice President and Chief Information Officer from September 2017 to December 2018. Mr. Young served as the Chief Operating Officer and Chief Information Officer of Prime Security Services Borrower, LLC from July 2015 to May 2016, and for Protection One from June 2010 to July 2015. Mr. Young joined the alarm industry in 1988 after serving four years in the United States Air Force as a Computer Programmer Analyst. Since then, he has worked as Central Station Manager, Operations and General Manager, Corporate Director, Director of Call Center Operations, Vice President of Information Technology, Chief Information Officer and Chief Operating Officer. Mr. Young is currently President of The Monitoring Association (TMA) and past President of the Partnership for Priority Video Alarm Response (PPVAR). He is also an SSI Alarm Industry Hall of Fame member. Mr. Young holds an Associate of Science degree in Data Processing from the Community College of the Air Force and a Bachelor of Science degree in Information Technology Management from America Military University.

 

20		2022 PROXY STATEMENT

EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

EXECUTIVE COMPENSATION - COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis section of the proxy statement describes in detail the Company’s executive compensation philosophy and programs, as well as the compensation decisions made by the Compensation Committee and the factors which were considered in making those decisions. This Compensation Discussion and Analysis focuses on the compensation of our NEOs who, for fiscal year 2021, are listed below.

 

NAME		AGE		TITLE
James D. DeVries		59		President and Chief Executive Officer
Jeffrey A. Likosar		51		Chief Financial Officer and President, Corporate Development
Keith F. Holmes		54		Executive Vice President and Chief Revenue Officer
Daniel M. Bresingham		50		Executive Vice President, Commercial
Donald M. Young		57		Executive Vice President and Chief Operating Officer
James P. Boyce(1)		65		Former President, Chief Business Development Officer

 

(1)	Mr. Boyce’s employment with the Company ended on May 31, 2021, at which time he continued to consult with the Company, in an advisory capacity, on an as-needed basis, from June 1, 2021 through December 31, 2021.

Executive Compensation - Compensation Discussion and Analysis Table of Contents

 

 

 

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2021 Highlights

 

 

Our strong customer focus allowed us to deliver full year 2021 results in-line with or above our initial financial outlook while also investing in our foundation for long-term growth.

In our consumer and small business segment (“CSB”), we saw strong demand from our residential customers for our smart home and security solutions. For the full year, we grew our residential net subscribers as we capitalized on this strong demand environment. In addition to growing our subscriber base, more customers are choosing interactive smart home systems. Our strong customer focus and high customer satisfaction was represented in our gross attrition of 13.1% and a revenue payback period of 2.3 years, both relatively consistent year over year.

Full year gross recurring monthly revenue (“RMR”) additions totaled $60.9 million, bringing our end of period RMR balance to $359 million.

 

We also took several steps to expand our offerings beyond the home, and ultimately to better serve our customers. Our SoSecure mobile app was recognized by Time Magazine as one of the best inventions of 2021. Our SoSecure platform and the unrivaled safety provided by our monitoring service has allowed us to grow partnerships with leading brands like Lyft and DoorDash. We continued to build the framework in support of product launches and our long-term partnership with Google which is based on a shared vision for the future of the smart and helpful home and a steadfast commitment to our customers.

We also saw growth in our business from our Commercial segment and our Solar segment, a new addition to ADT after the acquisition of Sunpro Solar in December 2021. These businesses are producing solid revenue growth with lower capital intensity than our consumer and small business segment, helping improve top-line performance and cash generation.

Chief Executive Officer – Performance Goals

Mr. DeVries’ performance as President and CEO is evaluated using the following categories which are determined by the Compensation Committee: operating results, developing and implementing a long-term strategy, maintaining and motivating a high-performing team, and continued progress in building an inclusive culture through increased representation, recruitment, retention, and/or promotion of underrepresented groups.

In 2021 under Mr. DeVries’ leadership, ADT was able to deliver on its 2021 business objectives by meeting our financial commitments on Gross RMR Additions, Adjusted EBITDA, and Adjusted Free Cash Flow. With a focus on the long-term growth strategy of the Company, Mr. DeVries and his leadership team delivered a fundamentally transformed business by:

 

•

Creating a smart home business with best-in-class unit economics and compelling incremental subscriber returns;

 

•

Completing the concept evolution with respect to the Company’s partnership with Google, which is expected to serve as a growth accelerator;

 

•

Establishing a path to recovery for ADT Commercial with a record national account backlog as of year end 2021 and driving continued growth in the space;

 

•

Acquiring ADT Solar, which provides a significant opportunity for ADT to continue to expand its ecosystem and unlock significant upside in the high-growth solar space;

 

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•

Expanding security beyond the home through innovative offerings including the Google Nest Doorbell launch in 2022, the “Canopy” joint venture with Ford in 2022 and SoSecure, ADT’s award-winning personal safety app;

 

•

Creating substantial free cash flow that the Company can reinvest to drive stockholder value;

 

•

Producing the Company’s first Sustainable Accounting Standards Board (“SASB”)-aligned disclosure report in 2021; and

 

•

Leading innovation for the organization and receiving the following awards, accolades and recognition:

 

•

Customer Service – voted most trusted home security brand by American shoppers in the BrandSpark® Most Trusted Awards (2021);

 

•

Industry – CES® innovation awards honoree – Blue by ADT Smart Home Hub (2021); and

 

•

Mobile – TIME’s best inventions – SoSecure (2021); The Monitoring Association and Security Sales & Integration’s Monitoring Technology “Marvel” Award – SoSecure.

Executive Compensation Philosophy

The Company’s executive compensation program is guided by the following principles, which make up our executive compensation philosophy:

Pay for Performance. Compensation opportunities are designed to align executives’ pay with the Company’s performance, the impact of performance against individual objectives and a focus on producing sustainable long-term growth.

Attract, Promote, and Retain Talented Management Team. We compete for talent with other companies both smaller and larger, and both in our market and in other industries. To attract and retain executives with the experience necessary to achieve our business goals, compensation must be competitive and appropriately balanced between fixed compensation and at-risk compensation.

