DEF 14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

 

 

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

Check the appropriate box:

 

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

MONEYGRAM INTERNATIONAL, INC.

(Name of Registrant as Specified In Its Charter)

 

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

Payment of Filing Fee (Check the appropriate box):

  No fee required.
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  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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2020

 

 

  NOTICE OF ANNUAL MEETING

  AND PROXY STATEMENT

 

 

LOGO


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LETTER FROM OUR CHAIRMAN AND CEO

 

 

LOGO

2828 North Harwood Street, 15th Floor

Dallas, Texas 75201

March 27, 2020

Dear MoneyGram Stockholder:

You are invited to attend our virtual-only 2020 Annual Meeting of Stockholders, which will be held at 8:00 a.m. (Central Time) at www.virtualshareholdermeeting.com/MGI2020.

Details of the business to be conducted at the meeting are described in the attached Notice of 2020 Annual Meeting of Stockholders and Proxy Statement.

Your vote is important and we encourage you to vote whether or not you plan to attend the meeting. Please sign, date and return the enclosed proxy card in the envelope provided, or you may vote by telephone or on the Internet as described on your proxy card.

I encourage you to read the Annual Report on Form 10-K for information about the Company’s performance in 2019, which is available on the Company’s Investor Relations website at ir.moneygram.com.

We look forward to seeing you at the meeting.

Sincerely,

 

LOGO   

LOGO

 

W. Alexander Holmes

Chairman and Chief Executive Officer

 



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NOTICE OF 2020 ANNUAL MEETING OF STOCKHOLDERS

 

 

LOGO

2828 North Harwood Street, 15th Floor

Dallas, Texas 75201

 

      

 

Date and Time

 

Wednesday, May 6, 2020

8:00 a.m. Central Time

 

   
      

 

Location

 

This year’s meeting is a virtual-only meeting at:

www.virtualshareholdermeeting.com/
MGI2020

 

   
      

 

Record Date

 

March 9, 2020

 

 

   
 

 

1.

To elect seven directors to serve one-year terms;

 

2.

To ratify the appointment of KPMG LLP as our independent registered public accounting firm for 2020;

 

3.

To approve an advisory vote on executive compensation;

 

4.

To approve an Amendment and Restatement of the MoneyGram International, Inc. 2005 Omnibus Incentive Plan; and

 

5.

To act upon any other matters that may properly come before the meeting and any adjournment(s) or postponement(s) thereof.

Only stockholders of record of our common stock at the close of business on March 9, 2020 are entitled to receive this notice and to vote at the meeting. A list of the names of stockholders of record entitled to vote at the meeting will be available during the entire time of the meeting on the virtual meeting website.

To assure your representation at the meeting, please vote by telephone, on the Internet using the instructions on the proxy card, or by signing, dating and returning the proxy card in the postage-prepaid envelope provided. You may also vote online during the meeting.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON WEDNESDAY MAY 6, 2020

The Notice of Annual Meeting, Proxy Statement and 2019 Annual Report on Form 10-K are available at www.proxyvote.com.

By Order of the Board of Directors

 

LOGO

Robert L. Villaseñor

General Counsel and

Corporate Secretary

Dallas, Texas

March 27, 2020


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  TABLE OF CONTENTS     i

 

TABLE OF CONTENTS

 

VOTING INFORMATION      1  

Who May Vote/Voting Rights

     1  

How You May Vote

     1  

How You May Revoke or Change Your Vote

     1  

Costs of Solicitation

     2  

Difference between a Stockholder and a Beneficial Owner of Shares Held in Street Name

     2  

Participating in the Annual Meeting

     2  

Votes Required/Voting Procedures

     3  

Reducing Duplicate Mailings

     4  
BOARD OF DIRECTORS AND GOVERNANCE      5  

Board Structure and Composition

     5  

Director Independence

     5  

Board Meetings

     5  

Attendance at Annual Stockholder Meetings

     5  

Meetings of Non-Management Directors

     5  

Meetings of Independent Directors

     6  

Board Leadership Structure

     6  

Board’s Role in Risk Oversight

     6  

Board Committees

     6  

Communications with the Board

     8  

Director Nominee Criteria and Process

     8  

Compensation Committee Interlocks and Insider Participation

     8  

Other Corporate Governance Matters

     8  

PROPOSAL 1: ELECTION OF DIRECTORS

     11  

Director Nominees—Qualifications and Background

     11  

Director Compensation

     14  

Board Voting Recommendation

     15  

PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2020

     15  

Independent Registered Public Accounting Firm Fees

     15  

Audit Committee Approval of Audit and Non-Audit Services

     15  

Board Voting Recommendation

     15  

Audit Committee Report

     16  

PROPOSAL 3: ADVISORY RESOLUTION APPROVING THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

     17  

Board Voting Recommendation

     17  
EXECUTIVE COMPENSATION      18  

Compensation Discussion and Analysis

     18  

Overview of Our Compensation Philosophy

     18  

Overview of Our Business

     18  

2019 Performance Highlights

     19  

Executive Compensation Philosophy and Program Design

     20  

Key Features of the Executive Compensation Program

     21  

Snapshot: How Compensation Is Delivered to Our Named Executives (Pay Mix)

     22  

Role of the Human Resources and Nominating Committee

     22  

Role of the Compensation Consultant

     25  

Role of the CEO

     25  

Mitigation of Excessive Risk-Taking

     25  

Peer Group Selection and Competitive Benchmarking

     27  

2019 Compensation Review and Decisions

     28  

Annual Cash Incentive Plan

     30  

Long-Term Incentives

     31  

Other Compensation

     32  

Employment and Other Agreements

     33  

Compensation Committee Report

     37  
EXECUTIVE COMPENSATION TABLES      38  

2019 SUMMARY COMPENSATION TABLE

     38  

2019 DETAILS BEHIND ALL OTHER COMPENSATION COLUMN TABLE

     39  

2019 GRANTS OF PLAN-BASED AWARDS

     40  

OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2019

     42  

2019 OPTION EXERCISES AND STOCK VESTED TABLE

     43  

Potential Payments upon Termination or Change of Control

     43  

CEO Pay Ratio

     46  

Methodology and Assumptions

     46  
PROPOSAL 4: AMENDMENT AND RESTATEMENT OF THE MONEYGRAM INTERNATIONAL, INC. 2005 OMNIBUS INCENTIVE PLAN      47  

Background and Purpose of the Proposal

     47  

Current Overview of Outstanding Equity Awards

     48  

Summary of the 2005 Plan, as Amend by the Amendment and Restatement

     49  

Key Features of the 2005 Plan

     49  

Certain Federal Income Tax Consequences

     53  

New Plan Benefits

     55  

Board Voting Recommendation

     56  
EQUITY COMPENSATION PLAN INFORMATION      57  
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS      58  

Policy and Procedures Regarding Transactions with Related Persons

     58  

Transactions with Related Persons

     58  
BENEFICIAL OWNERSHIP OF COMMON STOCK      60  

PRINCIPAL STOCKOWNERS

     60  

DIRECTORS AND EXECUTIVE OFFICERS

     62  
STOCKHOLDER PROPOSALS FOR THE 2020 ANNUAL MEETING      63  
2019 ANNUAL REPORT ON FORM 10-K      64  
OTHER MATTERS      65  
ANNEX A—NON-GAAP MEASURES      A-1  
ANNEX B—AMENDED AND RESTATED MONEYGRAM INTERNATIONAL, INC. 2005 OMNIBUS INCENTIVE PLAN      B-1  
PROXY VOTING CARD   
 

 

 

 

2020 Notice and Proxy Statement      LOGO  


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PROXY STATEMENT

 

 

LOGO

VOTING INFORMATION

A proxy is solicited on behalf of the Board of Directors (the “Board”) of MoneyGram International, Inc. (“MoneyGram,” the “Company,” “we,” “us” or “our”) for use at the Annual Meeting of Stockholders to be held on Wednesday, May 6, 2020, beginning at 8:00 a.m. at www.virtualshareholdermeeting.com/MGI2020 and at any adjournment or postponement thereof. We are first mailing the proxy statement and proxy card to holders of MoneyGram common stock on or about March 27, 2020.

Who May Vote/Voting Rights

MoneyGram has two classes of capital stock outstanding: common stock and Series D Participating Convertible Preferred Stock, or D Stock.

Stockholders of record of MoneyGram common stock at the close of business on March 9, 2020, referred to herein as the record date, are entitled to receive the Notice of Annual Meeting and vote their shares at the meeting. On the record date, 63,359,826 shares of common stock and 71,282 shares of D Stock were outstanding. As of the record date, the 71,282 shares of D Stock, all of which are held by The Goldman Sachs Group, Inc. and its affiliates, or the Goldman Sachs Group, are convertible into 8,910,234 shares of common stock.

As of the record date, the Goldman Sachs Group would own approximately 12.4% of our common stock upon conversion of their D Stock. The D Stock, as held by the Goldman Sachs Group, is non-voting stock except for the rights to vote on limited matters specified in the Certificate of Designations, Preferences and Rights of the D Stock of the Company, none of which are being presented for a vote at this meeting.

A holder of common stock is entitled to one vote for each share of common stock held on the record date for each of the proposals set forth herein. There is no cumulative voting.

How You May Vote

You are entitled to vote at the meeting if you are a stockholder of record of common stock on the record date. You may vote by automated telephone voting, on the Internet or by proxy. The Board recommends you vote by proxy even if you plan to participate in the meeting. You may vote in one of four ways:

 

   

Online Prior to the Meeting: You may vote by proxy online. Go to www.proxyvote.com and follow the instructions found on your proxy card;

 

   

Online During the Meeting: You may vote online during the meeting by visiting www.virtualshareholdermeeting.com/MGI2020 and following the instructions found on your proxy card;

 

   

By Telephone: You may vote by proxy by calling the toll-free number found on the proxy card; or

 

   

By Mail: You may vote by proxy by filling out the proxy card and mailing it back in the envelope provided.

How You May Revoke or Change Your Vote

Proxies may be revoked or changed if you:

 

   

deliver a signed, written revocation letter, dated later than the proxy, to MoneyGram International, Inc., 2828 North Harwood Street, 15th Floor, Dallas, Texas 75201, Attention: General Counsel and Corporate Secretary;

 

   

deliver a signed proxy, dated later than the prior proxy, to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, New York 11717;

 

   

vote again by telephone or on the Internet prior to the meeting; or

 

   

attend the virtual meeting and vote at the virtual meeting by submitting a later-dated vote online.


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2     Voting Information   

 

If your shares are held in street name by a broker, bank, trust or other nominee, you must contact such organization and follow its procedures to revoke your proxy.

Costs of Solicitation

The costs of solicitation, if any, will be borne by MoneyGram. Proxies may be solicited on our behalf by directors, officers or employees, in person or by telephone, electronic transmission or facsimile transmission. No additional compensation will be paid to such persons for such solicitation. We have retained Alliance Advisors to act as a proxy solicitor in conjunction with the Annual Meeting. We have agreed to pay Alliance Advisors $10,000, plus reasonable out-of-pocket expenses, for proxy solicitation services.

MoneyGram will reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to beneficial owners of shares.

Your cooperation in promptly voting your shares and submitting your proxy by the Internet or telephone, or by completing and returning the enclosed proxy card (if you received your proxy materials in the mail), will help to avoid additional expense.

Difference between a Stockholder of Record and a Beneficial Owner of Shares Held in Street Name

If your shares are registered in your name with MoneyGram’s transfer agent, Equiniti Trust Company Shareowner Services, you are the “stockholder of record” of those shares. In such case, the Notice of Annual Meeting, proxy statement and any accompanying documents have been provided directly to you by MoneyGram.

If your shares are not registered in your own name and, instead, your broker, bank, trust or other nominee holds your shares, you are a “beneficial owner” of shares held in “street name.” The organization holding your account is considered the stockholder of record for purposes of voting at the annual meeting. The Notice of Annual Meeting, proxy statement and any accompanying documents have been forwarded to you by your broker, bank, trust or other nominee. As the beneficial owner, you have the right to direct your broker, bank, trust or other nominee how to vote your shares by using the voting instruction card or by following their instructions for voting by telephone or on the Internet.

Participating in the Annual Meeting

This year’s Annual Meeting will be accessible through the Internet. We have adopted a virtual format for our Annual Meeting to make participation accessible for stockholders from any geographic location with Internet connectivity. We have worked to offer the same participation opportunities as were provided at the in-person portion of our past annual meetings while further enhancing the online experience available to all stockholders regardless of their location. The accompanying proxy materials include instructions on how to participate in the meeting and how you may vote your shares of MoneyGram stock.

You are entitled to participate in the Annual Meeting if you were a stockholder as of the close of business on March 9, 2020, the record date, or hold a valid proxy for the meeting. To be admitted to the Annual Meeting at www.virtualshareholdermeeting.com/MGI2020, you must enter the 16-digit control number found next to the label “Control Number” for postal mail recipients or within the body of the email sending you the Proxy Statement.

Whether or not you participate in the Annual Meeting, it is important that your shares be part of the voting process. You may log on to proxyvote.com and enter your Control Number.

This year’s stockholder question and answer session will include questions submitted in advance of, and questions submitted live during, the Annual Meeting. You may submit a question in advance of the meeting at www.proxyvote.com after logging in with your Control Number. Questions may be submitted during the Annual Meeting through www.virtualshareholdermeeting.com/MGI2020.

We encourage you to access the Annual Meeting before it begins. Online check-in will start shortly before the meeting on May 6, 2020. If you have difficulty accessing the meeting, please call 1-800-586-1548 (toll free) or 303-562-9288 (international). We will have technicians available to assist you.

 


 

 

 

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  Voting Information     3

 

Votes Required/Voting Procedures

The presence at this annual meeting of stockholders, online or by proxy, of a majority of the voting power of our common stock issued and outstanding and eligible to vote will constitute a quorum for the transaction of business at the meeting. If a quorum is not present at the meeting, the chairman of the meeting or the holders of a majority of the voting power of our common stock entitled to vote at the meeting who are present in person or by proxy at the meeting have the power to adjourn the meeting from time to time, until a quorum is present.

In general, shares of common stock represented by a properly signed and returned proxy card, or properly voted by telephone or on the Internet, will be counted as present and entitled to vote at the meeting for purposes of determining the existence of a quorum. Proxies received but marked as abstentions and broker non-votes will be included in the voting power considered to be present at the meeting for purposes of determining a quorum. Broker non-votes are shares held of record by a broker that are not voted because the broker has not received voting instructions from the beneficial owner of the shares and the broker either lacks or declines to exercise the authority to vote the shares in its discretion.

Proxies will be voted as specified by the stockholder. Signed proxies that lack any specification will be voted (i) ”FOR” each of the Board’s director nominees; (ii) ”FOR” the ratification of KPMG LLP, or KPMG, as our independent registered public accounting firm for 2020; (iii) “FOR” the approval, on an advisory basis, of a resolution on our executive compensation; and (iv) “FOR” the approval of an Amendment and Restatment of the MoneyGram International, Inc. 2005 Omnibus Incentive Plan. Notwithstanding the foregoing, proxies corresponding to shares held through the MoneyGram International, Inc. 401(k) Plan, or the 401(k) plan, will be voted as described below. The proxy holders will use their best judgment with respect to any other matters properly brought before the meeting. If a nominee cannot or will not serve as a director, the proxy may be voted for another person as the proxy holders decide.

Unless you provide voting instructions to any broker holding shares on your behalf, your broker may not use discretionary authority to vote your shares on any of the matters to be considered at the annual meeting other than the ratification of our independent registered public accounting firm. Please vote your proxy so your vote can be counted.

Independent Tabulator.    We have appointed Broadridge Financial Solutions Inc. or Broadridge, as our independent tabulator to receive and tabulate all votes cast at the annual meeting. Broadridge will determine whether a quorum is present.

Election of Directors (Proposal 1).    Each director nominee receiving a majority of the voting power of the common stock outstanding as of the record date and voted with respect to the director will be elected as a director, provided a quorum is present at the meeting. This means that the voting power of the stock voted “FOR” a director nominee must exceed the voting power of the stock voted “AGAINST” that director nominee in order for that nominee to be elected as a director. Shares not represented at the meeting, broker non-votes and proxies marked “ABSTAIN” have no effect on the election of directors.

Ratification of Appointment of Independent Registered Public Accounting Firm for 2020 (Proposal 2).    The affirmative vote of a majority of the voting power of the common stock outstanding as of the record date and voted with respect to this proposal is required for the approval of this proposal, provided a quorum is present at the meeting. Shares not represented at the meeting, broker non-votes and proxies marked “ABSTAIN” with regard to this proposal have no effect on this proposal.

Advisory Vote on Executive Compensation (Proposal 3).    The affirmative vote of a majority of the voting power of the common stock outstanding as of the record date and voted with respect to this proposal is required to approve, on an advisory basis, the compensation of MoneyGram’s named executive officers and the overall executive compensation policies and procedures employed by MoneyGram for its named executive officers. Shares not represented at the meeting, broker non-votes and proxies marked “ABSTAIN” have no effect on this proposal. While the outcome of the vote on this proposal will not be binding on the Board, the Board will review and consider the voting results when determining future executive compensation decisions.

Amended and Restated MoneyGram International, Inc. 2005 Omnibus Incentive Plan (Proposal 4).    The affirmative vote of a majority of the voting power of the common stock outstanding as of the record date and voted with respect to this proposal is required for the approval of this proposal, provided a quorum is present at the meeting. Shares not represented at the meeting, broker non-votes and proxies marked “ABSTAIN” have no effect on this proposal.

 

 

 

 

2020 Notice and Proxy Statement      LOGO  


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4     Voting Information   

 

If you hold your shares in street name, unless you provide voting instructions to any broker holding shares on your behalf, your broker may not use discretionary authority to vote your shares on any of the matters to be considered at the annual meeting other than the ratification of our independent registered public accounting firm. Please vote your proxy so your vote can be counted.

If you are a participant in the 401(k) plan, your proxy will serve as a voting instruction to the Independent Fiduciary (as defined in the 401(k) plan). The Independent Fiduciary shall instruct the 401(k) plan Trustee how to vote. The Independent Fiduciary shall follow each participant’s instructions unless it determines that doing so would be contrary to the Employee Retirement Income Security Act of 1974, as amended, or ERISA. If no voting instructions are received from a participant in the 401(k) plan, the Trustee will vote those shares in accordance with the majority of shares voted in the 401(k) plan for which instructions were received, unless the Independent Fiduciary determines that doing so would be contrary to ERISA and instructs the Trustee to vote such shares differently.