Align Management’s Interests with Interests of Stockholders. We believe that management should have a significant financial stake in the Company to align their interests with those of the stockholders and to encourage the creation of long-term value. Therefore, equity awards make up a substantial component of executive compensation.

To reflect these principles, our executive compensation program has three key elements: base salary, annual cash incentive compensation, and long-term equity compensation. We also provide limited perquisites and retirement benefits to our NEOs.

Prior to our initial public offering (“IPO”) in January 2018, each of Messrs. DeVries, Likosar, Bresingham and Young made a direct investment in Prime Security Services TopCo Parent, L.P. (“Prime TopCo LP”) and were granted profit interests under the operating agreement for Prime TopCo LP (the “LP Agreement”), subject to certain vesting conditions of which 50% are subject to performance-based vesting (based on the return achieved by our Sponsor) and the remaining 50% were subject to service-based vesting based on continued employment). Following our IPO, our executive compensation program has continued to have a significant equity compensation component, which aligns the interests of management with the stockholders and promotes a focus on long-term success. We have aimed to ensure that the base salary and target annual incentive levels of each NEO are competitive to retain and appropriately reward our NEOs for their ongoing service and achievements.

We believe that the design of our executive compensation program and our compensation practices support our compensation philosophy. Each year, our Compensation Committee evaluates our compensation philosophy and each of the elements of our compensation program, and may make adjustments or changes as it deems appropriate.

 

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				WHAT WE DO				WHAT WE DO NOT DO
We align executive compensation with the interests of the Company’s stockholders				Pay clearly aligned with performance
				Executive compensation program designed to ensure majority of value is at-risk
				Double-trigger change in control provisions for cash and equity awards
We designed the Company’s executive compensation program to avoid excessive risk and promote sustainable growth				Annual evaluation of risk in compensation programs to ensure mitigation of undue risk
				Mix of compensation components (fixed and variable pay, short- and long-term incentives) that encourage focus on both the short- and long-term interests of the Company and its stockholders
				Incentive awards with payouts based upon a variety of financial, operational and individual objectives, which minimizes the risk associated with any single performance measure
				Pay Recoupment Policy
We adhere to executive compensation best practices				Independent compensation consultant				No repricing of underwater stock options
				Reasonable post-employment/change in control provisions				No inclusion of the value of equity awards in severance calculations
				Limited perquisites				No excise tax gross-ups upon change in control
								No hedging, pledging or short sales of our stock is permitted by employees or directors

Process for Determining Executive Officer Compensation (Including NEOs)

 

 

Role of Compensation Committee and Board of Directors

Our Compensation Committee is responsible for, among other things, overseeing our overall compensation structure, policies and programs, including assessing whether our compensation structure results in appropriate compensation levels and incentives for executive management and employees, and for reviewing the performance of and approving the compensation awarded to our executive officers and other senior officers who are subject to the filing requirements of Section 16 of the Exchange Act. In addition, our Compensation Committee is responsible for the approval of equity awards to all of our employees, including grants made to our executive officers. Grants to our executive officers are ratified by the full Board of Directors, and the Board of Directors approves, pursuant to Rule 16b-3 of the Exchange Act, the exemption of such grants, acquisition of shares of our Common Stock upon settlement or exercise of such grants, and subsequent dispositions of such shares of our Common Stock from liability under Section 16(b) of the Exchange Act. In addition, the Compensation Committee reviews annually the corporate goals and objectives applicable to the compensation of our executive officers. The Compensation Committee also ratifies, from time to time, the authority of our CEO to approve equity grants to our employees who are not executive officers under our Policy and Procedures for Granting Equity-Based Awards, subject to certain other restrictions as set forth in such policy.

Role of Management

In making determinations with respect to executive compensation for executive officers, our Compensation Committee considers input from the CEO. The CEO provides insight to the Compensation Committee on specific decisions and recommendations related to the compensation of the executive officers other than himself. Our Compensation Committee believes that the input of the CEO with respect to the assessment of individual performance, succession planning, and retention is a key component of the process.

 

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Role of Independent Compensation Consultant

The Compensation Committee has the authority to retain, compensate, and terminate an independent compensation consultant and any other advisors necessary to assist in its evaluation of executive compensation.

The Board of Directors retained Pearl Meyer & Partners, LLC (“Pearl Meyer”), a compensation consulting firm, as its independent external advisor to assist in its evaluation of executive compensation, and to provide insight and market perspective on our current compensation programs. In selecting Pearl Meyer, the Board of Directors reviewed their independence, including the factors prescribed by the SEC, and concluded that there were no conflicts of interest that would preclude them from serving as an independent advisor to the Board. Pearl Meyer does not provide other services to us, except at the direction of our Board of Directors or Compensation Committee. We do not have any other relationships with Pearl Meyer.

Role of External Market Data

The Compensation Committee considers a number of factors in determining target total compensation for each of the Company’s executive officers (including our NEOs). These factors include, but are not limited to, position-specific market data, the executive’s experience and performance, and internal pay equity. While the Compensation Committee strives to generally target executive compensation at the median of the Company’s competitive market (including both selected peer companies and the broader competitive market) in the aggregate, it also applies discretion based upon its review of the factors noted above to make individual compensation decisions for the Company’s executive officers. In addition, the Compensation Committee may target above-median market compensation for specific individuals for a variety of reasons, including, but not limited to:

 

•

specific organizational considerations, for example, because the role is considered critical to delivering on our overall business strategy;

 

•

the need for specific expertise in building new or improving upon existing business functions, particularly in the process of hiring candidates from external sources; and

 

•

the retention of key executives the Company believes are critical to its success.

Similarly, the Compensation Committee may target below-median compensation if individuals are new in their roles or are performing a role that is narrower than what is typical in the market.

Peer Group Development

The Compensation Committee, with the assistance of Pearl Meyer, has developed a peer group for use in making compensation decisions. While the Compensation Committee considers the executive compensation data at peer group companies, it is not the sole factor in the decision-making process. The Compensation Committee also considers general industry data from third-party providers in its review of compensation for our executive officers (including our NEOs). Neither the Compensation Committee nor management has any input into the companies included in these general industry surveys. The table below highlights how the companies included in the peer group were chosen, and how the compensation information related to these companies is used.

 

How Peer Group Companies are Selected		How Peer Group Data is Utilized
•  Similar or related industry sector •  Generally focused on business models that generate subscription-based recurring revenue •  Provide a technology-enabled service •  Primarily business-to-consumer (B2C) focused, although companies that are business-to-business (B2B) focused are also considered •  Generally between $2 billion and $10 billion in revenue		•  As an input in determining base salaries, annual incentive targets and long-term incentive award targets •  As an input in the design of compensation plans •  To validate whether our executive compensation program is aligned with Company performance •  To benchmark the form and mix of equity awards granted to our employees

 

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The Compensation Committee will review the peer group periodically to determine whether any significant changes to the business conditions of the Company or any of its peers would warrant any changes to the peer group. In October 2021, the Compensation Committee approved changes for the 2022 peer group increasing the sample size from 12 to 16 companies with a greater emphasis on technology focused companies with high prevalence across all key business model criteria.

 

2021 Peer Group		Updates for 2022		2022 Peer Group
The Brink’s Company		Spotify Technology S.A.		Akamai Technologies, Inc.
Cintas Corporation		Expedia Group, Inc.		The Brink’s Company
Equifax Inc.		Twitter, Inc.		Cintas Corporation
Expedia Group, Inc.		New: Akamai Technologies, Inc.		Equifax Inc.
H&R Block, Inc.		New: Frontier Communications Parent		Frontier Communications Parent
Republic Services, Inc.		New: NCR Corporation		H&R Block, Inc.
Rollins, Inc.		New: NetApp, Inc.		NCR Corporation
Sirius XM Holdings Inc.		New: Rockwell Automation, Inc. A		NetApp, Inc.
Spotify Technology S.A.		New: Trimble Inc.		Republic Services, Inc.
Telephone and Data Systems, Inc.		New: VMware, Inc.		Rockwell Automation, Inc.
Terminix Global Holdings, Inc				Rollins, Inc.
Twitter, Inc.				Sirius XM Holdings Inc.
				Telephone and Data Systems, Inc.
				Terminix Global Holdings, Inc
				Trimble Inc.
				VMware, Inc.

2021 Advisory Vote on Executive Compensation

 

 

At our 2021 Annual Meeting, over 99% of the shares voted were cast in favor of our advisory vote to approve the compensation of our NEOs.

We recognize that the business and executive compensation environments continue to evolve, and we are committed to having compensation programs and practices that support our business objectives, promote good corporate governance, and align executive pay with the Company’s performance. The compensation committee will continue to consider the results from this year’s and future advisory stockholder votes regarding our executive compensation programs. See “Proposal 2—Advisory Vote to Approve the Compensation of our Named Executive Officers” for additional information.

Elements of Executive Compensation

 

 

The Company’s total direct compensation program consists of three main elements: base salary, annual cash incentives, and equity-based long-term incentives. A significant majority of our NEOs’ total direct compensation is performance-based and at-risk. The Company also provides various benefit and retirement programs, as well as an annual executive physical for our NEOs (and executive officers). The table below provides an overview of the elements of the Company’s executive compensation program, a brief description of each compensation element, and the reason for inclusion in the executive compensation program.

 

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COMPENSATION DASHBOARD

Fiscal Year 2021

Annual Total Direct Compensation

 

 

Other Elements of Compensation

 

Benefits				Retirement Programs				Perquisites
•  To promote the health, wellness, and well-being of executives   •  Includes medical, dental, and disability plans   •  The NEOs are eligible to participate in the same benefit plans applicable to the Company’s employee population as a whole				•  The NEOs generally are eligible to participate in the same basic retirement plan available to the Company’s non-union employee population as a whole   •  Includes both a retirement savings plan and a deferred compensation plan				•  The Company generally believes that providing perquisites to our executives that are not provided to the employee population as a whole is not aligned with stockholder interests and best practices   •  As a limited exception, our CEO is provided reimbursement of certain travel and housing expenses on a grossed-up for taxes basis each calendar year and certain executives, including the NEOs, are eligible to receive an annual physical examination at the Company’s expense   •  Additional detail can be found in this section under the heading “Executive Benefits and Limited Perquisites.”

 

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Base Salary

 

 

Each NEO is party to an employment agreement or offer letter that provides for a fixed base salary, subject to annual review. Base salaries may be increased, but may not be decreased. The Compensation Committee reviews base salary levels on an annual basis to determine whether the base salary level is appropriate given the NEO’s job responsibilities, experience, value to the Company, and market pay level. Base salary levels are determined by taking into consideration all elements of compensation as a whole, and are based on individual position, experience, and competitive market base salaries for similar positions.

In February 2021, the Compensation Committee approved base salary increases, effective March 28, 2021, as shown in the table below.

The following are the actual base salaries for each NEO as of December 31, 2020 and 2021, respectively (actual salary paid in respect of 2021 appears in the Summary Compensation Table).

 

Name		Base Salary December 31, 2020				Base Salary December 31, 2021				Increase %
James D. DeVries		$	1,025,000			$	1,050,000				2.4%
Jeffrey A. Likosar		$	666,250			$	682,906				2.5%
Daniel M. Bresingham		$	533,000			$	546,325				2.5%
Keith F. Holmes(i)		$	—			$	600,000				(i	)
Donald M. Young		$	533,000			$	546,325				2.5%
James P. Boyce(ii)		$	655,000			$	—				(ii	)

 

(i)	Mr. Holmes began his employment with the company on May 28, 2021.

 

(ii)	Mr. Boyce’s employment with the Company ended on May 31, 2021, at which time he continued to consult with the Company in an advisory capacity, on an as-needed basis from June 1, 2021 through December 31, 2021.