Reducing Duplicate Mailings

Because many stockholders hold shares of our common stock in multiple accounts or share an address with other stockholders, stockholders may receive duplicate mailings of notices or proxy materials. Stockholders may avoid receiving duplicate mailings as follows:

 

   

Stockholders of Record.    If your shares are registered in your own name and you are interested in consenting to the delivery of a single notice or single set of proxy materials, you may contact Broadridge Householding Department by phone at 1-800-542-1061 or by mail to Broadridge Householding Department, 51 Mercedes Way, Edgewood, New York 11717.

 

   

Beneficial Stockholders.    If your shares are not registered in your own name, your broker, bank, trust or other nominee that holds your shares may have asked you to consent to the delivery of a single notice or single set of proxy materials if there are other MoneyGram stockholders who share an address with you. If you currently receive more than one copy of the notice or proxy materials at your household and would like to receive only one copy in the future, you should contact your nominee.

 

   

Right to Request Separate Copies.    If you consent to the delivery of a single notice or single set of proxy materials but later decide that you would prefer to receive a separate copy of the notice or proxy materials, as applicable, for each stockholder sharing your address, then please notify Broadridge Householding Department or your nominee, as applicable, and they will promptly deliver the additional notices or proxy materials. If you wish to receive a separate copy of the notice or proxy materials for each stockholder sharing your address in the future, you may also contact Broadridge Householding Department by phone at 1-800-542-1061 or by mail to Broadridge Householding Department, 51 Mercedes Way, Edgewood, New York 11717.

 


 

 

 

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Table of Contents
         
  Board of Directors and Governance     5

 

BOARD OF DIRECTORS AND GOVERNANCE

Board Structure and Composition

The Company’s Amended and Restated Certificate of Incorporation, as amended, and Amended and Restated Bylaws, as amended (our “Bylaws”), provide that each director of the Company is elected for a one-year term by the vote of a majority of the voting power of the common stock outstanding as of the record date and voted with respect to the director, provided that in contested elections, the directors shall be elected by a plurality of the voting power of the common stock. Subject to certain rights of the Investors, the number of directors on the Board shall be fixed by a majority of the whole Board, but shall not be more than seventeen nor less than three. If a vacancy occurs, including as a result of an increase in the authorized number of directors, the vacant directorship may be filled by the affirmative vote of a majority of the votes of the remaining directors for a term expiring at the next annual meeting of stockholders. Each director holds office until a successor has been duly elected and qualified.

The Board is currently made up of nine members: eight independent directors (as defined below) and W. Alexander Holmes, Chairman of the Board and Chief Executive Officer (“CEO”), of the Company. J. Coley Clark, Victor W. Dahir, Ambassador Antonio O. Garza, Seth W. Lawry, Michael P. Rafferty, Ganesh B. Rao, W. Bruce Turner and Peggy Vaughan currently serve as independent directors on the Board. An “independent director” means a director or director nominee who satisfies all standards for independence under the Nasdaq Stock Market, or Nasdaq, listing standards and applicable SEC regulations. Each of the Company’s current directors, with the exception of Mr. Rao and Mr. Lawry, is seeking re-election at the 2020 Annual Meeting of Stockholders. Mr. Rao and Mr. Lawry have acted as board representatives (the “Board Representatives”) of Thomas H. Lee Partners, L.P., or THL, pursuant to contractual board appointment rights previously held by THL.

Director Independence

Because the Board Representatives previously had the majority of the votes of our Board, the Company elected to be treated as a “controlled company” for purposes of the Nasdaq listing standards. As a result, the Nasdaq listing standards did not require our Board to be composed of at least a majority of independent directors or our Human Resources and Nominating Committee to be composed entirely of independent directors. The Nasdaq listing standards did, however, require our Audit Committee to be composed entirely of independent directors. Effective November 12, 2019, the Company was no longer a “controlled company” following the distribution in kind by THL of shares of common stock of the Company previously owned by THL. Pursuant to the Nasdaq listing standards, the Company has one year from November 12, 2019 to comply with the Nasdaq listing standards independence requirements. Although the Company has one year to comply with the Nasdaq independence requirements, the Board has determined that the majority of the Board, and each member of the Audit Committee and the Human Resources and Nominating Committee, is an independent director under the Nasdaq listing standards and the rules of the Securities and Exchange Commission, or the SEC. The Company expects to continue to remain in full compliance with the Nasdaq listing standards with respect to Board and committee independence.

The Board has determined that the following directors or director nominees are independent within the meaning of the Nasdaq listing standards: Ms. Vaughan, Messrs. Clark, Dahir, Rafferty, Turner and Amb. Garza.

Board Meetings

The Board held sixteen meetings during 2019. Each director attended at least 75% of the aggregate number of meetings of the Board and meetings of the committees on which the director served.

Attendance at Annual Stockholder Meetings

Under our Corporate Governance Guidelines, directors are expected to attend the annual meeting of stockholders, Board meetings and meetings of committees on which they serve. Each director attended the 2019 Annual Meeting of Stockholders.

Meetings of Non-Management Directors

The Board schedules regular executive sessions of the non-management directors. The Board chooses one of its non-management members to preside over each such executive session of non-management directors. In 2019, the Board held five executive sessions of the non-management directors, which included all directors except Mr. Holmes.

 

 

 

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Table of Contents
          
6     Board of Directors and Governance   

 

Meetings of Independent Directors

Pursuant to our Corporate Governance Guidelines and the Nasdaq listing standards, the Board schedules an executive session of the independent directors at least twice annually. In 2019, the Board held five executive sessions of the independent directors. The Company does not have a lead independent director. The Board does, however, choose one independent director to preside over each executive session of independent directors.

Board Leadership Structure

The Board reviews its leadership structure periodically. Mr. Holmes has been CEO of the Company since January 1, 2016, has been a member of the Board since December 10, 2015 and, effective February 2, 2018, was appointed as the Chairman of the Board. At this time, we believe that a combined Chairman and CEO is the most desirable approach for the Company because it creates efficiencies and enables the CEO to act as a bridge between management and the Board.

Board’s Role in Risk Oversight

The Board is responsible for providing oversight of risk management functions, including the Company’s policies and strategies relating to the management of credit, liquidity, market, financial and operational risks. The Board regularly assesses management’s response to critical risks and recommends changes to management, including changes in leadership, where appropriate.

The Board meets periodically with key members of management to review the Company’s business and agree upon its strategy and the risks involved with such strategy. Management and the Board discuss the amount of risk the Company is willing to accept related to implementing our strategy. On a periodic basis throughout the year, management responsible for managing credit, liquidity, market, financial and key operational risks, including legal, regulatory compliance, fraud, information technology and security (including cybersecurity risks), meet directly with the Board and with the Audit Committee to provide an update on key risks and their processes and systems to manage the risks. The Board approves management’s policies related to key risk areas and provides timely input to management regarding risk issues and the appropriateness of management’s response. The Board also approves actions surrounding our capital structure, debt agreements, interest payments and legal settlements, evaluates potential key acquisitions and approves the annual budget. Key finance, accounting and treasury management meet directly with the Board to provide updates on our financial results.

The Board delegates responsibility for overseeing certain risks to the Audit Committee. The Audit Committee monitors the quality and integrity of our financial statements and, along with the Compliance and Ethics Committee, our compliance with legal and regulatory requirements. The Audit Committee is also responsible for understanding risk assessment and risk management policies. The internal audit function reports directly to the Audit Committee and is responsible for testing, on a risk basis, management’s compliance with policies and procedures. On an annual basis, the Audit Committee reviews the internal audit function and internal audit reports and regularly meets with management regarding updates on key risks and their processes and systems to manage the risks. The Audit Committee also reviews and approves the annual audit plan and regularly reports to the Board. For additional information with respect to the Audit Committee, see “Board of Directors and Governance—Board Committees—Audit Committee” in this proxy statement.

Board Committees

The Board currently maintains two standing committees: the Audit Committee and the Human Resources and Nominating Committee. As the Company was previously a “controlled company” under the Nasdaq listing standards, MoneyGram was not required to maintain compensation and nominating committees composed only of independent directors. However, given that the Company is no longer a “controlled company” under the Nasdaq listing standards, it will need to comply with the committee independence requirements by November 12, 2020, the one-year anniversary of the date on which it ceased to be a “controlled company.” The Board has determined that each member of the Audit Committee and the Human Resources and Nominating Committee is an independent director under the Nasdaq listing standards and the rules of the SEC.

In addition, we have established a Compliance and Ethics Committee composed of certain non-employee members of the Board.

 


 

 

 

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Audit Committee

The Audit Committee currently consists of Ms. Vaughan and Messrs. Dahir (Chair), Rafferty and Turner. Membership on the Audit Committee is limited to independent directors, and the Board has determined that each member of the Audit Committee is an independent director under the Nasdaq listing standards and the rules of the SEC. The Board has also determined, in accordance with the Nasdaq listing standards, that all members of the Audit Committee are sufficiently proficient in reading and understanding financial statements to serve on the Audit Committee and that Messrs. Dahir and Rafferty each qualify as an “audit committee financial expert” under the rules of the SEC and meet the “financial sophistication” standard as defined under the Nasdaq listing standards. No member of the Audit Committee simultaneously served on the audit committee of more than three public companies during 2019.

The Audit Committee held nine meetings in 2019. The Board has adopted a separate written charter for the Audit Committee, which is available at ir.moneygram.com.

The Audit Committee reports regularly to the Board and annually evaluates its own performance. The Audit Committee meets periodically during the year, in conjunction with regular meetings of the Board, and reviews quarterly earnings and related press releases and management’s discussion and analysis of financial condition and results of operation for inclusion in our quarterly reports on Form 10-Q and our annual report on Form 10-K filed with the SEC. The Audit Committee appoints our independent registered public accounting firm and assists the Board in monitoring the quality and integrity of our financial statements, the independence and performance of our internal auditor and our independent registered public accounting firm, and, along with the Compliance and Ethics Committee, our compliance with legal and regulatory requirements. The Audit Committee meets regularly in executive session with our independent registered public accounting firm. The independent registered public accounting firm reports directly to the Audit Committee, and the head of the Company’s internal audit function reports directly to the Audit Committee Chair. For additional information regarding the responsibilities of the Audit Committee, see “Board of Directors and Governance—Board’s Role in Risk Oversight” in this proxy statement.

Human Resources and Nominating Committee

The Human Resources and Nominating Committee, or the HRNC, currently consists of Messrs. Clark (Chair) and Lawry and Amb. Garza. The Board has determined that each member of the Human Resources and Nominating Committee is an independent director under the Nasdaq listing standards and the rules of the SEC.

The HRNC held four meetings in 2019. The Board has adopted a separate written charter for the HRNC, which is available at ir.moneygram.com.

The HRNC reports regularly to the Board and annually evaluates its own performance. It meets periodically during the year, in conjunction with regular meetings of the Board. The HRNC oversees development and implementation of a compensation strategy designed to enhance profitability and fundamental value for the Company. It also reviews and approves the salary and other compensation of the CEO and our other executive officers, as well as the compensation and benefits of our non-employee directors. The HRNC determines incentive compensation targets and awards under various compensation plans and makes grants of equity awards under our stock incentive plan. The HRNC approves the grant of equity compensation to executive officers of the Company (other than the CEO, whose grants are approved by the full Board), and has delegated authority to the Chairman and CEO to approve grants of equity compensation to employees who are not executive officers. During 2019, the HRNC utilized the services of Lyons, Benenson & Company Inc., or LB&Co., as its compensation consultant. In 2019, LB&Co. assisted the HRNC with an evaluation of the Company’s peer group and executive and non-employee director compensation matters. For additional information regarding our compensation consultant, see “Executive Compensation-Compensation Discussion and Analysis-Role of the Compensation Consultant” in this proxy statement.

The HRNC is also responsible for recommending to the Board a slate of directors for election by the stockholders at each annual meeting and for proposing candidates to fill any vacancies on the Board. The HRNC is also responsible for assessing the Board’s performance and reviewing our Corporate Governance Guidelines. The HRNC may form subcommittees and delegate authority to such subcommittees when appropriate and when unanimously approved by the HRNC.

 

 

 

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Compliance and Ethics Committee

The Compliance and Ethics Committee currently consists of Amb. Garza (Chair) and Messrs. Lawry, Rao and Turner. This committee, among other things, oversees the Company’s programs, policies and procedures regarding compliance with applicable laws and regulations, including the Company’s Code of Conduct, anti-corruption policy and anti-fraud and anti-money laundering policies and oversees the activities of the Company’s chief compliance officer with respect thereto. The Compliance and Ethics Committee also oversees the Company’s compliance with the Deferred Prosecution Agreement (the “DPA”) entered into among the Company and the U.S. Department of Justice and the U.S. Attorney’s Office for the Middle District of Pennsylvania and the Stipulated Order for Compensatory Relief and Modified Order for Permanent Injunction with the Federal Trade Commission.

Communications with the Board

Stockholders or other interested parties may communicate with our non-management directors as a group, committees of the Board or individual directors by writing to MoneyGram International, Inc., 2828 North Harwood Street, 15th Floor, Dallas, Texas 75201, Attention: Corporate Secretary. Upon receipt, the Corporate Secretary will review such correspondence and, in his discretion, forward such correspondence to the Board for its consideration. Complaints and concerns regarding MoneyGram may also be reported anonymously and confidentially via MoneyGram’s Ethics Line at 800-494-3554. Our Policy on Communications with the Board is contained in our Corporate Governance Guidelines, which are posted at ir.moneygram.com.

Director Nominee Criteria and Process

Our Corporate Governance Guidelines describe the process for selection of director nominees, including desired qualifications. Although there are no minimum qualifications for nominees, a candidate for Board service must possess the ability to apply good business judgment, have demonstrated the highest level of integrity, be able to properly exercise the duties of loyalty and care in the representation of the interests of our stockholders and must be able to represent all of our stockholders fairly and equally. Candidates should also exhibit proven leadership capabilities, and experience in business, finance, law, education, technology or government. In addition, candidates should have an understanding of major issues facing public companies similar in scope to MoneyGram. Experience in payments, financial services or consumer products is an added benefit. Candidates must have, and be prepared to devote, adequate time to the Board and its committees. Although no formal policy exists, the HRNC seeks to promote through the nomination process an appropriate diversity of experience (including international experience), expertise, perspective, age, gender and ethnicity, and includes such diversity considerations when appropriate in connection with potential nominees. The Board will also consider the independence of a nominee under the Nasdaq listing standards and applicable SEC regulations.

In general, candidates for membership to the Board are evaluated, regardless of the source of the nomination, by the HRNC for recommendation to the Board in accordance with its charter and the procedures described in the Corporate Governance Guidelines.

A stockholder who wishes to nominate a person for the election of directors must ensure that the nomination complies with our Bylaw provisions on making stockholder nominations at an annual meeting. For information regarding stockholder proposals for our 2021 annual meeting of stockholders, see the section entitled “Stockholder Proposals for the 2021 Annual Meeting” in this proxy statement.

Compensation Committee Interlocks and Insider Participation

The directors that served as members of the HRNC during the year ended December 31, 2019 were Messrs. Clark (Chair), Lawry and Amb. Garza. No member of the Company’s HRNC is a current or former officer or employee of the Company. During the year ended December 31, 2019, none of our executive officers served as a director or member of the compensation committee (or other committee performing similar functions) of another entity when an executive officer of such entity served as a director of the Company or on the HRNC.

Other Corporate Governance Matters

Corporate Governance Guidelines.    Our Board has adopted Corporate Governance Guidelines that describe corporate values and ethical business conduct, duties of directors, Board operations, committee matters, director qualifications and selection process, director compensation, director independence standards, director retirement

 


 

 

 

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age, CEO evaluation, management succession, process for stockholders or other interested parties to communicate with directors and annual Board evaluations. The Corporate Governance Guidelines are available at ir.moneygram.com.

Corporate Social Responsibility    MoneyGram is committed to the principles of Corporate Social Responsibility as a positive corporate citizen and recognizes these ideals add value for our employees, our stockholders, and our community. Accordingly, our Board has adopted a Corporate Social Responsibility policy which outlines the goals and purpose of the program. The policy states that MoneyGram leaders will act as role models by incorporating Corporate Social Responsibility considerations in all business activities and ensuring that appropriate processes are in place to effectively identify, monitor, and manage Corporate Social Responsibility issues relevant to our business and industry. As stated in the policy, at MoneyGram we define Corporate Responsibility as:

 

   

Leading in compliance with all legal and regulatory standards for our industry;

 

   

Enabling financial inclusion;

 

   

Conducting business in an ethical and transparent manner;

 

   

Consumer protection;

 

   

Protecting the environment and the health & safety of our employees and consumers;

 

   

Investing in our communities; and

 

   

Building a diverse, educated and supported global employee base.

Code of Conduct.    All of our directors and employees, including our principal executive officer, principal financial officer and principal accounting officer, or persons performing similar functions, are subject to our Code of Conduct and the provisions regarding corporate values and ethical business conduct contained in our Corporate Governance Guidelines. These documents are available at ir.moneygram.com. The Company intends to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendments to, or waivers from, our Code of Conduct by posting such information on our website.

Committee Authority to Retain Independent Advisors.    Each committee of the Board has the authority to retain independent advisors and consultants, with all fees and expenses to be paid by the Company.

Whistleblower Procedures.    The Audit Committee has established procedures for complaints whereby employees of the Company may submit a good faith complaint of workplace practices or policies that they believe to be in violation of law, against public policy, fraudulent or unethical, including accounting, internal accounting controls or auditing matters, without fear of dismissal or retaliation. MoneyGram is committed to achieving compliance with all applicable securities laws and regulations, accounting standards, accounting controls and auditing practices. In order to facilitate the reporting of employee complaints, the Audit Committee has established procedures for the receipt, retention and treatment of complaints, and confidential, anonymous submission by employees of concerns regarding such questionable matters.

Disclosure Committee.    We have established a Disclosure Committee composed of members of management to assist in fulfilling our obligations to maintain disclosure controls and procedures and to coordinate and oversee the process of preparing our periodic securities filings with the SEC.

Asset/Liability Committee.    We have established an Asset/Liability Committee composed of members of management and chaired by our Chief Financial Officer, or CFO, to oversee and make recommendations to the Board regarding financial policies and procedures of the Company.

No Executive Loans.    We do not extend loans to our executive officers or directors and do not have any such loans outstanding.

Majority Vote Standard.    In an uncontested election, our Bylaws require directors to be elected for a one-year term by the vote of the majority of the voting power of the voting stock outstanding as of the record date and voted with respect to the director. A majority of the votes cast means that the voting power of the stock voted “FOR” a director must exceed the voting power of the stock voted “AGAINST” that director. In a contested election, a situation in which the number of nominees exceeds the number of directors to be elected as of a date that is 14 days in advance of the date of filing of the definitive proxy statement, the standard for election of

 

 

 

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directors would be a plurality of the voting power of the stock represented in person or by proxy at any such meeting and entitled to vote on the election of directors. A plurality means that the nominees receiving the highest percentage of voting power of the stock would be elected. If a nominee who is serving as a director is not elected at this annual meeting of stockholders, under Delaware law the director would continue to serve on the Board as a “holdover director.” However, under our Bylaws, any director who fails to be elected must offer to tender his or her resignation to the Board. The HRNC will then make a recommendation to the Board whether to accept or reject the resignation, or whether other action should be taken. The Board will act on the HRNC’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date the election results are certified. The director who tenders his or her resignation will not participate in the Board’s decision. If a nominee who was not already serving as a director is not elected at the annual meeting of stockholders, under Delaware law that nominee would not become a director and would not serve on the Board as a “holdover director.”

Hedging.    The Company’s insider trading policy prohibits the Company’s employees, including its executive officers and directors, from pledging the Company’s securities or engaging in certain forms of hedging or short-term speculative trading of the Company’s securities, including, without limitation, short sales or put or call options involving the Company’s securities. We also prohibit certain employees, officers and directors from pledging MoneyGram securities as collateral for loans (including margin loans).

 


 

 

 

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PROPOSAL 1: ELECTION OF DIRECTORS

Director Nominees—Qualifications and Background

The following individuals are nominated as directors for terms expiring at the 2021 annual meeting of stockholders: Ms. Vaughan, Messrs. Clark, Dahir, Holmes, Rafferty and Turner and Amb. Garza. Each of these individuals is currently serving as a director of the Company. Each of the nominees has consented to being named in this proxy statement and to serve as a director if elected. Each nominee elected as a director will continue in office until his or her successor has been elected and qualified or until his or her death, resignation or retirement. If any nominee is unable to serve, proxies will be voted in favor of the remaining nominees and may be voted for another person nominated by the Board. In making its recommendation to the Board for a slate of

directors for election by the Company’s stockholders, the HRNC considered the criteria described in “Board of Directors and Governance—Director Nominee Criteria and Process” in this proxy statement. The biographies of each of the director nominees below contain information regarding age, the year they first became directors, business experience, other public company directorships held currently or at any time during the last five years, involvement in certain legal or administrative proceedings, if applicable, and the experience, qualifications, attributes or skills that caused the HRNC to determine that they should serve as directors of the Company.

 

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J. Coley Clark

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Age: 74

 

Director since: 2010

 

Other Directorships:

Exela Technologies, Inc.

 

 

 

Mr. Clark is the retired Chief Executive Officer and Chairman of the Board of BancTec, Inc., a global provider of document and payment processing solutions. Prior to his retirement in December 2016, he was Co-Chairman of the Board (from 2014 to December 2016) and Chairman of the Board and Chief Executive Officer of BancTec, Inc. (from September 2004 to 2014). In 2004, Mr. Clark retired from Electronic Data Systems Corporation, or EDS, an outsourcing services company that was acquired by Hewlett-Packard in 2008, as Senior Vice President and head of the Financial and Transportation Industry Group. He joined EDS in 1971 in the Systems Engineering Development Program and progressed through a variety of technical, sales and management roles related to the financial and insurance industries. He assumed responsibility for the Financial Industry Group in 1986 and was named a corporate officer in 1989. Mr. Clark was appointed a Senior Vice President in 1996 and served as a member of the Global Operations Council at EDS, which was the senior management group within the company. In addition, Mr. Clark served three years in the U.S. Army, attaining the rank of Captain, and served as a company commander in Europe and Southeast Asia.

 

Mr. Clark has been a director of Exela Technologies, Inc. since December 2019, and currently chairs its Compensation Committee and serves on its Audit and Nominating and Corporate Governance Committees.

 

Director Criteria:

Mr. Clark brings over 30 years of experience in the financial industry to the Board. Through his position as Chairman and Chief Executive Officer of BancTec, Inc. and his numerous positions at EDS, Mr. Clark has demonstrated his strong leadership skills and his ability to understand day-to-day operations, as well as the broader strategic issues facing a public company. In addition, Mr. Clark’s prior service on public company boards and committees provides him with a broad perspective on various governance and other matters.

 

 

 

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       Victor W. Dahir  

 

Mr. Dahir worked for Visa U.S.A. Inc. (now Visa Inc.), a global payment technology company, from 1984 until his retirement in 2005, most recently as Executive Vice President, Finance and Administration and Chief Financial Officer of Inovant LLC, a subsidiary of Visa. He served as the Chief Financial Officer of Visa Inc. from 1991 to 2004 and held other positions of increasing responsibility from 1984 to 1991.

 

Director Criteria:

Mr. Dahir brings over 40 years of finance and accounting experience to the Board, including serving over 15 years as Chief Financial Officer of Visa Inc. Through these years, Mr. Dahir has developed an expertise in financial services and has gained experience in several other areas that are valuable to the Board, including risk management, technology, legal, relationship management and banking regulation.

 

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Age: 74

 

 

Director since: 2010

 

 

Other Directorships:

None

 

 
 

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       Antonio O. Garza  

 

Amb. Garza has served as Counsel in the Mexico City office of White & Case LLP, an international law firm, since 2009. From 2002 to 2009, Amb. Garza was the U.S. Ambassador to Mexico. Prior to that time Amb. Garza served as chairman of the Texas Railroad Commission, having been elected to that statewide office in 1998. Amb. Garza is a past partner at Bracewell & Patterson LLP (now Bracewell) and served as Secretary of State of the State of Texas and Senior Policy Advisor to the Governor of the State of Texas from 1994 to 1997.

 

Amb. Garza currently serves as a director of Kansas City Southern, a railroad company, and Chairman of the Board of Kansas City Southern de México, a subsidiary of Kansas City Southern. Amb. Garza serves on the Board of Trustees of Southern Methodist University. Amb. Garza served as a director of Basic Energy Services, Inc. from 2009 to 2016.

 

Director Criteria:

Amb. Garza brings to the Board an extensive government and regulatory background and deep experience with international business, especially in Mexico and Latin America. Amb. Garza also has valuable perspective balancing management of initiatives to achieve corporate objectives in highly regulated environments both in the U.S. and Mexico.

 

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Age: 60

 

 

Director since: 2012

 

 

Other Directorships:

Kansas City Southern

 

 

.

 

 

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       W. Alexander Holmes  

 

Mr. Holmes has served as CEO of the Company since January 1, 2016 and Chairman of the Board since February 2, 2018. Prior to that, Mr. Holmes was Executive Vice President, CFO and Chief Operating Officer of the Company since February 2014 and Executive Vice President and CFO since March 2012. He joined the Company in 2009 as Senior Vice President of Corporate Strategy and Investor Relations. From 2003 to 2009, Mr. Holmes served in a variety of positions at First Data Corporation, including chief of staff to the Chief Executive Officer, Director of Investor Relations and Senior Vice President of Global Sourcing & Strategic Initiatives. From 2002 to 2003, he managed Western Union’s Benelux region from its offices in Amsterdam.

 

Director Criteria:

Mr. Holmes leads the Company as the CEO and brings to the Board extensive knowledge of the Company and its strategy gained through his demonstrated leadership and performance in all aspects of our business. Through his numerous executive positions at the Company and in other roles in the payment services industry, Mr. Holmes has experience in business operations, finance, international business and strategy development.

 

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Age: 45

 

 

Director since: 2015

 

 

Other Directorships:

None

 

 
 

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       Michael P. Rafferty  

 

Mr. Rafferty was a member of Ernst & Young LLP, a global public accounting firm, from 1975 until his retirement in 2013. He was admitted as a Partner of Ernst & Young LLP in 1988 and served as the Audit Practice Leader for the Southwest Region from 2004 until 2013. During his career with Ernst & Young LLP, he primarily served clients in the financial services and healthcare industries. Mr. Rafferty is a Certified Public Accountant licensed in Texas.

 

Mr. Rafferty currently serves as a director and chairman of the audit committee of Triumph Bancorp, Inc., a publicly-traded financial holding company with a diversified line of community banking and commercial finance activities.

 

Director Criteria:

Mr. Rafferty brings extensive financial and accounting knowledge and experience in the financial services industry to the Board as a result of his nearly 40-year tenure with Ernst & Young LLP, current service as a director and chairman of the audit committee of another public company and background as a Certified Public Accountant.

 

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Age: 65

 

 

Director since: March 2016

 

 

Other Directorships:

Triumph Bancorp, Inc.

 

 
 

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       W. Bruce Turner  

 

Mr. Turner served as the Chief Executive Officer of Lottomatica S.p.A., a global lottery operations and technology services company, from 2006 to 2008. From 2002 to 2006, he served as Chief Executive Officer, as well as other executive roles, of GTECH Holdings Corporation, a global technology services company in the government regulated lottery industry, and now a subsidiary of Lottomatica. From 2001 to 2002, Mr. Turner served as Chairman of GTECH and from 2000 to 2001, he served as Chairman and Acting Chief Executive Officer. Prior to joining GTECH, Mr. Turner was the Managing Director, Gaming Equity Research, of Salomon Smith Barney Inc. from 1993 to 1999.

 

Director Criteria:

Mr. Turner brings significant leadership experience, financial acumen and regulatory experience to the Board that he gained through the numerous executive positions that he has held throughout the years, including serving as chairman of the board and chief executive officer of a public company. Mr. Turner also has substantial public company board and committee experience, through which he has handled a variety of governance, audit, regulatory and international issues. From this experience, Mr. Turner has been able to provide the Board with a diverse perspective and valuable insights.

 

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Age: 60

 

 

Director since: 2010

 

 

Other Directorships:

None

 

 
 

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       Peggy Vaughan  

 

Ms. Vaughan currently advises portfolio companies in technology, life sciences, consumer goods, financial services and media industries, and also serves on the advisory committee for TWV Capital Management, LLC. From 1979 to 2001, Ms. Vaughan held various consulting positions of increasing responsibility with PricewaterhouseCoopers (“PwC”), becoming a partner in 1988 and serving on the PwC U.S. Board of Partners and Global Oversight Board. Following the acquisition of PwC Consulting by IBM in 2002, Ms. Vaughan served as a member of the Global Management Board with responsibility for the integration of consulting practices and also served as the global leader of consulting services lines.

 

Director Criteria:

Ms. Vaughan’s experience includes more than 25 years leading large-scale strategic, operational improvement, restructuring, technology and change management engagements. Her expertise includes information technology governance, digital technology, mergers and acquisitions and transaction integration, business strategy and operational management processes for industries such as energy, high technology, consumer products, financial services and telecommunications.

 

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Age: 66

 

 

Director since: 2014

 

 

Other Directorships:

None

 

 
 

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Director Compensation

The HRNC is responsible for reviewing the total compensation of non-employee directors, including cash and equity compensation, and, from time to time, recommending adjustments to such compensation, as appropriate, to the Board. For 2019, non-employee directors of MoneyGram (other than the THL Board Representatives) received compensation in the form of annual cash and equity retainers. While MoneyGram does not pay meeting fees, the Company does reimburse all of its directors for reasonable out-of-pocket expenses incurred in connection with a director’s Board service.

MoneyGram’s philosophy for non-employee director compensation is to provide competitive compensation, both cash and equity, to ensure the Company’s ability to attract and retain highly-qualified individuals to serve on our Board. For 2019, on the basis of a competitive analysis undertaken by LB&Co., the HRNC’s current independent consultant, non-employee directors (other than the Board Representatives) received the following compensation, which has remained the same since 2017:

 

   

Each Committee Chair received an annual cash retainer of $20,000.

 

   

Each non-employee director who was not a Committee Chair, but who served on two Committees of the Board, received an annual multiple committee service cash retainer of $10,000.

 

   

Each non-employee director also received a cash retainer of $100,000, paid in arrears in four equal installments on the first business day following each calendar quarter.

 

   

The annual equity retainer for non-employee directors was granted as restricted stock units, or RSUs, having a fair market valuation of approximately $125,000 at the time of grant, rounded up to the next whole share in order to avoid the issuance of fractional shares. Annual equity retainers for non-employee directors are granted each year on the date of the annual stockholders’ meeting. These RSUs vest one year from the date of grant. Directors may elect to defer the settlement date of the RSUs subject to such award until following such director’s separation from service on our Board.

The following table sets forth information on the compensation of MoneyGram’s non-employee directors for the fiscal year ended December 31, 2019. Mr. Holmes was compensated only in his capacity as an executive officer of the Company, and did not receive any additional compensation for his service as a director. The total compensation provided to Mr. Holmes for service during 2019 is set forth in the Summary Compensation Table.

 

NON-EMPLOYEE

DIRECTOR

  

FEES EARNED

OR PAID

IN CASH

    

STOCK

AWARDS

(1)

     TOTAL  

J. Coley Clark

     $120,000        $125,002      $ 245,002  

Victor W. Dahir

     $120,000        $125,002      $ 245,002  

Antonio O. Garza

     $120,000        $125,002      $ 245,002  

Seth W. Lawry(2)

                    

Michael P. Rafferty

     $100,000        $125,002      $ 225,002  

Ganesh B. Rao(2)

                    

W. Bruce Turner

     $110,000        $125,002      $ 235,002  

Peggy Vaughan

     $100,000        $125,002      $ 225,002  

 

(1)

In 2019, each of our non-employee directors (other than the Board Representatives) received an equity grant of 58,963 RSUs, which had a grant date fair value, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC 718”), of approximately $125,000 (rounded up to the next whole share in order to avoid the issuance of fractional shares) for Board service. These grants, which were made on May 9, 2019, will vest in full on the first anniversary of the date of grant. Ms. Vaughan elected to defer settlement of these RSUs until following separation from service on our Board. The grant date fair values of the RSUs reported above have been determined based on the assumptions and methodologies set forth in Note 12 — Stock-Based Compensation of the Notes to the Consolidated Financial Statements in our 2019 Annual Report on Form 10-K. As of December 31, 2019, each of our non-employee directors (other than the Board Representatives) held 58,963 outstanding, unvested RSUs.

 

(2)

Board Representatives’ Compensation:    THL agreed to waive any compensation for its Board Representatives.

Director Stock Ownership Guidelines

The Board has adopted Stock Ownership Guidelines that require each non-employee director to own equity at least equal in value to three times the amount of the annual cash retainer payable to non-employee directors.

 


 

 

 

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Directors are expected to achieve these ownership levels within five years of their election to the Board. To determine the value of each director’s equity ownership, and for the purposes of satisfying the ownership guidelines, the following forms of equity will be included in the value calculation: shares beneficially owned by the incumbent, his or her spouse and/or minor children, whether owned outright or in trust; and any time-based restricted stock or RSUs. As of the date of this proxy statement, all directors have met their ownership guidelines.

Board Voting Recommendation

The Board unanimously recommends to the stockholders that they vote “FOR” the election of each director nominee.

PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2020

The Audit Committee has selected KPMG as the independent registered public accounting firm to audit MoneyGram’s books and accounts for the fiscal year ending December 31, 2020. KPMG has audited the Company’s books and accounts since 2016. Representatives of KPMG are expected to be present at the meeting and will have the opportunity to make a statement and to respond to appropriate questions. Stockholder

ratification of the appointment of KPMG as our independent registered public accounting firm is not required by our Bylaws or our other applicable governing document or regulations. However, the Board is submitting the appointment of KPMG to the stockholders for ratification as a matter of good corporate practice. If this appointment is not ratified by our stockholders, the Audit Committee will reconsider its selection. Even if the appointment is ratified, the Audit Committee, which is solely responsible for appointing and terminating our independent registered public accounting firm, may in its discretion direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interest of MoneyGram and its stockholders.

Independent Registered Public Accounting Firm Fees

Fees for professional services provided by KPMG for fiscal years 2019 and 2018, including related expenses, are as follows (in millions):

 

     KPMG
2019
     KPMG
2018
 

Audit fees(1)

     $4.0        $3.4  

Audit-related fees(2)

     $0.2        $0.5  

Total fees

     $4.2        $3.9  

 

(1)

Audit fees for 2019 and 2018 include the audit of MoneyGram’s consolidated financial statements, including quarterly reviews, the audit of management’s assessment of the design and effectiveness of MoneyGram’s internal control over financial reporting, international statutory audits and the separate audit of the financial statements of our subsidiary MoneyGram Payment Systems, Inc., as required for compliance and regulatory purposes.

 

(2)

Audit-related fees for 2019 and 2018 include professional fees for regulatory compliance filings in certain countries, reviews and evaluations of new regulatory pronouncements and two audits performed in accordance with Statement on Standards for Attestation Engagements (SSAE) No. 16, Reporting on Controls at a Service Organization. The SSAE 16 audits encompass internal controls for the Company’s general controls over information technology and for official check processing and electronic payments services.

Audit Committee Approval of Audit and Non-Audit Services

The Audit Committee pre-approves all audit, audit-related and permitted non-audit services provided by the independent registered public accounting firm, including the fees and terms for those services. The Audit Committee has adopted a policy and procedures governing the pre-approval process for audit, audit-related and permitted non-audit services. The Audit Committee pre-approves audit and audit-related services in accordance with its review and approval of the engagement letter and annual service plan with the independent registered public accounting firm. Tax consultation and compliance services are considered by the Audit Committee on a project-by-project basis. Non-audit and other services will be considered by the Audit Committee for pre-approval based on business purpose, reasonableness of estimated fees and the potential impact on the firm’s independence. The Chair of the Audit Committee is authorized to grant pre-approval of audit, audit-related or permissible non-audit services on behalf of the Audit Committee and is required to review such pre-approvals with the full Audit Committee at its next meeting.

Board Voting Recommendation

The Board unanimously recommends to the stockholders that they vote “FOR” the ratification of the appointment of KPMG as our independent registered public accounting firm.

 

 

 

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AUDIT COMMITTEE REPORT

The Audit Committee operates under a written charter adopted by the Board, which is evaluated annually. The charter of the Audit Committee is available in the Investor Relations section of the Company’s website at ir.moneygram.com. The Audit Committee selects, evaluates and, where deemed appropriate, replaces the Company’s independent registered public accounting firm. The Audit Committee is involved in the selection of the lead audit partner. The Audit Committee has oversight of, and pre-approves, all audit services, engagement fees and terms and all permitted non-audit services of the independent registered public accounting firm. The Audit Committee believes the retention of KPMG as the Company’s independent registered public accounting firm is in the best interest of the Company and its stockholders. KPMG has served as the Company’s independent auditor since 2016.

Management is responsible for the Company’s internal controls, internal audit and the financial reporting process. KPMG, as the Company’s independent registered public accounting firm, is responsible for expressing opinions on the conformity of the Company’s consolidated financial statements with U.S. generally accepted accounting principles and on the Company’s internal control over financial reporting. The Audit Committee’s responsibility is to monitor, oversee and review these processes.