Annual Incentive Compensation

 

 

The second component of executive officer compensation is an annual cash incentive based on the Company’s performance. Tying a portion of total compensation to annual Company performance permits us to adjust the performance metrics each year to reflect changing objectives and to emphasize those that may be of special importance for a particular year. Through the annual incentive program, we seek to provide an appropriate amount of short-term cash compensation that is at-risk and tied to the achievement of certain short-term performance goals.

For 2021, the target bonus opportunities for our NEOs were as follows:

 

Name		Target Bonus    % of Base Salary
James D. DeVries		125%
Jeffrey A. Likosar		100%
Daniel M. Bresingham		100%
Keith F. Holmes		100%
Donald M. Young		100%
James P. Boyce		100%

 

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For the 2021 fiscal year, the annual incentive plan (the “2021 AIP”) was approved with a design that reflects the Company’s focus as a primarily subscriber-based business with significant RMR. The metrics utilized in the 2021 AIP were selected to drive results in those categories that we believed would have the most significant impact on the success of our subscriber-based business. The metrics utilized for the 2021 fiscal year, as well as the respective weightings for each metric, are set forth below.

 

Performance Metric		Weighting				Target				Actual Performance(c)				Performance as a % of Target				Weighted Average Payout
Adjusted EBITDA excluding Solar ($Millions)(a)			50	%		$	2,150			$	2,207				102.7	%			78.5	%
Gross RMR Additions (excluding wholesale) ($Millions)(b)			50	%		$	61.7			$	60.9				98.7	%			47.1	%
TOTAL																			125.6	%

 

(a)

We define Adjusted EBITDA as net income or loss adjusted for (i) interest; (ii) taxes; (iii) depreciation and amortization, including depreciation of subscriber system assets and other fixed assets and amortization of dealer and other intangible assets; (iv) amortization of deferred costs and deferred revenue associated with subscriber acquisitions; (v) share-based compensation expense; (vi) merger, restructuring, integration, and other; (vii) losses on extinguishment of debt; (viii) radio conversion costs, net; and (ix) other income/gain or expense/loss items such as impairment charges, financing and consent fees, or acquisition-related adjustments.

 

(b)	RMR that was added during the period from contractual recurring fees for monitoring and other recurring services provided to our customers, excluding contracts monitored but not owned.

 

(c)	The Actual Performance indicated in the table is based on 2021 performance excluding the acquisition of Sunpro Solar, which was acquired on December 8, 2021.

The following table summarizes the calculation of bonuses for fiscal year 2021 paid to each of the NEOs.

 

Name		Base Salary				Bonus Target %		Bonus Target				Business Performance		Actual Bonus Paid for Fiscal Year 2021
James D. DeVries		$	1,050,000			125%		$	1,312,500			125.6%		$	1,648,500
Jeffrey A. Likosar		$	682,906			100%		$	682,906			125.6%		$	857,730
Daniel M. Bresingham		$	546,325			100%		$	546,325			125.6%		$	686,184
Keith F. Holmes(1)		$	600,000			100%		$	600,000			125.6%		$	753,600
Donald M. Young		$	546,325			100%		$	546,325			125.6%		$	686,184
James P. Boyce(2)		$	655,000			100%		$	655,000			125.6%		$	340,342

 

(1)

Mr. Holmes has served as our Executive Vice President and Chief Revenue Officer since May 28, 2021. In accordance with his offer letter, his 2021 AIP incentive award was based on the full calendar year results. The actual bonus payment is based on the actual level of achievement of the applicable performance goals for the year.

 

(2)

Mr. Boyce served as our President, Chief Business Development Officer until his separation from the Company on May 31, 2021, at which time he continued to consult with Company in an advisory capacity, on an as-needed basis from June 1, 2021 through December 31, 2021. In accordance with the terms of the Annual Incentive Plan his 2021 AIP award target was based on the number of days worked during the performance period. The actual bonus payment is based on the actual level of achievement of the applicable performance goals for the year and his individual performance until his separation from the Company.

Non-GAAP Measures – Adjusted EBITDA

 

 

We believe the presentation of Adjusted EBITDA is useful as it provides investors additional information about our operating profitability adjusted for certain non-cash items, non-routine items we do not expect to continue at the same level in the future, as well as other items not core to our operations. Further, we believe Adjusted EBITDA provides a meaningful measure of operating profitability because we use it for evaluating our business performance, making budgeting decisions, and comparing our performance against other peer companies using similar measures.

We define Adjusted EBITDA as net income or loss adjusted for (i) interest; (ii) taxes; (iii) depreciation and amortization, including depreciation of subscriber system assets and other fixed assets and amortization of dealer and other intangible assets; (iv) amortization of deferred costs and deferred revenue associated with subscriber acquisitions; (v) share-based

 

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compensation expense; (vi) merger, restructuring, integration, and other; (vii) losses on extinguishment of debt; (viii) radio conversion costs, net; and (ix) other income/gain or expense/loss items such as impairment charges, financing and consent fees, or acquisition-related adjustments.

There are material limitations to using Adjusted EBITDA. Adjusted EBITDA does not take into account certain significant items, including depreciation and amortization, interest, taxes, and other adjustments which directly affect our net income or loss. These limitations are best addressed by considering the economic effects of the excluded items independently and by considering Adjusted EBITDA in conjunction with net income or loss as calculated in accordance with GAAP.

A reconciliation of Adjusted EBITDA as used in our 2021 AIP to its most comparable GAAP metric is included in this proxy statement as Exhibit A.

Long-Term Equity Compensation

 

 

The Company’s long-term incentive compensation program is designed to provide a significant portion of our executives’ compensation opportunity in equity-based instruments. We believe that long-term equity compensation is important to ensure that the interests of our executives are aligned with those of our stockholders, thus promoting value-creation for our executives and our stockholders. The annual equity award grant process occurs in conjunction with our annual assessment of individual performance and potential and takes into account the competitive compensation landscape. In addition to annual grants, the Company may make equity grants in certain other circumstances, such as for new hires or promotions, or to recognize an individual’s extraordinary contributions to the Company.