During 2019, the Audit Committee reviewed the Company’s quarterly earnings and related press releases and management’s discussion and analysis of financial condition and results of operation for inclusion in the Company’s quarterly reports on Form 10-Q and annual report on Form 10-K, in each case prior to issuance. The Audit Committee also reviewed and discussed with management and KPMG the audited financial statements for fiscal 2019 and KPMG’s evaluation of the Company’s internal control over financial reporting. Management represented to the Audit Committee, and KPMG concurred, that the Company’s consolidated financial statements for fiscal 2019 were prepared in accordance with U.S. generally accepted accounting principles, and the Audit Committee discussed the consolidated financial statements with KPMG. The Audit Committee discussed with KPMG matters required to be discussed by Public Company Accounting Oversight Board (“PCAOB”) standards, including those required by Auditing Standard No. 1301, Communications with Audit Committees.

In addition, the Audit Committee has received the written disclosures and the letter from KPMG required by applicable requirements of the PCAOB regarding KPMG’s communications with the Audit Committee concerning independence, and has discussed with KPMG its independence and considered non-audit fees and services in assessing KPMG’s independence.

Based upon the Audit Committee’s review and discussions set forth above, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in the 2019 Annual Report on Form 10-K for the fiscal year ended December 31, 2019, for filing with the SEC.

Respectfully submitted,

Victor W. Dahir (Chair)

Michael P. Rafferty

W. Bruce Turner

Peggy Vaughan

 


 

 

 

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PROPOSAL 3: ADVISORY RESOLUTION TO APPROVE OUR EXECUTIVE COMPENSATION

We are asking stockholders to approve an advisory resolution (commonly referred to as a “Say-on-Pay” resolution) on the Company’s executive compensation as reported in this proxy statement.

We encourage stockholders to read the Compensation Discussion and Analysis section of this proxy statement, which describes how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and other related compensation tables and narrative, which provide detailed information on the compensation of our named executive officers. The HRNC and the Board believe that the policies and procedures articulated in the Compensation Discussion and Analysis are effective in achieving our goals and that the compensation of our named executive officers reported in this proxy statement has contributed to the Company’s recent and long-term success.

At our annual meeting of stockholders in June 2017, we conducted a non-binding advisory vote on the frequency of future say-on-pay votes (a “say-on-frequency” vote), and approximately 71% of votes were cast in favor of the Company holding a say-on-pay vote once every three years. Accordingly, we plan to hold our next say-on-pay advisory vote at the Company’s 2023 annual meeting of stockholders. In accordance with this stockholder vote and Section 14A of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and as a matter of good corporate governance, we are asking stockholders to approve the following advisory resolution at the 2020 Annual Meeting of Stockholders:

RESOLVED, that the stockholders of MoneyGram International, Inc. approve, on an advisory basis, the compensation of the Company’s named executive officers disclosed in the Compensation Discussion and Analysis, the compensation tables and accompanying notes and narrative disclosures in the proxy statement for the Company’s 2020 Annual Meeting of Stockholders.

This advisory Say-on-Pay resolution is non-binding on the Board. Although non-binding, the Board and the HRNC will review and consider the voting results when making future decisions regarding our executive compensation program.

 

 

 

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis, or CD&A, provides information on our executive compensation program and the amounts shown in the executive compensation tables that follow. In this proxy statement, the term “NEOs” means “Named Executive Officers.” Our NEOs, who are named in the executive compensation tables of this proxy statement, are listed below:

 

Name

   Title and Position

W. Alexander Holmes

   Chairman and CEO

Lawrence Angelilli

   Chief Financial Officer

Kamila K. Chytil

   Chief Operating Officer

Grant Lines

   Chief Revenue Officer

Andres Villareal

   Chief Compliance Officer

Joann Chatfield

   Former Chief Marketing Officer

Laura Gardiner

   Former Chief Human Resource Officer

Overview of Our Compensation Philosophy

Our executive compensation program is designed to attract, motivate and retain top executive and managerial talent, and to reward our executives and managers for delivering results that are expected to build sustainable long-term value for our stockholders. The overall program is designed to be competitive with similar companies on the basis of industry focus, scope of operations and size, as well as the competitive marketplace for talent. We have created a compensation program that includes short-term and long-term components, cash and equity elements and fixed and performance-based payments which we believe:

 

   

Supports our performance-based approach to compensation to foster a goal-oriented and highly-motivated management team;

 

   

Provides an incentive for retention of key management who are critical to the success of the long-term investments we are making in our business and our future growth initiatives; and

 

   

Improves organizational excellence and aligns our executives’ objectives with those of our stockholders.

Based on this philosophy, we give substantial weight to performance-based compensation by making a significant portion of our executive officers’ total compensation “at-risk” and based on the achievement of our corporate goals and the value of our stock price, which we believe aligns our executive officers’ interests with those of our stockholders. The details of our current executive compensation programs are set forth later in this CD&A.

Overview of Our Business

MoneyGram is a global leader in cross-border peer-to-peer (“P2P”) payments and money transfers. Our consumer-centric capabilities enable the quick and affordable transfer of money to family and friends in approximately 200 countries and territories, with over 67 countries now digitally-enabled. The innovative MoneyGram platform leverages its leading distribution network, global financial settlement engine, cloud-based infrastructure with integrated APIs, and its unparalleled compliance program to enable seamless and secure transfers around the world. Whether through our mobile application, moneygram.com, integration with mobile wallets, a kiosk, or any one of the more than 350,000 agent locations around the globe, we connect consumers in any way that is convenient for them. Historically, our primary customers are persons who may not be fully served by other financial institutions, which we refer to as unbanked or underbanked consumers. As an alternative financial services company, we provide these individuals with essential services to help them meet the financial demands of their daily lives. The World Bank, a key source of industry analysis for cross-border remittance data, estimates that 1.7 billion adults are unbanked and 2020 global remittances will reach approximately $739 billion, based on 2019 global data. Both our walk-in channel centered around our global distribution network and our

 


 

 

 

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newer direct-to-consumer digital channel enable the Company to serve the entire remittance market. Given strong mobile P2P market growth rates, our direct-to-consumer digital business is a growth engine for the Company as our digital capabilities enable us to serve a new customer segment of primarily younger, banked consumers who utilize our platform to transfer money around the world.

2019 Performance Highlights

Fiscal year 2019 was a pivotal year for us as we continued to execute our digital transformation and deliver a differentiated experience to our customers. Throughout the year we launched innovative product solutions, invested in new technology, renewed key partner relationships, led the industry in consumer protection and re-established our competitive position in the market. Our direct-to-consumer digital business achieved strong growth rates and international markets continued to outperform, which enabled us to return to transaction growth in the month of December. Key performance highlights in 2019 include:

 

   

Total revenue of $1,285.1 million declined 11% on a reported basis and 10% on a constant currency basis compared to 2018. Revenue excludes $11.3 million received from Ripple Labs, Inc. pursuant to our commercial agreement with them, which was recorded as a contra expense.

 

   

Global Funds Transfer segment revenue was $1,183.3 million. The segment revenue is composed of money transfer revenue of $1,123.9 million and bill pay revenue of $59.4 million.

 

   

Total operating expenses were $1,233.1 million for the full year, which includes the $11.3 million benefit from Ripple.

 

   

Net loss was $60.3 million compared with $24.0 million in 2018. The year-over-year change was primarily due to a $31.3 million non-cash pension settlement charge related to the sale of pension liabilities, $2.4 million of debt extinguishment costs, as well as a $30.0 million merger termination payment received in 2018.

 

   

Adjusted EBITDA was $213.7 million, a 13% decrease on a reported basis and an 11% decrease on a constant currency basis compared to 2018. The decrease is primarily related to the decrease in revenue.

 

   

For the year, diluted loss per share was $0.85 and adjusted diluted income per share was $0.03.

 

   

Adjusted Free Cash Flow was $62.4 million. The $38.6 million decrease from 2018 is composed of lower Adjusted EBITDA and higher cash payments for interest.

The HRNC carefully considered these achievements in order to ensure that our compensation program continues to adequately reflect our compensation principles.

Summary of 2019 Executive Compensation

The following list includes key compensation highlights and decisions for our NEOs in 2019:

 

   

Approximately 86% of total target compensation for 2019, with respect to our CEO, and between approximately 74% and 84% of total target compensation, with respect to our other NEOs, is variable, “at-risk” performance-based compensation tied to objective performance goals.

 

   

Base salaries for four of our NEOs were increased in 2019 to recognize individual performance, the assumption of additional responsibilities and promotions. See “—2019 Compensation Review and Decisions.”

 

   

Annual incentive targets as a percentage of base salary under our Performance Bonus Plan (“PBP”) remained unchanged for 2019, except for Mr. Angelilli and Ms. Chytil, whose target percentages were increased to reflect market conditions, the expansion of responsibilities and Ms. Chytil’s promotion to Chief Operating Officer. See “—2019 Compensation Review and Decisions.”

 

   

Under our annual long-term incentive program, we granted long-term cash and equity awards that link the interests of our executives with those of our stockholders. Long-term award grant values for Messrs. Holmes and Angelilli and Ms. Chytil were increased in 2019 to recognize individual performance, market conditions, expanded duties and Ms. Chytil’s promotion to Chief Operating Officer. For 2019, the long-term incentive awards were composed of 25% time-based RSUs and 75% performance-based cash. See “—2019 Compensation Review and Decisions.”

 

 

* Annex A includes a reconciliation of EBITDA, Adjusted EBITDA and Free Cash Flow to the most directly comparable measures reported under accounting principles generally accepted in the United States (“GAAP”).

 

 

 

 

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Based on the Company’s financial results for 2019, our continuing NEOs earned:

 

   

PBP awards at 83.5% of target, reflecting our performance against challenging overall Company goals based on Total Revenue and Adjusted EBITDA, plus an upward adjustment to arrive at a payout of 90% of target reflecting strong executive performance in a challenging year. See “—2019 Compensation Review and Decisions.”

 

   

Long-term incentive awards at 92% of target, reflecting our performance against challenging overall Company goals based on Total Revenue and Adjusted EBITDA. See “—2019 Compensation Review and Decisions.”

Executive Compensation Philosophy and Program Design

MoneyGram and the Board are committed to ensuring that our executive compensation program is effectively designed to attract, motivate and retain top executive and managerial talent. We give substantial weight to performance-based compensation by making a significant portion of our executive officers’ total compensation “at-risk” and based on the achievement of our corporate goals and the value of our stock price.

Our compensation program has been designed with the following objectives in mind:

Overall Objectives

 

   

Motivate our executives to:

 

   

Perform at a high level with the utmost integrity and accountability.

 

   

Support growth and long-term value creation for our stockholders.

 

   

Align the interests of our executives with those of our stockholders.

 

   

Position the Company to compete effectively in recruiting high-caliber, experienced leaders instrumental to the Company’s long-term success.

 

   

Support the retention of the Company’s executives who are critical to executing the Company’s strategy for value creation.

 

   

Discourage excessive and imprudent risk-taking and encourage legal and regulatory compliance consistent with our business model and strategies.

Pay Mix Objectives

 

   

Pay our employees: (1) competitively relative to the marketplace for talent in which we operate; and (2) equitably relative to one another based on job scope and impact, the capabilities and experience they possess and the performance they demonstrate by:

 

   

Providing a mix of both fixed and variable (“at-risk”) compensation, each of which has a different time horizon and payout form (cash and equity), to retain our key executives and reward the achievement of annual and long-term performance in light of the current stage of the Company’s transformation, industry and regulatory environment.

Pay-For-Performance Objective

 

   

Provide a strong link between pay and performance by:

 

   

Ensuring our compensation programs are consistent with, and supportive of, our short-term and long-term strategic, operating and financial objectives;

 

   

Placing a significant portion of our executives’ compensation at-risk, with payouts dependent on the achievement of both corporate and individual performance goals, which are set annually by the HRNC;

 

   

Encouraging balanced performance by employing multiple performance measures; and

 

   

Applying judgment and reasonable discretion in making compensation decisions to avoid relying solely on formulaic program design, taking into account the current industry and regulatory environment.

 


 

 

 

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Key Features of our Executive Compensation Program

Consistent with our philosophy, it is MoneyGram’s goal to maintain an executive compensation program that is competitive, rooted in the principles of pay-for-performance and motivates our executives to build long-term stockholder value. To this end, the HRNC routinely evaluates our practices and programs with respect to executive compensation in an effort to identify any opportunities for improvement that might exist. The Company’s practices and programs include the following key features, each of which reinforces our executive compensation philosophy and objectives:

 

No Excise Tax

Gross-Ups

   We do not provide excise tax gross-ups.

No Tax Gross-Ups on Perquisites or Benefits

   We do not provide tax gross-ups on perquisites or benefits except in the case of standard relocation benefits and expatriate income tax equalization benefits available to all similarly situated employees.

No Liberal Share

Recycling

   The 2005 Omnibus Incentive Plan, which we refer to as the 2005 Plan, does not allow “liberal share recycling,” or the reuse of those shares withheld in full or partial payment of the exercise price relating to an award or in connection with the satisfaction of tax obligations relating to an award.

Long-Term Incentive Grant Guidelines

   The Company adheres to regular, annual grant guidelines, which guidelines have been reviewed and approved by the HRNC from time to time, but at least annually, as appropriate. It is further anticipated that these grant guidelines will aid the Company in managing the rate at which it issues equity to its executives over the longer-term.

Clawback Policy

   The Company may recover incentive compensation paid to an executive officer if it is later determined that the executive engaged in misconduct, acted in a manner contrary to the Company’s interest or breached a non-competition agreement. The Company has also included in its bonus plan a provision that allows the Company to “recoup” or “clawback” prior bonuses from executives later determined to have contributed to compliance failures. Pursuant to the DPA, our bonus plan provides that certain executives, including the NEOs, who are found to have engaged in any non-compliant acts in any year will forfeit any entitlement to and be ineligible for any annual cash incentive compensation for that year.

Stock Ownership Guidelines

   The Company maintains Stock Ownership Guidelines applicable to executive officers as well as to our non-employee directors. We fundamentally believe that stock ownership guidelines serve to align the interests of management and non-employee directors with those of our stockholders by requiring executives and directors to acquire and maintain a meaningful equity position in the Company, which, in turn, supports the Company’s objective of building long-term stockholder value.

Prohibition on Pledging and Hedging

   The Company’s insider trading policy prohibits the Company’s employees, including its executive officers and directors from pledging the Company’s securities or engaging in certain forms of hedging or short-term speculative trading of the Company’s securities, including, without limitation, short sales or put or call options involving the Company’s securities. We also prohibit employees, officers and directors from pledging MoneyGram securities as collateral for loans (including margin loans).

Significant Portion of Total Compensation is Variable and Performance-Based

   For 2019, approximately 86% of the CEO’s total target compensation, and between approximately 74% and 84% of the total target compensation of the other NEOs was variable and dependent upon performance of both the individual and the Company. The HRNC employs a framework to assess our performance on an absolute basis relative to our goals and objectives, which goals are designed to support our Board-approved business and financial plans; and on our progress against strategic initiatives.

 

 

 

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Maximum Compensation Limits

   All of our incentive plans provide for maximum payout limits or “caps.”

Annual Risk Assessment

   At least annually, the HRNC performs a risk assessment of our executive compensation arrangements to assess the relationship between the Company’s risk management policies and practices and our compensation program and to ensure that our program does not motivate our executives to take excessive or unnecessary risks.

Long-Term Incentive Awards with Performance and Service Based Vesting

   The outstanding long-term incentive awards held by our NEOs include a combination of (i) time-vested RSUs, which promote long-term retention; (ii) performance-based RSUs, which were granted contingently and earned only on the basis of achieving certain performance targets over the specified performance periods; (iii) stock options, which deliver value only to the extent that our stock appreciates in value between the grant and exercise dates, ensuring that our executives benefit only if our stockholders benefit; and (iv) performance-based long-term cash awards.

Snapshot: How Compensation Is Delivered to NEOs (Pay Mix)

Total direct compensation of our NEOs for 2019 is composed of the following:

 

CORE

COMPENSATION

ELEMENT

   UNDERLYING PRINCIPLE    DESCRIPTION
Base Salary    To provide a competitive level of fixed compensation that serves to attract and retain high-caliber talent and is predicated on responsibility, skills and experience.    Base salaries are generally reviewed annually and may be modified on the basis of merit, promotion, internal equity considerations and/or market adjustments.

Annual Cash

Incentive Award

 

  

To reward achievement of corporate, business unit (where applicable) and individual NEO goals and contributions to the Company.

  

Drive Company and business unit results. Based on objective performance metrics, but also allows the HRNC to apply discretion in considering quantitative and qualitative performance.

Long-Term

Incentive Award

  

To promote the recruitment and retention of our NEOs, to reward performance that drives stockholder value creation and to align the interests of our management team with those of our stockholders.

  

Drive Company performance and align interests of NEOs with those of stockholders. In 2019, long-term incentive awards were delivered to our NEOs in a combination of time-vested RSUs and performance-based cash awards.

Role of the Human Resources and Nominating Committee

Structure of the HRNC:    Currently, the HRNC consists of three members of the Board, all of whom qualify as independent under Nasdaq listing standards, including the Chairman of the HRNC. In 2019, the HRNC held seven meetings, each of which ended with an executive session without management present.

Decision Making:    The primary goal of the HRNC is to assist the Board in fulfilling its oversight responsibilities related to setting, monitoring and implementing the Company’s compensation philosophy, strategy and programs. In discharging its duties, the HRNC works very closely with its independent compensation consultant, LB&Co., and management to examine pay and performance matters throughout the year. For 2019, in determining the compensation of the NEOs other than the CEO, the HRNC considered the recommendations of the CEO, which are based primarily on Company and individual performance as well as competitive market data.

 


 

 

 

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The HRNC’s Performance Review & Measurement Process:

 

2019

  

2020

Q1: Goal Setting

 

  

Q2/Q3: Progress Assessment

 

  

Q4: Preliminary Perf. Results

 

  

Q1: Perf. Assessment & TDC

 

 

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Responsibilities:    The HRNC has responsibility for the matters identified below in regard to MoneyGram’s compensation program and policies, and discharges its duties annually, carefully considering each of the tasks set forth below.

 

Executive Compensation Matters

  

•  Assisting the Board in fulfilling its oversight responsibilities related to setting, implementing and monitoring the Company’s overall compensation philosophy, strategy and program.

 

•  Setting the corporate goals and objectives for our CEO and for reviewing, at least annually, our CEO’s performance in light of those goals and objectives.

 

•  Reviewing and approving the compensation (i.e. base salaries, annual incentives and long-term incentives) of our NEOs (other than our CEO, whose compensation is approved by the non-employee members of the Board upon the recommendation of the HRNC), including individual arrangements, and any special or supplemental benefits.

 

•  Recommending for approval by the non-employee members of the Board, the compensation of the CEO. The CEO is not present during voting or deliberations on his compensation.

 

•  Reviewing, designing and recommending the adoption of all executive compensation plans and administering those plans, as appropriate.

 

•  Reviewing and approving grants of equity compensation to all employees and establishing the policies and procedures governing those grants; the HRNC has delegated to our Chairman and CEO the authority to approve equity-based awards to non-executive officers. The HRNC will obtain approval from the non-employee members of the Board for any equity grants to our CEO.

 

•  Assisting in the preparation of and reviewing the Company’s disclosures made in the CD&A, and making a recommendation to the Board regarding its inclusion in the Company’s proxy statement and Annual Report on Form 10-K to be filed with the SEC.

 

•  Reviewing and recommending to the Board the adoption of any employee benefit plans including, when applicable, any amendments to such plans.

 

•  Establishing performance goals for performance-based compensation awards.

 

•  Approving any discretionary contributions, if any, to 401(k) plan or similar qualified pension plans.

 

•  Reviewing the Company’s management succession plans for key executive positions.

 

•  Reviewing and approving all employment agreements, severance agreements, change in control provisions and agreements and any special/supplemental benefits to our NEOs.

 

 

 

 

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Executive Compensation Matters

  

•  Determining the appropriateness of the stock ownership guidelines for our CEO and other NEOs and directors, and for monitoring compliance with any such guidelines.

 

•  Reviewing the risk assessment of the Company’s compensation arrangements and discussing, at least annually, the relationship between risk management policies and practices and executive compensation at MoneyGram.

 

•  Advising the Board regarding the say-on-pay and say-on-frequency advisory votes required under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”), and considering the results of the most recent vote on executive compensation when determining compensation policy and making compensation decisions.

 

•  Retaining and obtaining the advice of one or more compensation consultants as it deems necessary to discharge its duties and responsibilities, evaluating any conflicts of interest that may exist in accordance with Regulation S-K and considering the independence of any consultants chosen, as required under Dodd-Frank and applicable Nasdaq listing requirements.

Corporate Governance Matters

  

•  Assisting the full Board in its efforts to identify prospective Board members; retaining or obtaining the advice of any search firm as it deems necessary to aid in the identification of director candidates.

 

•  Recommending to the Board those director nominees for election by the stockholders at the annual stockholders’ meeting.

 

•  Developing and recommending for adoption (or revision) the Company’s Corporate Governance Guidelines.

 

•  Assisting the Board in fulfilling its obligations relating to the compensation of the Company’s directors.

 

•  Leading the Board in its annual review/self-appraisal, including conducting the HRNC self-appraisal.

 

•  Reviewing and making recommendations regarding the composition and size of the Board.

 

•  Recommending to the full Board the chairpersons and membership of each Committee of the Board.

 

•  Making regular reports to the Board on all matters concerning executive compensation and corporate governance.

Other

Matters

  

•  Reviewing and assessing the adequacy of the HRNC charter at least annually, and recommending any changes to the Board for approval.

 

•  Performing other such duties, and making such reports, as the Board may reasonably request from time to time, or as the HRNC may deem appropriate.

 

•  Forming and delegating authority to subcommittees when appropriate and unanimously approved by the HRNC.

The Charter of the HRNC is available online at: http://ir.moneygram.com/corporate-governance.cfm.

Performance Review:    In 2019, the HRNC’s review process considered a variety of factors in determining base salary levels, annual incentive opportunities and long-term incentive opportunities for incumbent executives, including, among others, performance, potential, position, scope and market rates.

 


 

 

 

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Role of the Compensation Consultant

The HRNC engaged LB&Co. for 2019 as MoneyGram’s independent compensation consultant to assist and advise the HRNC on all aspects of the Company’s executive and director compensation programs and corporate governance. LB&Co. attended or participated by teleconference in all meetings of the HRNC in 2019. MoneyGram paid fees of approximately $264,000 to LB&Co. in 2019 relating to these matters, and LB&Co. provided no other services to MoneyGram. The services that LB&Co. provides to the HRNC include:

 

   

Reviewing and advising regarding the Company’s compensation philosophy, strategy and program.

 

   

Providing advice and counsel on best practices in compensation and corporate governance, and keeping the Company and the HRNC apprised of trends, developments, legislation and regulations affecting executive and director compensation.

 

   

Providing and analyzing competitive market compensation data.

 

   

Analyzing the effectiveness of executive compensation programs and making recommendations, as appropriate.

 

   

Assisting in the design and negotiation of executive employment agreements, as applicable.

 

   

Analyzing the appropriateness of the Compensation Peer Group.

 

   

Conducting a risk assessment of the Company’s incentive compensation plans and programs at least annually and making recommendations, as appropriate.

 

   

Evaluating how well our compensation programs adhere to the philosophies and principles stated in this CD&A.

 

   

Providing advice and counsel on directors’ compensation.

Compensation Consultant Conflict Of Interest Assessment:     As required by rules adopted by the SEC under Dodd-Frank, the HRNC assessed all relevant factors and determined that the work of LB&Co. did not raise any conflict of interest in 2019. In making this determination, the HRNC considered all relevant factors, including those set forth in Rule 10C-1(b)(4)(i) through (vi) under the Exchange Act.

Role of the CEO

In making determinations regarding compensation for our NEOs other than the CEO, the HRNC considers the recommendations of the CEO and the input received from LB&Co. The CEO recommends compensation for NEOs other than the CEO. In making these recommendations, the CEO evaluates the performance of each executive, considers each executive’s responsibilities and compensation in relation to other officers of the Company, and considers publicly available information regarding the competitive marketplace for talent, survey data and other information provided to him by the Company and information provided to the HRNC by LB&Co.

The HRNC reviews and recommends to the non-employee members of the Board the compensation of the CEO without management input, and is assisted in this determination by LB&Co. Compensation decisions relating to the CEO are approved by the non-employee members of the Board, after considering the recommendation of the HRNC. The CEO is not present during voting or deliberations on his compensation.

Mitigation of Excessive Risk-Taking

The HRNC oversees the Company’s executive compensation program, including the design of the program and whether it appropriately balances risk taking and short-term and long-term incentives. The HRNC meets periodically to review the risk assessment of the Company’s compensation arrangements, and reviews and discusses (at least annually) the relationship between risk management policies and practices and compensation. Key factors in mitigating any risks associated with the Company’s compensation programs and practices are outlined below. The HRNC may also consider recommendations from the Audit Committee regarding risks and risk mitigation.

Balanced Weighting of Performance Metrics in Incentive Compensation Programs

The PBP, also referred to herein as the annual cash incentive plan, and the 2005 Plan use a balanced weighting of multiple performance measures and metrics to determine incentive payouts to our executives and managers. This discourages excessive risk-taking by eliminating any inducement to over-emphasize one goal to the detriment of others. The awards to our NEOs under the annual cash incentive plan and the 2005 Plan are discussed in detail below under “Annual Cash Incentive Plan” and “Long-Term Incentives.”

 

 

 

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Stock Ownership Guidelines for Executives

The Company believes that ownership guidelines serve to align the interests of management with those of stockholders by requiring executives to acquire and maintain a meaningful equity position in the Company, which, in turn, supports the Company’s objective of building long-term stockholder value. Furthermore, the Company believes that ownership of equity mitigates the risk of executive actions that could potentially damage or destroy equity value.

Our long-standing stock ownership guidelines were established for executive officers to encourage them to have a long-term equity stake in MoneyGram, align their interests with stockholders and mitigate potential compensation-related risk. The guidelines provide that each executive officer must hold a multiple of his or her annual base salary in MoneyGram stock as reflected below:

 

POSITION

   OWNERSHIP GUIDELINE

CEO

   5x Base Salary

Executive Leadership Team Members (which includes all other NEOs)

   3x Base Salary

Each covered officer is expected to achieve these levels of ownership within five years of their first becoming eligible to participate in the 2005 Plan. Additionally, if an executive receives a promotional salary increase during this time, the HRNC, in its discretion, may extend that executive’s time to meet the ownership requirements by one year. Failure to meet or, in certain circumstances, to show sustained progress toward meeting, the above ownership guidelines may result in a reduction in future long-term incentive equity grants, and/or payment of future annual and/or long-term cash incentive payouts in the form of equity, at the discretion of the HRNC.

To determine the value of each officers’ equity ownership, and for the purposes of satisfying the ownership guidelines, the following forms of equity will be included in the value calculation: shares owned by the executive, his or her spouse and/or minor children, whether owned outright or in trust; any time-based restricted stock or RSUs awarded; any performance-based RSUs awarded for which the performance criteria have been achieved; any vested, in-the-money stock options; and any stock held for the incumbent’s benefit in any pension or 401(k) plans. As of the date of this proxy statement, all continuing NEOs have met their guideline.

Policy Regarding Trading in Company Stock; Hedging

We maintain policies and procedures for transactions in the Company’s securities that are designed to ensure compliance with applicable insider trading rules. The Company’s policies and procedures also prohibit all of our employees, officers and directors from purchasing financial instruments, including prepaid variable forward contracts, equity swaps, collars and exchange funds, designed to hedge or offset any decrease in market value of Company securities held by them. We also prohibit certain employees, officers and directors from pledging MoneyGram securities as collateral for loans (including margin loans) and engaging in short-term speculative trading of the Company’s securities, including, without limitation, short sales or put or call options involving the Company’s securities.

Clawback Policy

The Company’s incentive compensation award agreements and annual cash incentive plan provide that the HRNC may seek reimbursement of incentives paid or stock options and restricted stock/RSU proceeds provided to an NEO or other executive if it is later determined that the NEO or other executive engaged in misconduct, acted in a manner contrary to the Company’s interest or breached a non-competition agreement. To date, the HRNC has not exercised this right with respect to any plan award previously paid.

The Company has also adopted a clawback policy, which provides that:

 

   

Under the annual cash incentive plan, the Company may “recoup” or “clawback” prior bonuses from executives later determined to have contributed to compliance failures.

 

   

Certain executives, including the NEOs, who are found to have engaged in any non-compliant acts in any year will forfeit any entitlement to and be ineligible for any annual cash incentive compensation for that year.

 


 

 

 

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Peer Group Selection and Competitive Benchmarking

Our executive compensation program is designed to reward achievement of goals and to attract, retain and motivate our leaders in a competitive talent market. The HRNC examines the executive compensation of a group of peer companies (our “Compensation Peer Group”) to stay current with market pay practices and trends, and to understand the competitiveness of our total compensation and its various elements. The HRNC reviews at least annually the Compensation Peer Group to confirm that it includes companies that are comparable to MoneyGram on the basis of industry focus, scope of operations, size (based on revenues) and the competitive marketplace for talent. We use this data solely for informational purposes and do not target a specific percentile or make significant pay decisions based on market data alone. Although we believe this information can be helpful, we recognize that benchmarking is not always reliable and is subject to significant change from one year to the next—particularly for companies in the financial services industry. As a result, we use both Company and individual performance as primary drivers of pay levels, as opposed to market data.

The HRNC approved a number of changes to the Compensation Peer Group for 2019. In particular, Corelogic, Inc., CURO Group Holdings Corp, Exela Technologies, Inc., Square Inc. and WEX Inc. were added to the peer group and Blackhawk Network Holdings, Inc., Verifone Systems, Inc., Fidelity National Information Systems, Inc., Fiserv, Inc., PayPal Holdings, Inc., and Vantiv, Inc. were removed. Total System Services, Inc. was acquired by Global Payments Inc. in September of 2019 so will not be part of the list for 2020.

The following 14 companies in the table below made up the Compensation Peer Group that was considered by the HRNC in its 2019 compensation decisions.

 

Compensation Peer Group          

ACI Worldwide, Inc.

   Exela Technologies, Inc.    Square,Inc.

Cardtronics, Inc.

   FleetCor Technologies, Inc.    Total System Services, Inc.

Corelogic, Inc.

   Global Payments Inc.    The Western Union Company

CURO Group Holdings Corp

   Green Dot Corporation    WEX Inc.

Euronet Worldwide, Inc.

   Jack Henry & Associates, Inc.   

The HRNC decided upon this peer group after consultation with its compensation consultant and primarily based its decision upon criteria including business alignment, industry relevance and competition for executive talent. While the companies in the Compensation Peer Group are generally larger than we are in terms of market capitalization and revenue, we believe this peer group composition is appropriate in light of the importance we ascribe to providing competitive pay opportunities sufficient to attract and retain the talented executives needed to lead the Company.

CEO Performance and Pay

Under Mr. Holmes’s leadership in 2019, the Company made significant progress toward its long-term goals. The following were some of the significant accomplishments achieved during 2019:

 

   

Achieved total revenue of $1,285.1 million on a reported basis during the year;

 

   

Adjusted EBITDA was $213.7 million, a 13% decrease on a reported basis (see Annex A for information regarding EBITDA and Adjusted EBITDA, including a reconciliation thereof to pre-tax income (loss));

 

   

MoneyGram’s business transformation continued to accelerate, demonstrated by the success of MoneyGram’s direct-to-consumer digital business in addition to continued better-than-expected expense reductions as a result of modernizing and digitizing global operations; and

 

   

MoneyGram continued to launch innovative solutions to improve the customer experience and to lead the evolution of digital P2P payments. Exciting recent launches include the innovative FastSend service enabling customers to send money directly to a phone number. Additionally, MoneyGram continued to expand its strategic partnership with Ripple as the first money transfer company to scale the use of blockchain capabilities.

 

 

 

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The HRNC assessed Mr. Holmes’s 2019 compensation consistent with our overall compensation strategy. In light of the achievements described above, the HRNC believes that the resulting total target compensation of $6.3 million was the appropriate level of compensation for Mr. Holmes during the year. Mr. Holmes’s total target compensation for 2019 was made up of $875,000 in base salary, $1,050,000 in annual cash incentive, and a long-term incentive award with a grant date value of $4,375,000. Approximately 86% of Mr. Holmes’s total target compensation was variable. The following chart shows the target total direct compensation mix for Mr. Holmes’s 2019 compensation.

 

LOGO

2019 Compensation Review and Decisions

As discussed above under “—Peer Group Selection and Competitive Benchmarking,” we base our annual compensation decisions upon Company and individual performance as it relates to our goals and objectives. We believe this approach further strengthens the relationship between pay and performance for our senior executives.

Overview of 2019 Total Direct Compensation for our CEO and our other NEOs

 

COMPENSATION

ELEMENT

   WHAT IT DOES  

HOW IT’S SET/LINKS TO

PERFORMANCE

 

Base Salary

  

 

  Provides competitive fixed compensation

  Balances risk-taking concerns with pay for performance

 

 

  Job scope and impact, experience and capability, market compensation levels

 

Annual Cash Incentive

  

 

  Provides a competitive annual incentive opportunity

  Aligns with individual business unit (where appropriate) and Company performance

 

 

  Payout range: 0%—200% of target

  Based on achievement of financial goals (Adjusted Total Revenue and Adjusted EBITDA)

  Risk/control and compliance goals

  Based on objective performance metrics

 

Time-based RSUs

  

 

  Promotes executive retention

  Aligns executives’ interests with those of stockholders, as value of an executive’s grant increases only if the Company’s stock price increases

 

 

  Vest in three equal installments on each anniversary of the grant date

 

Performance-Based Cash

  

 

  Performance-based vesting aligns executives’ interests with the interests of our stockholders

  Rewards performance that drives stockholder value creation

 

 

  Payout range: 0%—150% of target

  Performance period: 2019

  Targets based 25% on Adjusted Total Revenue and 75% on Adjusted EBITDA

  Vests in three equal installments on each anniversary of the grant date, subject to satisfaction of performance conditions

 


 

 

 

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Base Salary

Base salary decisions for 2019 were determined by the HRNC based on the following factors:

 

   

Recommendations from the CEO (for NEOs other than the CEO);

 

   

Performance achievement (both Company and individual) relative to goals and objectives;

 

   

Scope and impact of each role and changes in job responsibility (in particular with respect to promotional increases);

 

   

Internal pay equity considerations; and

 

   

Peer group data.

Having considered these factors, the HRNC approved the following base salary increases in 2019:

 

               

Base Salary at Year End
(Annualized Rate)

         

NAMED EXECUTIVE

  BASE SALARY
INCREASE (OR
DECREASE)
            2018                     2019             EFFECTIVE DATE   RATIONALE FOR CHANGE

W. Alexander Holmes

    6   $ 50,000     $ 825,000     $ 875,000     January 1, 2019   Market Adjustment

Lawrence Angelilli

        $ 0     $ 425,000     $ 425,000     N/A   N/A

Kamila Chytil

    29   $ 125,000     $ 425,000     $ 550,000     March 23, 2019 and September 30, 2019   Promotion in September 2019 and Market Adjustment in March 2019

Grant Lines

        $ 0     $ 450,000     $ 450,000     N/A   N/A

Andres Villareal

    4   $ 15,000     $ 400,000     $ 415,000     March 23, 2019   Market Adjustment and Performance

JoAnn Chatfield

    8   $ 25,000     $ 325,000     $ 350,000     March 23, 2019   Market Adjustment

Laura Gardiner

        $ 0     $ 350,000     $ 350,000     N/A   N/A

Performance Bonus Plan

The PBP provides for annual cash incentive awards based on overall Company performance and individual performance and contribution. The HRNC sets specific performance objectives for the Company under the annual cash incentive plan.

Award Levels

In February 2019, the HRNC reviewed the annual incentive targets for each NEO to ensure that the Company is competitive under this element of compensation and the only change approved by the HRNC from 2018 annual incentive targets was a 10% increase for Mr. Angelilli in recognition of market data. In September 2019, the HRNC approved an annual incentive target increase for Ms. Chytil in connection with her promotion to Chief Operating Officer, from 80% to 100% of base salary. Consistent with our compensation objectives, as an executive assumes greater responsibility within the Company, a larger portion of his or her compensation is “at-risk” and tied to the achievement of Company and individual performance goals.

In 2019, the HRNC established annual incentive targets for our NEOs as follows:

 

NAMED EXECUTIVE

   ANNUAL INCENTIVE TARGET AS A PERCENT OF
BASE SALARY AS OF:

 

 
   12/31/2018     12/31/2019  

W. Alexander Holmes

     120     120

Lawrence Angelilli

     70     80

Kamila Chytil

     80     100

Grant Lines

     80     80

Andres Villareal

     70     70

Joann Chatfield

     70     70

Laura Gardiner

     70     70

Each NEO’s actual annual cash incentive award for 2019 was based on the Company’s achievement of annual financial results relative to performance objectives established by the HRNC as well as individual performance and contribution to the Company’s overall results (which is reflected in each NEO’s performance rating). In setting these goals, the HRNC considers input from management.