Our Board of Directors adopted, and our stockholders approved, our 2018 Omnibus Incentive Plan (as amended, the “Omnibus Incentive Plan”), pursuant to which we are permitted to grant awards of non-qualified stock options, incentive (qualified) stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), and other stock-based awards as permitted under the Omnibus Incentive Plan. The Omnibus Incentive Plan is designed to align the interests of our management team with our stockholders.

2021 Long-Term Incentive Plan Equity Awards

 

 

For fiscal year 2021, awards of equity under our annual long-term incentive program (the “2021 LTIP”) were delivered to employees in the form of RSUs. The following table describes the general terms and conditions applicable to awards under our 2021 LTIP:

 

Grant Type		Vesting		Other Terms & Conditions
RSUs		Generally, one-third per year, subject to continued employment through each applicable vesting date.		Accumulate dividend equivalent units with respect to dividends, which vest in accordance with the vesting of the underlying RSU award.

 

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Target 2021 long-term incentive opportunities for Messrs. DeVries, Likosar, Bresingham and Young, were approved in early 2021. Mr. Holmes’ 2021 long-term incentive opportunity was set forth in his offer letter when he was hired in May 2021. No long term incentive awards were granted to Mr. Boyce in 2021. Prior to the approval of the 2021 long-term incentive opportunities for our NEOs, the Compensation Committee reviewed and determined that the amounts remain market competitive. Target 2021 long-term incentive opportunities and the number of RSUs awarded to our NEOs are set forth in the table below:

 

Name		Aggregate Value of 2021 LTI Award				RSUs Awarded (#)
James D. DeVries		$	4,612,500				595,930
Jeffrey A. Likosar		$	1,000,000				129,198
Daniel M. Bresingham		$	600,000				77,519
Keith F. Holmes(1)		$	3,300,000				303,030
Donald M. Young		$	600,000				77,519

 

(1)

The 2021 target long-term incentive opportunity for Mr. Holmes reflects his sign-on equity award opportunity. Further details of Mr. Holmes’ sign-on equity award are described following the tabular disclosure below under the headings "—Employment Arrangements" and “—Potential Payments upon Termination or Change in Control.”

Employment Arrangements

 

 

Each of our NEOs is party to an employment agreement or offer letter with one of our operating subsidiaries, which specifies the terms of the executive’s employment, including certain compensation levels, and is intended to assure us of the executive’s continued employment and to provide stability in our senior management team. In addition to the terms of these employment arrangements described under the heading “—Employment Arrangements” which follows the Summary Compensation Table below, the employment agreement or offer letter provides for certain severance payments and benefits following a termination of employment under certain circumstances. For details on the severance payments and benefits payable to each of our NEOs, see “—Potential Payments upon Termination or Change in Control.”

Supplemental Savings and Retirement Plan

 

 

All of our NEOs are eligible to participate in the ADT Supplemental Savings and Retirement Plan (the “SSRP”), a deferred compensation plan that permits the elective deferral of base salary and annual performance-based bonus for executives in certain career bands. The SSRP provides eligible employees the opportunity to:

 

•

contribute retirement savings in addition to amounts permitted under the ADT Retirement Savings and Investment Plan (the “RSIP”);

 

•

defer compensation on a tax-deferred basis and receive tax-deferred market-based growth; and

 

•

receive any Company contributions that were reduced under the RSIP due to Internal Revenue Service (“IRS”) compensation limits.

Executive Benefits and Limited Perquisites

 

 

The Company’s executive officers, including the NEOs, are eligible to participate in the benefit plans that are available to substantially all of the Company’s employees, including defined contribution savings plans (e.g., the RSIP), medical, dental and life insurance plans and long-term disability plans, as well as discounts on the services we provide. Additionally, the Company provides relocation benefits when a move is required. None of the NEOs participate in a defined benefit pension plan.

 

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EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

We provide limited perquisites to our NEOs, including an annual executive physical for all of our NEOs. Mr. DeVries is also entitled to reimbursement for certain personal housing expenses and certain work-related travel expenses that, in each case, do not qualify as reimbursable business-related expenses, up to an annual maximum of $75,000 and an additional income tax gross-up payment related to such actual taxable reimbursements incurred.

Severance Benefits

 

 

Other than Messrs. DeVries, Likosar, Bresingham and Young, certain of our executive officers, including Mr. Holmes, may be eligible for certain benefits under either The ADT Inc. Severance Plan for U.S. Officers and Executives (the “Severance Plan”) or The ADT Corporation Change in Control Severance Plan (the “CIC Severance Plan”), depending upon the circumstances leading to their termination of service or employment with the Company. In the case of the CIC Severance Plan, a “double trigger” is required (i.e., a change in control, plus a qualifying termination of employment) before benefits become available to the executives covered by that plan. We believe that the benefits available to executives under this plan are equitable in comparison to the broader market. Details with respect to the key provisions of the severance plans currently in effect and the payments and benefits that would be payable under the plans are set forth in the section titled “—Potential Payments Upon Termination or Change in Control” below.

Pursuant to the terms of his offer letter, Mr. Boyce was entitled to receive severance payments and benefits under the Defenders Executive Change in Control Severance Plan (the “Defenders Severance Plan”), a plan we acquired in connection with our acquisition of Defenders, LLC. Upon Mr. Boyce’s retirement from the Company on May 31, 2021, which was deemed by the Company to be a termination without cause for purposes of the Defenders Severance Plan, he was provided payments and benefits under the Defenders Severance Plan.

Severance for our other NEOs is pursuant to the terms of their respective employment agreements. Details with respect to the payments and benefits that would be payable under the plans or under the employment agreements to each of our NEOs, as applicable, are set forth in the section titled “—Potential Payments upon Termination or Change in Control” below.