 

 

 

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2019 Performance Objectives

Under the annual cash incentive plan, the HRNC sets specific performance objectives for the Company, as well as threshold, target and maximum payout levels predicated on actual achievement, in accordance with the funding formula set forth below (with straight-line interpolation between levels).

 

     THRESHOLD   TARGET   MAXIMUM

Performance Achievement

       90 %       100 %       115 %

Payout

       50 %       100 %       200 %

For 2019, the HRNC approved Adjusted Total Revenue and Adjusted EBITDA (each as defined below), each weighted equally and each on a constant currency basis, as the performance measures governing annual incentive payouts. In setting these goals, the HRNC considered target Company performance under the challenging board-approved annual operating plan. The targets were designed to be challenging while recognizing business and broader economic uncertainties existing at the time the goals were established, including continued global macroeconomic and consumer headwinds.

 

PERFORMANCE MEASURES
  ($ IN MILLIONS)

   WEIGHT     THRESHOLD      TARGET      MAXIMUM      2019
RESULTS
           2019
PAYOUT
RESULTS BY
MEASURE(1)
 

Adjusted Total Revenue

     50     $1,273.6        $1,415.1        $1,627.4        $1,318.5        (3     65.9

Adjusted EBITDA(2)

     50     $   198.2        $   220.2        $   253.2        $   220.6        (4     101.1

 

(1)

Represents payout (as a percentage of target) on each respective performance measure under application of the funding formula presented above.

 

(2)

Adjusted EBITDA is EBITDA excluding restructuring and reorganization costs, legal and contingent matter costs, compliance enhancement program costs, stock-based, contingent and incentive compensation costs, direct monitor costs, severance and related costs, non-cash pension settlement charge and debt extinguishment costs.

 

(3)

Reflects constant currency Adjusted Total Revenue. Reported total revenue was $1,285.1 million which was adjusted by $22.1 million to reflect the impact from changes in exchange rates and by $11.3 million to reflect a change in the accounting treatment related to the benefit from the commercial transaction with Ripple Labs.

 

(4)

Reflects constant currency Adjusted EBITDA. Reported Adjusted EBITDA was $213.7 million, which was adjusted by $5.6 million to reflect the impact from changes in exchange rates and by $1.3 million to reflect the impact of the discretionary PBP adjustment.

2019 Actual Annual Cash Incentive Payouts

Based on the results achieved and the relative weighting of each performance objective (as shown in the table above), the 2019 level of performance achievement for the annual cash incentive plan pool was 83.5% of target. In recognition of strong performance by our continuing employees during a challenging year, the Board approved a discretionary upward PBP adjustment for continuing employees resulting in a PBP payout of 90% of target for such employees. Each NEO also received an individual performance rating, which served either as a multiplier or a detractor to his or her annual cash incentive payout. In addition to Company performance, each NEO’s performance rating also considers his or her technical and leadership competency and abilities in his or her role. All annual cash incentive payouts were approved by the HRNC.

 

NAMED EXECUTIVE

   PERFORMANCE
RATING
  ANNUAL CASH INCENTIVE AS
A PERCENT OF TARGET(1)

W. Alexander Holmes

       100 %       90 %

Lawrence Angelilli

       100 %       90 %

Kamila Chytil

       100 %       90 %

Grant Lines

       100 %       90 %

Andres Villareal

       100 %       90 %

Joann Chatfield

       85 %       71 %

Laura Gardiner

       85 %       71 %

 

(1)

Represents a percentage comparison between the actual cash incentive amount paid to the NEO and such NEO’s target payout amount.

 


 

 

 

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Long-Term Incentives

Annual Long-Term Incentive Award Guidelines and 2019 Long-Term Incentive Grants

We typically make annual long-term incentive awards to the NEOs each year in order to reward performance that drives stockholder value creation and aligns the interests of our management team with those of our stockholders. Long-term incentive awards are granted under our 2005 Plan, which provides for a variety of different awards, including RSUs and performance awards.

The HRNC regularly reviews the Company’s annual long-term incentive grant guidelines, pursuant to which annual grant multiples are set for the NEOs. The equity grant guidelines for 2019, expressed as a multiple of base salary or as a specific dollar amount, are set forth below. The guidelines for our Chairman and CEO conform to the terms of his amended employment agreement. The guideline range for our other NEOs was expanded in 2018 to recognize the competitive market within which we compete for executive talent and additional responsibilities assumed by our NEOs.

 

LEVEL

   PERCENT
(or dollar amount)
 

Chairman and CEO

     500%  

Other NEOs

   $ 900,000—$1,200,000  

The HRNC determines the allocation between award types and sets the vesting criteria at the time of each grant. For 2019, the HRNC eliminated performance-based RSUs from our annual long-term incentive program and approved the allocation of the value of annual long-term incentive awards to be 75% performance-based cash awards and 25% time-based RSUs. Our decisions relating to equity awards are primarily influenced by the need to recruit and retain certain NEOs as well as to align the interests of the NEOs with those of our stockholders. The performance-vesting criteria for the performance-based cash awards serve to motivate the creation of stockholder value and the vesting criteria for the time-based RSU awards were developed to retain key executives. Time-based RSUs vest in three equal installments on each anniversary of the grant date.

The table below sets forth the total value of performance-based cash awards and total number of time-based RSUs granted to each NEO during 2019 in connection with annual long-term incentive awards:

 

NAMED EXECUTIVE

  

DATE OF

GRANT

    

TOTAL GRANT

DATE VALUE

($)

     AWARD SPLIT AMONG  
   Performance-
Based
Cash
($)
     Time-Based
RSUs (#)
 

W. Alexander Holmes

     2/21/2019        $4,375,000        $3,281,250        441,028  

Lawrence Angelilli

     2/21/2019        $1,200,000        $   900,000        120,968  

Kamila Chytil

     2/21/2019        $1,200,000        $   900,000        120,968  

Grant Lines

     2/21/2019        $1,200,000        $   900,000        120,968  

Andres Villareal

     2/21/2019        $   900,000        $   675,000        90,726  

Joann Chatfield

     2/21/2019        $   900,000        $   675,000        90,726  

Laura Gardiner

     2/21/2019        $   900,000        $   675,000        90,726  

For the performance-based cash awards, the HRNC approved 2019 Adjusted Total Revenue and Adjusted EBITDA (as defined above for the Performance Bonus Plan) as the performance measures, each on a constant currency basis and as provided in the table below.

 

PERFORMANCE MEASURES
  ($ IN MILLIONS)

   WEIGHT     THRESHOLD      TARGET      MAXIMUM      2019
RESULTS
     2019
PAYOUT
RESULTS BY
MEASURE(1)
 

Adjusted Total Revenue

     25     $1,273.6        $1,415.1        $1,627.4        $1,318.5        65.9

Adjusted EBITDA

     75     $   198.2        $   220.2        $   253.2        $   220.6        101.1

 

(1)

Represents payout (as a percentage of target) on each respective performance measure under application of the funding formula presented above.

 

 

 

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Threshold, target and maximum payout levels for the performance-based cash awards are predicated on actual achievement, in accordance with the funding formula set forth below (with straight-line interpolation between levels). Once earned, the performance-based cash awards vest in three equal installments on each anniversary of the grant date, with up to 75% of the awards eligible to vest over such three-year period if the target level of Adjusted EBITDA is achieved for 2019 and up to 25% of the awards eligible to vest over such three-year period if the target level of Adjusted Total Revenue is achieved for 2019.

 

     THRESHOLD   TARGET   MAXIMUM

Performance Achievement

       90 %       100 %       115 %

Payout

       50 %       100 %       150 %

Following the conclusion of the performance period, the HRNC determined that the performance levels were met at a 92% attainment level for the performance-based cash awards granted to each of our NEOs in 2019.

2019 Promotional Long-Term Incentive Grants to Ms. Chytil

In September 2019, the HRNC approved an additional long-term incentive award to Ms. Chytil with an aggregate grant date value of $800,000 in connection with her promotion to Chief Operating Officer. The value approved by the HRNC was selected so that Ms. Chytil’s total long-term incentive awards for 2019 would be in line with the market target LTI award for a chief operating officer. Approximately 75% of the promotional long-term incentive value was granted as a performance-based cash award and 25% was granted as time-based RSUs. The terms applicable to the promotional grants to Ms. Chytil are the same as the respective annual long-term incentive grants, except that the vesting dates for the promotional grants are on the anniversary of the grant date of October 1, 2019.

Other Compensation

In addition to the components of total direct compensation for 2019 described above, a portion of our NEOs’ compensation includes other market competitive, non-variable compensation and benefits. These other compensation and benefits elements aid us in being able to recruit more effectively and to retain highly-qualified executive talent while competing with other companies that offer similar programs.

Retirement Benefits and Deferred Compensation

MoneyGram does not provide any form of pension or deferred compensation, other than a 401(k) plan. The 401(k) plan is the Company’s primary retirement plan for U.S. employees, including NEOs. The 401(k) plan is a defined contribution plan that allows employees whose customary employment is for 1,000 hours or more per year to defer up to 50% of their eligible compensation on a pre-tax or post-tax basis subject to limitations under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). MoneyGram matches 100% of the first three percent and 50% of the next two percent of compensation deferred by an eligible employee. In addition, a discretionary contribution may be granted annually by our Board; however, no discretionary contribution was granted for 2019. Employer contributions are invested according to a participant’s investment election for employee contributions. Employee contributions and the employer match are immediately 100% vested.

Severance Benefits

A discussion of the Company’s severance benefits for the NEOs is set forth below under “Executive Employment Agreements” and “Other Agreements.” Ms. Chatfield and Ms. Gardiner received severance benefits pursuant to these arrangements in connection with their termination of employment in 2020 and 2019, respectively.

Perquisites and Personal Benefits

MoneyGram provides limited perquisites to executive officers on a case-by-case basis. As such, in 2019, Mr. Lines received immigration and continued tax services support due to his permanent transfer to the U.S. from Dubai in 2018 as described in the “2019 Details Behind All Other Compensation Column Table.”

 


 

 

 

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Employment and Other Agreements

Executive Employment Agreements

MoneyGram currently maintains an employment agreement with Mr. Holmes, our CEO. None of our other NEOs has an employment agreement.

Alex Holmes

On March 2, 2018, the Company entered into an amended and restated employment agreement with Mr. Holmes (the “A&R Holmes Employment Agreement”), effective as of January 1, 2018, which amended and restated the original employment agreement with Mr. Holmes, dated July 30, 2015.

The A&R Holmes Employment Agreement provides that Mr. Holmes shall receive an annual base salary of $825,000 during the term of his employment pursuant to such agreement, which amount is subject to annual review and may be increased, but not decreased, without Mr. Holmes’s consent. During the term of his employment pursuant to the A&R Holmes Employment Agreement, Mr. Holmes shall be eligible to participate in the Company’s annual cash incentive plan, and shall be eligible to receive a target annual bonus equal to 120% of his base salary and a maximum annual bonus equal to two times his target bonus if the Company’s performance exceeds targeted levels. Also, during the term of his employment pursuant to the A&R Holmes Employment Agreement, Mr. Holmes shall participate in the 2005 Plan and shall receive an annual grant of equity or equity-based awards with an aggregate grant date fair market value equal to at least five times his annual base salary in effect at the time of grant, if the Company makes grants of such awards to other senior executive officers of the Company.

The A&R Holmes Employment Agreement provides that, during the term of his employment pursuant to such agreement, if Mr. Holmes is terminated without “cause” or resigns for “good reason” (each as defined in the A&R Holmes Employment Agreement), he shall receive, among other accrued benefits, the following: (i) a pro-rata portion of his bonus under the annual cash incentive plan for the fiscal year in which termination occurs, subject to the Company’s actual performance achievement; (ii) an aggregate payment of two times the sum of (a) his annual base salary and (b) his target bonus under the annual cash incentive plan; (iii) continuation of health and life insurance coverage for up to two years; and (iv) with respect to equity or equity-based awards held by Mr. Holmes on the date of termination, continued eligibility to vest on a pro-rata basis based on the Company’s actual performance achievement (for awards subject to performance-based vesting criteria), acceleration of the portion that would have vested on the next regularly-schedule vesting date or, if termination is within forty-five days from the next regularly-scheduled vest date, then acceleration of the portion that would have vested on the next two regularly-scheduled vesting dates (for awards subject to solely time-based vesting criteria) and an extended exercise period for an award of options that is or becomes vested on the date of termination. If Mr. Holmes is terminated during the term of his employment pursuant to the A&R Holmes Employment Agreement due to death or “disability” (as defined in the A&R Holmes Employment Agreement), he shall receive, among other accrued benefits, the payments and benefits described in clause (i) of the preceding sentence.

The A&R Holmes Employment Agreement also provides that if Mr. Holmes’s employment is terminated by the Company without cause or by Mr. Holmes for good reason, in each case, within the 24-month period immediately following a change in control, then, in addition to the payments and benefits described in clauses (i), (ii) and (iii) in the paragraph above, each equity or equity-based award and long-term performance-based cash award held by Mr. Holmes on the date of such termination shall become immediately vested in full on the date of termination (at 100% of the applicable target level in the case of any award then subject to performance-based vesting).

Other Agreements

Employee Trade Secret, Confidential Information and Post-Employment Restriction Agreement

Each of the NEOs, other than Mr. Holmes, whose trade secret, confidentiality and post-employment restriction provisions were included in his employment agreement, has entered into an Employee Trade Secret, Confidential Information and Post-Employment Restriction Agreement. Under these agreements, each NEO agrees to confidentiality and non-disparagement obligations that extend indefinitely. In addition, under these agreements, each NEO agrees to non-competition provisions with respect to certain competing businesses and non-solicitation restrictions with respect to employees and customer relationships for defined periods of time.

 

 

 

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Severance Benefits

The Company maintains severance arrangements for all of its NEOs, the intended benefits of which are to provide financial protection in the event of a termination that could disrupt the careers of the NEOs. The severance benefits allow the NEOs to focus on corporate performance and maximizing value for the benefit of stockholders in the event of a change of control or other potential termination of employment by providing an economic means for the NEO to transition away from the employment with the Company. Participation by an NEO in any plan or agreement requires the approval of the HRNC. For a description of the Company’s severance agreements, see below and also “Potential Payments Upon Termination or Change Of Control” in this proxy statement.

Severance Agreements

Each of the NEOs, other than Mr. Holmes, whose severance provisions were included in his employment agreement, has entered into an individual severance agreement with the Company. These individual severance agreements, as most recently amended and restated effective May 8, 2019, provide for severance benefits in the event that an NEO’s employment is terminated at any time by the Company without “cause” or without cause or for “good reason” within the 24-month period following a “change in control” (each quoted term as defined in the severance agreements). The severance agreements do not provide for severance benefits solely in the event of a change in control.

If an NEO is terminated without cause, the severance agreements provide for severance in an amount equal to one year of the NEO’s annual base salary payable in equal installments over the twelve-month period following the date of termination, and, provided the Company achieves its applicable performance goals, a pro rata portion of the NEO’s annual incentive bonus for the year in which the termination occurs (not to exceed the NEO’s annual target incentive opportunity), payable in a lump sum when such cash bonuses are regularly paid. The severance provisions under these agreements become available to the respective NEO on or after the first anniversary of such person’s employment with the Company.

If an NEO is terminated without cause or resigns for good reason within the two-year period following the consummation of a change in control, in addition to the benefits described above, the severance agreements provide for full vesting (at 100% of the applicable target level for performance-based awards if termination occurs on or prior to the last day of the performance period) of any outstanding restricted stock unit awards or long-term performance-based cash awards (including any replacement awards or awards into which any such awards are converted into in connection with a change in control) held by the NEO on the date of termination.

Restricted Stock Unit Agreements

Pursuant to the terms of the RSU agreements for outstanding performance-based RSUs held by NEOs other than Mr. Holmes, if a participant is terminated for cause or resigns from the Company or any of its subsidiaries, all units subject to the award shall be forfeited. If a participant is terminated without cause or due to death or disability prior to completion of half of the performance period, all units subject to the award shall be forfeited. If a participant is terminated (1) without cause or due to death or disability after completion of half of the performance period but on or prior to the last day of the performance period, one-third of the units will vest based on actual performance determined after the completion of the performance period, and all unvested units will be forfeited, or (2) following the last day of the of the performance period, the units subject to the next vesting installment will vest and all other unvested units will be forfeited. In the event that the units are assumed or otherwise replaced in connection with a change in control, and a participant’s employment is terminated without cause or a participant terminates his or her employment for good reason, in each case within the 12-month period immediately following such change in control, then, if the termination occurs on or prior to the last day of the performance period, the units will vest at the target level and, if the termination occurs after the end of the performance period, all remaining installments will vest.

Pursuant to the terms of the agreements for outstanding time-based RSUs held by NEOs other than Mr. Holmes, if a participant is terminated for cause or resigns from the Company or any of its subsidiaries, any units that are not vested as of such date will be forfeited. If a participant is terminated without cause or due to death or disability, then the number of units that would have vested during the 12-month period following the termination date will vest as of the termination date. In the event the units are assumed or otherwise replaced in connection with a change in control and a participant’s employment is terminated without cause or a participant terminates his or her employment for good reason, in each case within 12 months following such change in control, then all unvested units will vest as of the termination date.

 


 

 

 

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Pursuant to the terms of the RSU agreements for outstanding performance-based RSUs held by Mr. Holmes, if he is terminated for cause or he resigns other than for good reason, any units that are not vested as of such date shall be forfeited. If Mr. Holmes is terminated without cause or he resigns for good reason prior to completion of half of the performance period, then a prorated number of units will vest based on actual performance determined after completion of the performance period, and all unvested units will be forfeited. If Mr. Holmes is terminated due to death or disability prior to completion of half of the performance period, all units subject to the award shall be forfeited. If Mr. Holmes is terminated without cause or due to death or disability, or he resigns for good reason (1) after completion of half of the performance period but on or prior to the last day of the performance period, then one-third of the units will vest based on actual performance determined after the completion of the performance period, and all unvested units will be forfeited, or (2) following the last day of the of the performance period, then the units subject to the next vesting installment will vest and all other unvested units will be forfeited. In the event that the units are assumed or otherwise replaced in connection with a change in control, and Mr. Holmes’s employment is terminated without cause or he resigns for good reason, in each case within the 12-month period immediately following such change in control, then, if the termination occurs on or prior to the last day of the performance period, the units will vest at the target level and, if the termination occurs after the end of the performance period, all remaining installments will vest.

Pursuant to the terms of the agreements for outstanding time-based RSUs held by Mr. Holmes, if he is terminated for cause or he resigns other than for good reason, any units that are not vested as of such date will be forfeited. If Mr. Holmes is terminated without cause or due to death or disability, or he resigns for good reason, then the number of units that would have vested during the 12-month period following the termination date will vest as of the termination date. In the event the units are assumed or otherwise replaced in connection with a change in control and Mr. Holmes’s employment is terminated without cause or he resigns for good reason, in each case within 12 months following such change in control, then all unvested units will vest as of the termination date.

The treatment of certain RSUs granted to the NEOs other than Mr. Homes is also governed by the terms of the amended and restated severance agreements as described above under “—Other Agreements—Severance Agreements” and the treatment of certain RSUs granted to Mr. Holmes are also governed by the terms of his existing employment agreement as described above under “—Executive Employment Agreements—Alexander Holmes.”

Performance-Based Cash Award Agreements.

Pursuant to the terms of the performance-based cash award agreements for outstanding awards held by our NEOs other than Mr. Holmes, if a participant is terminated for cause or resigns from the Company or any of its subsidiaries, any amount of the award that is not vested as of such date shall be forfeited. If a participant is terminated without cause or due to death or disability prior to completion of half of the performance period, the total amount of the award shall be forfeited. If a participant is terminated without cause or due to death or disability (1) after completion of half of the performance period but on or prior to the last day of the performance period, then one-third of the award will vest based on actual performance determined after the completion of the performance period, and any unvested amount of the award will be forfeited, or (2) after completion of the performance period, then the portion of the award subject to the next vesting installment will vest, and any unvested amount of the award will be forfeited. If a participant is terminated without cause or for good reason, in each case with the 12-month period following a change in control, then, if the termination occurs on or prior to the last day of the performance period, the award will vest at the target level and, if the termination occurs after the end of the performance period, all remaining installments will vest.

Pursuant to the terms of the performance-based cash award agreements for outstanding awards held by Mr. Holmes, if he is terminated for cause or resigns other than for good reason, any amount of the award that is not vested as of such date shall be forfeited. If Mr. Holmes is terminated without cause or he resigns for good reason, prior to completion of half of the performance period, then a prorated portion of the award will vest based on actual performance determined after completion of the performance period, and any unvested portion of the award will be forfeited. If Mr. Holmes is terminated due to death or disability prior to completion of half of the performance period, the total amount of the award shall be forfeited. If Mr. Holmes is terminated without cause or due to death or disability, or he resigns for good reason (1) after completion of half of the performance period but on or prior to the last day of the performance period, then one-third of the award will vest based on actual performance determined after the completion of the performance period, and any unvested amount of the award will be forfeited, or (2) after completion of the performance period, then the portion of the award subject to the

 

 

 

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next vesting installment will vest, and any unvested amount of the award will be forfeited. If Mr. Holmes is terminated without cause or for good reason, in each case with the 12-month period following a change in control, then, if the termination occurs on or prior to the last day of the performance period, the award will vest at the target level and, if the termination occurs after the end of the performance period, all remaining installments will vest.

The treatment of the performance-based cash awards granted to the NEOs other than Mr. Homes is also governed by the terms of the amended and restated severance agreements as described above under “—Other Agreements—Severance Agreements” and the treatment of the performance-based cash awards granted to Mr. Holmes are also governed by the terms of his existing employment agreement as described above under “—Executive Employment Agreements—Alexander Holmes.”

Stock Option Agreements

We have not granted stock options to any NEO since 2014 and all outstanding stock options held by our NEOs are now fully vested by their terms. Pursuant to the terms of the form stock option agreements for stock options awarded after November 2011, if an optionee’s employment is terminated for cause, any portion of the option that has not been exercised shall be immediately forfeited. If there is a change in control of the Company and the per share fair market value of the Company’s common stock on the occurrence of the change in control does not exceed the per share option price, then the option shall immediately terminate. However, if the fair market value exceeds the option price on the occurrence of the change in control, the Committee, in its sole discretion, may (1) provide the optionee reasonable time to exercise the option, (2) provide for the termination of the option in exchange for payment to the optionee of the excess of the (x) aggregate fair market value of the common stock issuable pursuant to the option over (y) the aggregate option price or (3) if the change in control involves a merger or consolidation with another company, provide for the assumption or substitution by the surviving entity or its parent of awards with substantially the same terms as the option.

The treatment of stock options granted to Mr. Holmes are governed by the terms of his existing long-term equity award agreements and the provisions of his existing employment agreement as described above under “—Executive Employment Agreements.”

Annual Cash Incentive Plan

Pursuant to the terms of the annual cash incentive plan, in the event of a change of control, each participant in the plan shall be entitled to a pro rata bonus award calculated on the basis of achievement of the performance goals through the date of the change of control. In the event of a participant’s termination of employment to retirement, death or disability, the participant shall be eligible to receive a pro rata bonus award if bonus awards are paid by the Company.

Applicable Definitions

For purposes of the agreements described in this section entitled “—Other Agreements” and in the section entitled “—Executive Employment Agreements,” the terms listed below are defined as follows:

(i) “cause” generally means (a) the executive has willfully refused to carry out the reasonable and lawful directions, within the executive’s control and responsibilities, of the Board or the person to whom the executive reports for 10 days following notice of such failure, (b) the executive has committed fraud or dishonesty in the performance of his or her duties, (c) the executive has committed an act constituting a felony, misdemeanor involving moral turpitude, or violation of federal securities laws, or the executive is indicted for a felony, (d) the executive has engaged in willful misconduct or gross negligence that could reasonably be expected to be injurious to our financial condition or business reputation, (e) the executive has materially breached our code of conduct or ethics or any other code of conduct in effect from time to time (to the extent applicable to the executive) resulting in a material adverse effect on us, or (f) the executive has breached an Employee Trade Secret Agreement, Confidential Information Agreement, Post-Employment Restriction Agreement, or other similar agreement resulting in an adverse effect on us.

(ii) “good reason” generally means (a) a material reduction in the executive’s position or responsibilities, (b) a material reduction in the executive’s base salary or target bonus opportunity, except in connection with across-the-board compensation reductions of less than 10% applicable to similarly situated employees, or (c) a change in the geographic location of the executive’s place of work by more than 50 miles. The executive must

 


 

 

 

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notify us in writing of his or her intent to terminate employment with good reason within 60 days after the occurrence of an event, and we have a 30-day cure period to remedy such event after receipt of notice.

(iii) “disability” generally means the executive’s physical or mental incapacity rendering the executive incapable of performing his or her duties or responsibilities with respect to us for an extended period of time.

(iv) “change of control” generally means (a) a sale or other transfer of all or substantially all of our assets, (b) the transfer of more than 50% of our outstanding stock, or (c) the consummation of a merger, recapitalization or share exchange with another entity that results in a person obtaining 50% or more of our voting power; however, for purposes of the annual cash incentive plan, a “change of control” generally means (a) the acquisition by a person of 20% or more of our outstanding shares of common stock or of the voting power of the outstanding voting securities, (b) a change in the majority composition of our Board, (c) the consummation of a reorganization, merger, consolidation, sale or other disposition of all or substantially all of our assets, or (d) our stockholders’ approval of a complete liquidation or dissolution.

Tax Deductibility

The Company’s ability to deduct compensation expense for federal income tax purposes is subject to the limitations of Section 162(m) of the Internal Revenue Code (the “Code”). Section 162(m) limits deductibility to $1 million for certain executive officers. Under the tax laws in effect before 2018, compensation that qualified as “performance-based compensation” under Section 162(m) was deductible without regard to this limitation. Effective for tax years beginning after December 31, 2017, the “Tax Cuts and Jobs Act of 2017” generally eliminated the performance-based exemption, subject to a special rule that grandfathers certain awards and agreements that were in effect on November 2, 2017.

While the HRNC is mindful of the limitation imposed by Section 162(m) of the Internal Revenue Code, it also recognizes that facts and circumstances may render compliance with those limitations inappropriate, at odds with the best interest of the Company or inconsistent with the then-prevailing competitive market conditions. In such event, the HRNC’s priority will be determining what is in the best interest of the Company and its stockholders rather than obtaining the potential benefit of a tax deduction and, therefore, may approve compensation that is not deductible for tax purposes.

COMPENSATION COMMITTEE REPORT

The Human Resources and Nominating Committee of the Board, which performs equivalent functions to a compensation committee, has reviewed and discussed with management the Compensation Discussion and Analysis section that follows and, based on such review and discussion, has recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.

Respectfully Submitted,

J. Coley Clark (Chair)

Seth W. Lawry

Antonio O. Garza

 

 

 

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EXECUTIVE COMPENSATION TABLES

The following tables and accompanying narrative disclosure should be read in conjunction with the Compensation Discussion and Analysis above, which sets forth the objectives of MoneyGram’s executive compensation and benefit programs.

2019 SUMMARY COMPENSATION TABLE

 

Name and

Principal Position

   Year     

Salary

($)

    

Bonus

($) (1)

    

Stock

Awards

($)(2)

    

Non-Equity

Incentive Plan

Compensation

($)(3)

    

All Other

Compensation

($)(4)

    

Total

($)

 

W. Alexander Holmes

     2019        872,885        68,200        1,093,750        1,693,938        12,910        3,741,683  

Chairman and Chief Executive Officer

     2018        821,154               3,093,763        1,275,150        11,000        5,201,067  
     2017        725,000        450,000        2,175,006        915,000        10,800        4,275,806  

Lawrence Angelilli

     2019        425,000        22,100        300,000        498,700        17,536        1,263,336  

Chief Financial Officer

     2018        418,269               675,007        371,350        11,000        1,475,626  
     2017        398,077               675,012        310,800        10,800        1,394,689  

Kamila K. Chytil

     2019        466,346        26,300        500,000        512,150        8,564        1,513,360  

Chief Operating Officer

     2018        421,731               900,012        344,650        11,000        1,677,393  

Grant Lines

     2019        450,000        23,400        300,000        534,650        40,146        1,348,196  

Chief Revenue Officer

     2018        412,767               900,012        664,900        809,764        2,787,443  
     2017        350,068        300,000        675,012        298,992        90,890        1,714,962  

Andres Villareal

     2019        410,962        18,800        225,000        396,200        15,225        1,066,187  

Chief Compliance Officer

                    

Joann Chatfield(5)

     2019        343,269               225,000        248,808        630,557        1,447,634  

Former Chief Marketing Officer

                    

Laura Gardiner(6)

     2019        195,192               225,000        77,708        724,782        1,222,682  

Former Chief Human Resources Officer

                                                              

 

1.

The Board approved a discretionary adjustment on the achievement of 2019 annual cash incentive plan awards under the PBP from 83.5% to 90% (6.5%) for continuing employees in recognition of strong performance in a challenging year. The amount indicated in this column for 2019 is reflective of the 6.5% difference in the amount between actual achievement (83.5%) and final payment (90%).

 

2.

Amounts included in this column represent the aggregate grant date fair value of the RSUs awarded to NEOs calculated in accordance with the applicable accounting guidance under FASB ASC 718. The grant date fair values have been determined based on the assumptions and methodologies set forth in Note 12—Stock-Based Compensation of the Notes to Consolidated Financial Statements in our 2019 10-K.

 

3.

Non-equity incentive plan compensation includes annual cash incentive plan awards earned under the PBP. For 2019, this column also includes cash payments made in 2019 with respect to the portion of the performance-based cash awards granted in 2016 through 2018 that vested in 2019. The performance period applicable to the performance-based cash awards granted in 2018 ended on December 31, 2018 and the HRNC determined that the performance levels for such awards were met at a 77% attainment level. The amount included for the 2018 performance-based cash award in the 2019 row is as follows or each of the NEOs: Mr. Holmes—$264,688; Mr. Angelilli—$57,750; Ms. Chytil—$77,000; Mr. Lines—$77,000; Mr. Villareal—$57,750; Ms. Chatfield—$57,750 and Ms. Gardiner—$57,750. The amount included for the 2017 performance-based cash award in the 2019 row is as follows for each of the NEOs: Mr. Holmes—$181,250; Mr. Angelilli—$56,250; Ms. Chytil—$56,250; Mr. Lines—$56,250; Mr. Villareal—$56,250; Ms. Chatfield—$8,438 and Ms. Gardiner—$8,438. The amount included for the 2016 performance-based cash award in the 2019 row is follows for each of the NEOs: Mr. Holmes—$371,200; Mr. Angelilli—$100,800; Ms. Chytil—$41,600; Mr. Lines—$115,200; Mr. Villareal—$41,600; Ms. Chatfield—$11,520 and Ms. Gardiner—$11,520. This column does not include amounts relating to the performance-based cash awards granted in 2019, which will be recorded under the “Non-Equity Incentive Plan Compensation” column of this table in the year paid.

 

4.

For a breakdown of the components that make up “All Other Compensation” for the NEOs in 2019, refer to the table entitled “2019 All Other Compensation Table” immediately below.

 

5.

Ms. Chatfield served as our Chief Marketing Officer until November 22, 2019 but continued her employment with the Company in a non-officer capacity until March 2, 2020.

 

6.

Ms. Gardiner’s employment with the Company terminated on July 5, 2019.

 


 

 

 

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2019 DETAILS BEHIND ALL OTHER COMPENSATION COLUMN

 

Name

   Year      Group Term
Life ($)(1)
    

Registrant

Contributions

to

Defined

Contribution

Plans ($)(2)

    

Tax

Preparation

($)(3)

    

Miscellaneous

($)(4)

     Severance
($)(5)
 

W. Alexander Holmes

     2019        1,710        11,200                       

Lawrence Angelilli

     2019        6,336        11,200                       

Kamila K. Chytil

     2019        1,026        7,538                       

Grant Lines

     2019        4,386        11,200        20,515        4,045         

Andres Villareal

     2019        4,025        11,200                       

Joann Chatfield

     2019        1,794        11,200                      617,563  

Laura Gardiner

     2019        1,794        11,200                      711,788  

 

(1)

Amounts included in this column reflect costs for Company-provided life insurance premiums.

 

(2)

The 401(k) plan allows employees to defer up to 50% of eligible compensation subject to federal tax law limits. MoneyGram matches 100% of the first three percent and 50% of the next two percent of compensation deferred. The matching contributions for 2019 are set forth in the table.

 

(3)

Amount included in this column reflects tax preparation fees paid by MoneyGram on behalf of Mr. Lines in connection with his 2018 relocation from Dubai to the U.S. as provided in his relocation agreement.

 

(4)

Amount included in this column for Mr. Lines reflects fees associated with the immigration processing and tax service assistance related to his permanent transfer to the U.S. that is being sponsored by MoneyGram.

 

(5)

Amounts in this column include severance payments and benefits accrued for or paid to Ms. Chatfield and Ms. Gardiner in connection with their termination of employment as of March 2, 2020 and July 5, 2019, respectively. For Ms. Chatfield, the amount represents $350,000 for 12 months of base salary and an aggregate of $267,563 for accelerated performance-based cash award payouts pursuant to the terms of awards granted in 2017, 2018 and 2019. Ms. Chatfield is also entitled to a prorated payout under the 2020 Performance Bonus Plan, which will be based on actual achievement and therefore is not included in the table as it not determinable until after completion of the 2020 performance period. For Ms. Gardiner, the amount represents $350,000 for 12 months of base salary, $88,600 for a prorated payout under the 2019 Performance Bonus Plan, and an aggregate of $273,188 for accelerated performance-based cash award payouts pursuant to the terms of awards granted in 2017, 2018 and 2019.

 

 

 

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2019 GRANTS OF PLAN-BASED AWARDS

The following table summarizes the 2019 grants of equity and non-equity plan-based awards for each NEO.

 

  Name                 Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1)
   

Estimated Future
Payouts

Under Equity
Incentive

Plan Awards

    

All Other
Stock
Awards:
Number of
Shares of
Stock or

Units

(#)

     Grant Date
Fair Value
of Stock and
Option
Awards
($)(2)
 
   Grant
Date
     Approval
Date
    Threshold
($)
     Target
($)
     Maximum
($)
    Threshold
(#)
     Target
(#)
 

W. Alexander Holmes

     2/21/2019        2/21/2019 **      525,000        1,050,000        2,100,000             
     2/21/2019        2/21/2019     1,640,625        3,281,250        4,921,875             
     2/21/2019        2/21/2019                   441,028        1,093,750  

Lawrence Angelilli

     2/21/2019        2/20/2019 **      170,000        340,000        680,000             
     2/21/2019        2/20/2019     450,000        900,000        1,350,000             
     2/21/2019        2/20/2019                   120,968        300,000  

Kamila K. Chytil

     2/21/2019        2/20/2019 **      202,000        404,000        808,000             
     2/21/2019        2/20/2019     450,000        900,000        1,350,000             
     10/1/2019        9/26/2019     300,000        600,000        900,000             
     2/21/2019        2/20/2019                   120,968        300,000  
     10/1/2019        9/26/2019                   54,496        200,000  

Grant Lines

     2/21/2019        2/20/2019 **      180,000        360,000        720,000             
     2/21/2019        2/20/2019     450,000        900,000        1,350,000             
     2/21/2019        2/20/2019                   120,968        300,000  

Andres Villareal

     2/21/2019        2/20/2019 **      144,100        288,200        576,400             
     2/21/2019        2/20/2019     337,500        675,000        1,012,500             
     2/21/2019        2/20/2019                   90,726        225,000  

Joann Chatfield

     2/21/2019        2/20/2019 **      120,550        241,100        482,200             
     2/21/2019        2/20/2019     337,500        675,000        1,012,500             
     2/21/2019        2/20/2019                   90,726        225,000  

Laura Gardiner

     2/21/2019        2/20/2019 **      62,425        124,850        249,700             
     2/21/2019        2/20/2019     337,500        675,000        1,012,500             
       2/21/2019        2/20/2019                                                 90,726        225,000  

 

*

Denotes time-based RSUs and performance-based cash awards granted pursuant to the 2005 Plan.

 

**

Denotes annual cash incentive awards under the PBP, which by its terms is governed by the 2005 Plan.

 

(1)

The awards described under these columns reflect (a) potential awards under the 2019 annual cash incentive plan under the PBP and (b) the performance-based cash awards granted in 2019. Actual payout amounts of the annual cash incentive awards under the PBP have already been determined and were paid in February 2020 and are included in the “Non-Equity Incentive Plan Compensation” and “Bonus” columns of the Summary Compensation Table above. Performance-based cash awards will be reported in the Summary Compensation table in the year paid.

 

(2)

The amount included in this column represents the aggregate grant date fair value of the awards made to NEOs calculated in accordance with applicable accounting guidance under FASB ASC 718 (see Note 12—Stock-Based Compensation of the Notes to Consolidated Financial Statements in our 2019 Annual Report on Form 10-K). For time-based RSUs, the grant date fair value is determined as the closing sales price of the common stock on the grant date multiplied by the number of units that are expected to vest.