Other Compensation Policies and Practices

 

 

Insider Trading Policy and Equity Transaction Pre-Approval

The Company maintains an insider trading policy, applicable to all employees and directors, which prohibits the Company’s personnel from: (i) buying, selling, donating, or engaging in transactions in the Company’s securities at any time while aware of material non-public information about the Company; (ii) buying or selling securities of other companies at any time while aware of material non-public information about those companies that they become aware of as a result of business dealings between the Company and those companies; (iii) recommending to another person that they buy, hold, or sell Company securities; or (iv) disclosing material non-public information to any unauthorized persons outside the Company. Each of the Company’s directors and Section 16 Officers, as well as any member of management who reports directly to the CEO, is required to receive the approval of the Company’s Chief Legal Officer prior to entering into any transaction in Company securities. This approval applies to each of our NEOs. Generally, trading by our directors, the Executive Officers, and a limited group of other Company employees is permitted only during announced “open window” trading periods that follow the public release of the Company’s quarterly earnings. Those who are subject to these trading restrictions, including the NEOs, may enter into a trading plan under Rule 10b5-1 of the Exchange Act. These trading plans may be entered into only during an open window and must be approved by the Company’s Chief Legal Officer. The Company intends for trading plans to include a minimum 30-day “cooling off” period before the plan becomes effective, and the trading plans may not be amended during their term. Directors and employees, including the NEOs, bear full responsibility for any violation of the Company’s insider trading policy.

Anti-Hedging and Short Sale Policy

The insider trading policy maintained by the Company contains a provision which specifically prohibits all Company personnel from engaging in hedging transactions, including buying and selling puts, calls, options or other derivatives in respect of the Company’s securities. The insider trading policy prohibits all Company personnel from selling Company securities short.

 

32		2022 PROXY STATEMENT

EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

Anti-Pledging/Purchases of Company Securities on Margin

The insider trading policy maintained by the Company contains a provision which specifically prohibits all Company personnel from pledging Company securities or purchasing Company securities on margin, provided pledges existing at the time such prohibition was established in July 2021 were permitted to remain in existence.

Equity Grant Practices

The Company’s practice is to grant annual equity awards to eligible employees on or after the second trading day after financial and other information about the Company has been widely released through a press release, newswire or periodic report filed with the SEC. This timing ensures that annual equity grants are made at a time when the market has the greatest amount of information concerning the Company’s performance, including its financial condition and results of operations, as is reasonably possible. All other equity grants during the year, which are generally comprised of new hire awards or other one-time grants, are made in conjunction with the Company’s Policy and Procedures for Granting Equity-Based Awards.

Pay Recoupment (Clawback) Policy

To encourage sound financial reporting and increase individual accountability, the Company’s pay recoupment policy provides that, in addition to any other remedies available to it and subject to applicable law, the Company may recover any incentive compensation (whether in the form of cash or equity) paid by the Company to any current or former executive officer that resulted from any restatement of the reported financial results of the Company or one of its segments, if any, due to material non-compliance with financial reporting requirements (unless due to a change in accounting policy or applicable law) caused or contributed to by such individual’s fraud, willful misconduct or gross negligence. Our Compensation Committee has the sole discretion to make any and all determinations under this policy and will periodically review this policy to determine whether any changes are warranted.

Stock Ownership Guidelines

 

 

The Company’s stock ownership guidelines help further align the long-term interests of our independent directors and our management with the long-term interests of our stockholders. For purposes of determining an executive’s compliance with the guidelines, shares that count toward compliance are actual shares owned and unvested time-based RSUs. No stock options or unearned performance shares count toward guideline achievement. Under these guidelines, certain individuals are required to own a multiple in value of their equity to their annual base salary or, in the case of our independent directors, their annual cash retainer, before they can sell any of their shares of Common Stock as follows:

 

Position		Multiple of Annual Base Salary or Annual Cash Retainer
CEO		6x
CFO		3x
Executive Officers and CEO Management Direct Reports		2x
CEO Designees		2x
Independent Directors		5x

Tax and Accounting Considerations

 

 

Section 162(m) of the Code

For income tax purposes, public companies may not deduct any portion of compensation that is in excess of $1 million paid in a taxable year to certain “covered employees,” including our NEOs, under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). Once an individual becomes a “covered employee” under Section 162(m) of the Code, all current and future compensation to these individuals will remain subject to the limitation under Section 162(m) of the Code.

Section 162(m) of the Code provided a transition relief period exception, which will lapse in 2022, pursuant to which the deduction limit under Section 162(m) of the Code does not apply to certain compensation paid (or, in some cases, granted)

 

		2022 PROXY STATEMENT		33

EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

pursuant to a plan or agreement that existed during the period in which the corporation was not publicly held, subject to certain requirements and limitations.

These tax effects are only one factor considered by our Compensation Committee when entering into compensation arrangements. Our Compensation Committee believes that it should not be constrained by the requirements of Section 162(m) of the Code if those requirements would impair flexibility in compensating our NEOs in a manner that can best promote our corporate objectives. We intend to continue to compensate our executive officers in a manner consistent with the best interests of our stockholders and reserve the right to award compensation that may not be deductible under Section 162(m) of the Code where the Company believes it is appropriate to do so.

Section 280G of the Code

Section 280G of the Code disallows a tax deduction with respect to certain payments to executives of companies that undergo a change in control, and Section 4999 of the Code imposes a 20% penalty on the individual receiving “excess parachute payments.” Generally, parachute payments are compensation that is linked to or triggered by a change in control and may include, but are not limited to, bonus payments, severance payments, certain fringe benefits, and payments and acceleration of vesting from long-term incentive plans, including stock options and other equity-based compensation. Excess parachute payments are parachute payments that exceed a threshold determined under Section 280G based on the executive’s prior compensation.

The employment agreements with Messrs. DeVries, Likosar, Bresingham and Young, each provide that, to the extent the executive would be subject to Section 280G or 4999 of the Code, the executive’s parachute payments would be reduced to the extent that no portion of the payment shall be subject to the excise tax, but only if the executive’s net after-tax benefit would exceed what the net after-tax benefit would have been if such reduction were not made and the executive paid the applicable excise tax. We do not provide excise tax gross-ups to our NEOs.

REPORT OF THE COMPENSATION COMMITTEE

 

 

The Compensation Committee 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 and the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Members of the Compensation Committee:

Marc E. Becker, Chairman

Andrew D. Africk

Reed B. Rayman

The Report of the Compensation Committee is not to be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the Exchange Act, except to the extent the Company specifically requests that such information be treated as soliciting material or specifically incorporates it by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act.

 

34		2022 PROXY STATEMENT

EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

Summary Compensation Table

 

 

The information set forth in the following table reflects compensation paid to or earned by the NEOs for fiscal years 2021, 2020 and 2019. The table reflects total compensation earned beginning in the later of fiscal year 2019 or the year an individual first became a NEO.

 

Name and Principal Position		Year				Salary ($)				Bonus(1) ($)				Stock Awards(2) ($)				Option Awards(3)				Non-Equity Incentive Plan Compensation(4) ($)		All Other Compensation(5)(6) ($)		Total ($)
James D. DeVries			2021				1,043,269								4,612,498							1,648,500		175,525			7,479,792
President and Chief Executive Officer			2020				1,018,269								8,827,151				2,104,302			1,927,000		265,571			14,142,293
			2019				1,000,000								3,941,997				2,250,000			853,750		1,297,512			9,343,259
Jeffrey A. Likosar			2021				678,422				67,098				999,993							857,730		52,758			2,656,001
Chief Financial Officer and President,			2020				661,875				63,177				5,432,607				2,155,584			1,002,040		91,226			9,406,509
Corporate Development			2019				575,646				39,643				2,233,696				499,999			443,950		949,169			4,742,103
Daniel M. Bresingham			2021				542,738								599,997							686,184		36,530			1,865,449
Executive Vice President, Commercial			2020				529,500								5,138,070				2,206,873			692,900		77,683			8,645,026
			2019				517,308								2,158,418				299,999			355,160		964,587			4,295,472
Keith F. Holmes			2021				336,923								3,299,997							753,600		115,414			4,505,934
Executive Vice President and Chief Revenue Officer
Donald M. Young			2021				542,738								599,997							686,184		43,476			1,872,395
Executive Vice President and Chief Operating Officer			2020				529,500								5,138,070				2,206,873			801,632		77,083			8,753,158
			2019				517,308								2,158,418				299,999			355,160		967,187			4,298,072
James P. Boyce(7)			2021				319,168															340,342		2,712,955			3,372,465
Former President, Chief Business Development Officer			2020				665,375				1,000,000				625,000				511,787			985,120		544,157			4,331,439

 

(1)

The amounts in this column represent for Mr. Likosar the value of a distribution bonus (in respect of accrued distributions on the Class A-2 Units of Prime TopCo LP underlying Mr. Likosar’s retention bonus paid to Mr. Likosar in connection with the vesting of the second, third, and fourth installments of the retention bonus, payable in accordance with the terms of his employment agreement). For Mr. Boyce the amount represents the value of the discretionary transaction bonus paid to him upon the successful completion of the sale of Defenders, LLC to ADT Inc. in January 2020.

 

(2)	The values in the “Stock Awards” column for fiscal years 2021, 2020, and 2019 reflect the following:

 

•

2021: The grant date fair value of RSU awards made to Messrs. DeVries, Likosar, Bresingham and Young, in connection with the 2021 LTIP and the grant date fair value of a RSU award made to Mr. Holmes on July 1, 2021.

•

2020: The grant date fair value of RSU awards made to Mr. Boyce on February 2, 2020 in connection with his employment at ADT and the grant date fair value of RSU awards made to Messrs. DeVries, Likosar, Bresingham and Young in connection with: (i) the 2020 LTIP; and (ii) the 2020 Special Equity Awards.

•

2019: The grant date fair value of RSU awards made to Messrs. DeVries, Likosar, Bresingham and Young in connection with the 2019 LTIP and a non-cash accounting charge representing the incremental fair value associated with the 2019 modification in connection with the amendment of the Performance Tranche of the Distributed Shares, in each case computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718, “Stock Compensation” (“FASB ASC Topic 718”). The increase in fair value associated with the 2019 modification in connection with the amendment of the Performance Tranche of the Distributed Shares is as follows: Mr. DeVries $1,692,001; Mr. Likosar $1,733,697; Mr. Bresingham $1,858,422; and Mr. Young $1,858,422.

•

The assumptions used in the valuation of stock-based awards are discussed in Note 10 “Share-Based Compensation” in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

 

(3)	The values in the “Option Awards” column for fiscal years 2020 and 2019 reflect the following:

 

•

2020: The fair value associated with the grant of non-qualified stock options made to Mr. Boyce on February 3, 2020 in connection with his employment at ADT and the fair value associated with the grant of non-qualified stock options made in connection with 2020 Special Equity Awards to Messrs. DeVries, Likosar, Bresingham and Young.

•

2019: The fair value associated with the grant of non-qualified stock options made in connection with 2019 LTIP.

•

The stock-based compensation amounts shown in this column reflect the aggregate grant date fair value, assuming no risk of forfeiture, of stock option awards calculated in accordance with FASB ASC Topic 718. We use the Black-Scholes option pricing model to estimate the fair value of stock options granted, which requires the input of both subjective and objective assumptions. The assumptions used in the valuation of stock-based awards are discussed in Note 10 “Share-Based Compensation” in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

 

		2022 PROXY STATEMENT		35

EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

(4)	The amounts reported in this column were earned under our annual cash incentive bonus program for the applicable year, which is described above. See “Executive Compensation—Annual Incentive Compensation.”

 

(5)	SSRP employer contributions are reported in the year earned rather than the successive year when the contribution amount is finalized.

 

(6)	Details with respect to the amounts in this column are set forth in the “All Other Compensation” table below.

 

(7)	James P. Boyce separated from the Company on May 31, 2021, at which time he continued to consult with the Company in an advisory capacity, on an as-needed basis from June 1, 2021 through December 31, 2021. Base salary includes the balance of unused paid time off.

Summary Compensation Table—All Other Compensation

 

 

The components of the “All Other Compensation” column in the Summary Compensation Table for each NEO are shown in the following table.

 

Name		Fiscal Year				Retirement  Plan Contributions(a) ($)				Miscellaneous(b) ($)				Total All Other Compensation ($)
James D. DeVries			2021				84,451				91,074				175,525
Jeffrey A. Likosar			2021				50,711				2,047				52,758
Daniel M. Bresingham			2021				35,132				1,398				36,530
Keith F. Holmes			2021				16,846				98,568				115,414
Donald M. Young			2021				40,568				2,908				43,476
James P. Boyce			2021				16,232				2,696,723				2,712,955

 

(a)	Amounts represent matching contributions made by the Company on behalf of each NEO to its tax-qualified 401(k) RSIP and to its non-qualified SSRP, as applicable.

 

(b)

Miscellaneous compensation in fiscal year 2021 includes: (i) for Mr. DeVries, $27,840 related to certain reimbursed housing expenses and approximately $26,315 in certain work-related travel expenses that did not qualify as reimbursable business expenses. In addition, Mr. DeVries received an additional payment in 2021, equal to $35,136, as a gross up for the taxes on the aforementioned expenses; (ii) the value of Company-paid contributions for life insurance benefits for all NEOs; (iii) relocation benefits valued at $98,010 for Mr. Holmes and (iv) Severance payment in the amount of $2,669,232 which includes a tax gross up payment for benefit costs made to Mr. Boyce as described below under “—Potential Payments upon Termination or Change in Control—Severance Payments and Benefits under Employment Agreements” and $27,000 in consulting fees.

 

36		2022 PROXY STATEMENT

EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

Grants of Plan-Based Awards in Fiscal 2021 Table

 

 

The following table shows grants of plan-based awards granted to our NEOs during fiscal year 2021. All numbers have been rounded to the nearest whole dollar or share.

 

														Estimated Possible Payouts Under Non-Equity Incentive Plan Awards												All Other Stock Awards: Number of Shares of Stock or Units (#)				All Other Option Awards: Number of Securities Underlying Options (#)				Exercise or Base Price of Option Awards ($/Sh)				Grant Date Fair Value of Stock and Option Awards ($)(1)
Name		Grant Type				Approval Date				Grant Date				Threshold ($)				Target ($)				Maximum ($)
														(a)				(b)				(c)				(d)				(e)				(f)				(g)
James D. DeVries			2021 AIP	(2)											656,250				1,312,500				2,625,000				—				—				—				—
			LTIP-RSU	(3)			3/1/2021				3/1/2021				—				—				—				595,930				—				—				4,612,498
Jeffrey A. Likosar			2021 AIP	(2)											341,453				682,906				1,365,812				—				—				—				—
			LTIP-RSU	(3)			3/1/2021				3/1/2021				—				—				—				129,198				—				—				999,993
Daniel M. Bresingham			2021 AIP	(2)											273,163				546,325				1,092,650				—				—				—				—
			LTIP-RSU	(3)			3/1/2021				3/1/2021				—				—				—				77,519				—				—				599,997
Keith F. Holmes			2021 AIP	(2)											300,000				600,000				1,200,000				—				—				—				—
			LTIP-RSU	(3)			7/1/2021				7/1/2021				—				—				—				303,030				—				—				3,299,997
Donald M. Young			2021 AIP	(2)											273,163				546,325				1,092,650				—				—				—				—
			LTIP-RSU	(3)			3/1/2021				3/1/2021				—				—				—				77,519				—				—				599,997
James P. Boyce			2021 AIP	(2)(4)											327,500				655,000				1,310,000				—				—				—				—

 

(1)

Amounts in this column show the grant date fair value of the RSU awards granted to the NEOs. These amounts reflect the fair value of the entire amount of the award calculated in accordance with FASB ASC Topic 718. For grants of RSUs, fair value is computed by multiplying the total number of shares subject to the award by the closing price of the Company’s Common Stock on the date of grant.

 

(2)

Under our 2021 AIP, each NEO is eligible to receive an annual cash incentive bonus for the fiscal year, the amount of which will vary depending on the degree of attainment of certain performance goals, as described in “Compensation Discussion and Analysis—Elements of Executive Compensation—Annual Incentive Compensation.” Amounts reported in columns (a) through (c) represent the potential amount of the bonus if performance goals were attained at certain threshold, target, or maximum levels.

 

(3)	Amounts represent grants of RSUs with respect to our long-term incentive program and are described more fully in the Outstanding Equity Awards at Fiscal 2021 Year-End Table.

 

(4)	2021 AIP target for Mr. Boyce was prorated based on the number of days worked during the performance period.

Employment Arrangements

 

 

James D. DeVries

Mr. DeVries is party to an amended and restated employment agreement with ADT LLC dated September 4, 2018, which was subsequently amended on November 30, 2018, pursuant to which he serves as our President and CEO. The employment agreement had an initial term beginning on May 23, 2016, through May 23, 2021, and extends automatically for successive one-year periods, unless either party provides written notice of non-renewal to the other party at least 90 days prior to the expiration of the then-applicable term. Under his employment agreement, his annual base salary is subject to annual review and possible increase (but not decrease). In addition, he is eligible to receive an annual cash bonus based on the attainment of objective financial and/or other subjective or objective criteria. Mr. DeVries’ target annual bonus is currently 125% of base salary. Mr. DeVries participates in our long-term incentive plan, and is eligible to receive long-term incentive awards with a target value equal to 450% of his base salary. He is also eligible to participate in the employee benefit plans, programs, and arrangements of the Company in effect from time to time, in accordance with their terms, including, without limitation, retirement, medical and welfare benefits.

Mr. DeVries’ employment agreement provides for certain severance benefits to be paid in the event of employment termination in certain circumstances, as well as post-termination restrictive covenant provisions, which are described below

 

		2022 PROXY STATEMENT		37