Restricted Stock Units.    Awards of time-based RSUs were granted under the 2005 Plan for 2019. These RSUs will vest, and become payable in shares of the Company’s common stock, in three substantially equal, annual installments measured from the grant date as long as the NEO remains continuously employed by the Company or one of its subsidiaries through the applicable vesting date.

 


 

 

 

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Performance-Based Cash Awards.    Performance-based cash awards were granted under the 2005 Plan for 2019. The performance-based cash awards vest in three equal installments on each anniversary of the grant date if certain performance goals are achieved, with up to 75% of the performance-based cash awards eligible to vest over such three-year period if a target level of Adjusted EBITDA is achieved for the year ended December 31, 2019 and up to 25% of the performance-based cash awards eligible to vest over such three year period if a target level of Adjusted Total Revenue is achieved for the year ended December 31, 2019. Under the terms of the award agreements, these performance-based cash awards have the potential to pay out at 50% of target cash amount awarded if the Company achieves threshold-level performance and up to 150% of target cash amount awarded if the Company achieves maximum-level performance. Attainment between the threshold and target and the target and maximum performance goals is subject to straight-line interpolation. With respect to the performance-based cash awards granted in 2019, the HRNC determined that the performance levels were met at a 92% attainment level.

For a more detailed discussion of the information set forth in the Summary Compensation Table and Grants of Plan-Based Awards Table above, please see the section above titled “Compensation Discussion and Analysis—2019 Compensation Review and Decisions.”

 

 

 

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OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2019

The following table summarizes the total outstanding equity awards as of December 31, 2019 for each NEO.

 

     Option Awards    Stock Awards
     Number of
Securities
Underlying
Unexercised
Options
  

Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options

(#)

 

 

Option
Exercise
Price

($/Sh)

 

 

Option
Expiration
Date

 

  

Number of
Shares or
Units of
Stock
That Have
Not
Vested
(#)(1)

 

 

Market Value
(as of
December 31,
2019) of
Shares or
Units of
Stock That
Have Not
Vested

($)(2)

 

 

Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)(3)

 

 

Equity

Incentive

Plan

Awards: Market
or Payout

Value of
Unearned
Shares,

Units or Other
Rights That
Have Not
Vested

($)(2)

 

Name and Grant Date

 

  

Exercisable
(#)

 

  

Unexercisable
(#)

 

W. Alexander Holmes

                                       

2/17/2010

       12,500                     22.24       2/17/2020                         

7/11/2011

       25,000                     28.00       7/11/2021                         

11/17/2011

       8,250                     17.03       11/17/2021                         

3/21/2012

       13,526                     18.39       3/21/2022                         

2/26/2013

       26,835                     16.48       2/26/2023                         

2/22/2017

                                        52,324       109,880            

3/1/2018

                                        179,893       377,775            

02/21/2019

                                        441,028       926,159            

Lawrence Angelilli

                                       

9/27/2011

       31,250                     19.28       9/27/2021                         

11/17/2011

       3,000                     17.03       11/17/2021                         

2/26/2013

       7,989                     16.48       2/26/2023                         

2/24/2014

       6,146                     20.08       2/24/2024                         

2/22/2017

                                        16,240       34,104            

3/1/2018

                                        39,250       82,425            

2/21/2019

                                        120,968       254,033            

Kamila K. Chytil

                                       

2/22/2017

                                        16,240       34,104            

3/1/2018

                                        52,333       109,899            

02/21/2019

                                        120,968       254,033            

10/01/2019

                                        54,496       114,442            

Grant Lines

                                       

2/22/2017

                                        16,240       34,104            

3/1/2018

                                        52,333       109,899            

02/21/2019

                                        120,968       254,033            

Andres Villareal

                                       

02/22/2017

                                        16,240       34,104            

3/1/2018

                                        39,250       82,425            

02/21/2019

                                        90,726       190,525            

Joann Chatfield

                                       

11/17/2011

       640                     17.03       11/17/2021                         

02/26/2013

       4,025                     16.48       2/26/2023                         

02/24/2014

       2,867                     20.08       2/24/2024                         

02/22/2017

                                        1,625       3,413            

05/16/2017

                                        604       1,268            

03/01/2018

                                        39,250       82,425            

02/21/2019

                                        90,726       190,525            

Laura Gardiner (3)

                                       

06/29/2012

       1,333                     14.60       1/1/2020                         

02/26/2013

       2,293                     16.48       1/1/2020                         

02/24/2014

       1,719                     20.08       1/1/2020                         

 


 

 

 

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(1)

For awards of time-based RSUs granted during 2017, 2018, and 2019 the awards will vest, and become payable in shares of the Company’s common stock, in three substantially equal annual installments beginning one year from the grant date as long as the NEO remains continuously employed by the Company through the applicable vesting date. This column also reflects the number of performance-based RSUs that have been earned and remain eligible to vest pursuant to the performance-based RSUs granted in each of February 2017 and March 2018, based on actual Company performance with respect to the performance goals as of the end of the performance period (December 31, 2017 and December 31, 2018 for the 2017 and 2018 performance-based RSUs, respectively), as determined by the HRNC. In February 2019, the HRNC determined that the performance levels for the 2018 performance-based RSUs were met at the 77% attainment level. In January 2018, the HRNC determined that the performance levels for the 2017 performance-based RSUs were met at the 75% attainment level. The 2017 and 2018 performance-based RSUs vest in three equal installments on each anniversary of the grant date, subject to continuous employment by the Company or one of its subsidiaries through the vesting date.

 

(2)

The market value of shares or units of stock is calculated by multiplying the number of shares or units reported with respect to the award by the closing price of our stock on the Nasdaq on December 31, 2019, which was $2.10 per share.

 

(3)

As a result of Ms. Gardiner’s termination of employment on July 5, 2019, all of her outstanding options expired on January  1, 2020.

2019 OPTION EXERCISES AND STOCK VESTED TABLE

The following table summarizes the vesting of RSUs during 2019 for each NEO. No stock options were exercised by any NEOs during 2019.

 

     Option Awards    Stock Awards(1)

Named Executive

  

Number of Shares

Acquired on Exercise (#)

  

Value Realized

on Exercise ($)

  

Number of Shares

Acquired on Vesting (#)

  

Value Realized  

on Vesting ($)(2)  

W. Alexander Holmes

                     255,662        645,566

Lawrence Angelilli

                     66,657        168,715

Kamila K. Chytil

                     53,035        133,676

Grant Lines

                     73,192        184,987

Andres Villareal

                     48,540        123,422

Joann Chatfield

                     25,352        63,013

Laura Gardiner(3)

                     77,812        190,494

 

(1)

Represents vesting of time-based and performance-based RSUs.

 

(2)

Aggregate dollar amount realized upon vesting is computed by multiplying the number of shares subject to the RSU award that vested by the closing price of our stock on the vesting date.

 

(3)

Of this number, 52,251 shares represent settlement of RSUs that accelerated in connection with Ms. Gardiner’s termination of employment.

Potential Payments upon Termination or Change of Control

The following tables reflect the amount of compensation that each of the current NEOs would have received in the event of termination of such NEO’s employment with MoneyGram under a variety of circumstances, assuming that termination was effective as of December 31, 2019. The amounts represent the compensation and benefits due and payable upon the different termination events as provided for in the applicable agreements and plans in existence as of December 31, 2019.

While the summaries below provide an estimate of the payments that may be made to the NEOs, actual payments to an NEO upon the various termination events can only be determined at the time of such NEO’s actual termination. The tables include only those benefits, if any, that are enhanced or increased as a result of the termination event specified and do not include benefits that the NEO is entitled to receive regardless of the termination event, including but not limited to: (i) any base salary earned but not yet paid; (ii) amounts contributed to or accrued and earned under broad-based employee benefit plans, such as the 401(k) plan; and (iii) basic continuation of medical, dental, life and disability benefits.

The following tables and summaries reflect, for Ms. Chatfield, the actual benefits and payments made to her in connection with her termination on March 2, 2020 and, for Ms. Gardiner, the actual benefits and payments made to her in connection with her termination of employment on July 5, 2019.

 

 

 

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Potential Payments and Benefits upon Termination following a Change of Control

Certain of MoneyGram’s compensation and benefit plans contain provisions for enhanced benefits upon a termination within a specified period following a change of control of MoneyGram. The following table sets forth the benefits each of our current NEOs would have been eligible to receive pursuant to each NEO’s employment agreement or severance agreement, as applicable, and under our awards granted pursuant to the 2005 Plan upon a termination of employment without “cause” or for “good reason” immediately following a change of control of the Company as of December 31, 2019.

 

Benefit

   W. Alexander
Holmes(1)
     Lawrence
Angelilli(2)
     Kamila
Chytil (2)
     Grant
Lines(2)
     Andres
Villareal(2)
 

Severance Payment

   $ 3,850,000      $ 425,000      $ 550,000      $ 450,000      $ 415,000  

Bonus (annual cash incentive plan)(3)

   $ 945,000      $ 306,000      $ 363,600      $ 324,000      $ 259,400  

Accelerated vesting of RSUs(4)

   $ 1,278,915      $ 338,369      $ 472,651      $ 358,210      $ 274,861  

Accelerated vesting of Performance-Based RSUs(5)

   $ 134,900      $ 32,193      $ 39,827      $ 39,827      $ 32,193  

Accelerated vesting of performance-based cash Awards(6)

   $ 3,991,875      $ 1,071,750      $ 1,710,250      $ 1,110,250      $ 846,750  

Welfare Benefits(7)

   $ 53,626      $      $      $      $  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 10,254,316      $ 2,173,312      $ 3,136,328      $ 2,282,287      $ 1,828,204  

 

(1)

The Holmes Employment Agreement does not provide any payments or benefits upon a termination of employment in connection with a change of control beyond the benefits and payments provided upon a termination of employment without cause or with good reason in the absence of a change of control. Please see footnote (2) to the “Potential Payments and Benefits upon Termination without Cause or Termination by Executive with Good Reason” table for an explanation of amounts potentially payable to Mr. Holmes under the Holmes Employment Agreement upon a termination of employment by the Company without cause or by Mr. Holmes for good reason. The amounts included in this table for Mr. Holmes with respect to RSUs, performance-based RSUs and performance-based cash awards reflect the amounts Mr. Holmes is eligible to receive pursuant to his applicable award agreements in connection with an involuntary termination without “cause” or for “good reason” following a change in control.

 

(2)

The severance agreements for these NEOs in effect on December 31, 2019 provided for (i) severance in an amount equal to one year of the NEO’s annual base salary, (ii) provided the Company achieves its applicable performance goals, a pro rata portion of the NEO’s annual incentive bonus for the year in which the termination occurs (not to exceed the NEO’s annual target incentive opportunity), and (iii) full vesting of any outstanding restricted stock unit awards or long-term performance-based cash awards (at 100% of the applicable target level, in the case of any award subject to performance-based vesting criteria if termination occurs on or prior to the last day of the performance period), in each case, upon a termination without cause or for good reason within the two-year period following a change in control.

 

(3)

Amount represents a 2019 annual cash incentive plan payment based on actual achievement of Company performance goals through December 31, 2019. 83.5% of the total incentive paid is based upon Company results, plus an additional 6.5% for continuing NEOs in recognition of strong performance in a challenging year, for a total payment of 90% of target.

 

(4)

Valuation is based on the number of shares subject to the time-based RSU awards that would vest upon a change in control in connection with an involuntary termination without “cause” or “good reason” multiplied by the closing market price of our common stock on December 31, 2019, which was $2.10 per share.

 

(5)

Represents remaining unvested portion of the performance-based RSUs granted in March 2018 and February 2017 based on actual performance, in each case, that would vest upon a change of control in connection with an involuntary termination without “cause” or for “good reason.” Valuation is based on the number of shares subject to the performance-based RSU awards that would vest upon a change in control in connection with an involuntary termination without “cause” or “good reason” multiplied by the closing market price of our common stock on December 31, 2019, which was $2.10 per share.

 

(6)

Represents the target amount of performance-based cash awards granted in February 2019 and the remaining unvested portion of performance-based cash awards granted in March 2018 and February 2017 based upon actual performance attainment, which would vest upon a change of control in connection with an involuntary termination without “cause” or for “good reason.” On December 31, 2019, the performance period applicable to the performance-based cash awards granted in February 2019 had not yet ended; however, after the conclusion of that performance period, the HRNC determined that the performance levels with respect to such awards were met at a 92% attainment level. With respect to the remaining unvested portions of the performance-based cash awards granted in February 2017, which vested on February 22, 2020, the amounts reported in this row reflect the actual performance attainment levels of 75% with respect to such awards. With respect to the remaining unvested portions of the performance-based cash awards granted in March 2018, which are scheduled to vest in equal installments on March 1 of 2020 and 2021, the amounts reported in this row reflect the actual performance attainment levels of 77% with respect to such awards.

 

(7)

Amount represents the value of continued welfare benefits during the applicable severance period following a termination without “cause” or for “good reason,” which is up to 24 months for Mr. Holmes under the A&R Holmes Employment Agreement.

 

 


 

 

 

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Potential Payments and Benefits upon Termination without Cause or Termination by Executive with Good Reason

The following table sets forth the benefits Ms. Chytil and Messrs. Holmes, Angelilli, Lines and Villareal, would have been eligible to receive pursuant to each such NEO’s employment agreement or severance agreement, as applicable, and under our awards granted pursuant to the 2005 Plan upon a termination of employment without cause or, in the case of Mr. Holmes, for good reason, as of December 31, 2019. For Ms. Chatfield and Ms. Gardiner, the following table sets forth benefits and payments each was entitled to in connection with her actual termination of employment on March 2, 2020 and July 5, 2019, respectively.

 

Benefit

   W. Alexander
Holmes(1)
     Lawrence
Angelilli(2)
     Kamila
Chytil(2)
     Grant
Lines(2)
     Andres
Villareal(2)
     Joann
Chatfield(2)
     Laura
Gardiner(2)
 

Severance Payment(3)

   $ 3,850,000      $ 425,000      $ 550,000      $ 450,000      $ 415,000      $ 350,000      $ 350,000  

Bonus (annual cash incentive plan)(4)

   $ 945,000      $ 306,000      $ 363,600      $ 324,000      $ 259,400      $      $ 88,600  

Accelerated vesting of RSUs(5)

   $ 524,561      $ 139,123      $ 187,137      $ 149,029      $ 117,974      $ 100,451      $ 111,644  

Accelerated vesting of Performance-Based RSUs(6)

   $ 82,412      $ 20,740      $ 24,557      $ 24,557      $ 20,740      $ 12,587      $ 14,803  

Accelerated vesting of performance-based cash Awards(7)

   $ 1,452,188      $ 390,000      $ 593,250      $ 409,250      $ 321,000      $ 267,563      $ 273,188  

Welfare Benefits(8)

   $ 53,626      $      $      $      $      $      $  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 6,907,787      $ 1,280,863      $ 1,718,544      $ 1,356,836      $ 1,134,114      $ 730,601      $ 838,235  

 

(1)

For a description of Mr. Holmes’ severance benefits under the Holmes Employment Agreement, see “Executive Compensation—Compensation Discussion and Analysis—Executive Employment Agreements—Alexander Holmes.” In the event of a termination by the Company without cause or by Mr. Holmes for good reason on or after January 1, 2016, Mr. Holmes’ outstanding cash and equity-based incentive awards granted prior to January 1, 2016, will continue to be governed by the terms of the applicable award.

 

(2)

These NEOs have entered into severance agreements with the Company, which provide for severance if the NEO’s employment is terminated by the Company without “cause.” The severance agreements provide for severance payments equal to: (i) the NEO’s then-current monthly base salary multiplied by 12, payable in equal monthly installments; and (ii) a pro rata portion of the NEO’s annual target incentive bonus for the year in which the termination occurs (not to exceed the NEO’s annual target incentive opportunity), payable in a lump sum. For a description of the severance agreements, see “Executive Compensation—Compensation Discussion and Analysis—Other Agreements—Severance Agreements.”

 

(3)

For a description of the calculation of the salary severance payment, see the discussion of the employment agreements and severance agreements set forth in “Executive Compensation—Compensation Discussion and Analysis—Executive Employment Agreements—Alexander Holmes” and “Executive Compensation—Compensation Discussion and Analysis—Other Agreements—Severance Agreements” in this proxy statement.

 

(4)

Amount represents a 2019 annual cash incentive plan payment based on actual achievement of Company performance goals through December 31, 2019. 83.5% of the total incentive paid is based upon Company results, plus an additional 6.5% for continuing NEOs in recognition of strong performance in a challenging year, for a total payment of 90% of target. No amount is shown for Ms. Chatfield because, in connection with her termination of employment in March 2020, she is entitled to a prorated payout under the 2020 annual cash incentive plan, which will be based on actual achievement and therefore is not determinable until after completion of the 2020 performance period.

 

(5)

For all NEOs other than Ms. Chatfield and Ms. Gardiner, valuation is based on the number of shares subject to the time-based RSU awards that would vest upon a termination without “cause” or with “good reason” multiplied by the closing market price of our common stock on December 31, 2019, which was $2.10 per share. For Ms. Chatfield and Ms. Gardiner, valuation is based on the number of shares subject to the time-based RSU awards that actually vested upon their termination of employment multiplied by the closing market price of our common stock on March 2, 2020, which was $2.24 per share, and July 5, 2019, which was $2.42 per share, respectively.

 

(6)

For all NEOs other than Ms. Chatfield and Ms. Gardiner, valuation is based on the number of shares subject to the performance-based RSU awards (based on actual performance attainment) that would vest upon a termination without “cause” or with “good reason” multiplied by the closing market price of our common stock on December 31, 2019, which was $2.10 per share. For Ms. Chatfield and Ms. Gardiner, valuation is based on the number of shares subject to the performance-based RSU awards (based on actual performance attainment) that actually vested upon their termination of employment multiplied by the closing market price of our common stock on March 2, 2020, which was $2.24 per share, and July 5, 2019, which was $2.42 per share, respectively.

 

(7)

Amounts represent the value of the performance-based cash award granted in February 2019 and the remaining unvested portion of performance-based cash awards granted in February 2017 and March 2018 that would accelerate (a) with respect to Mr. Holmes, upon a termination without “cause” for “good reason” and (b) with respect to the other NEOs, upon a termination without “cause,” each based on the actual performance attainment levels of 92% for the performance-based cash awards for 2019, 77% for the performance-based cash awards granted in 2018 and 75% for the performance-based cash awards granted in February 2017, each as determined by the HRNC.

 

(8)

Amount represents the value of continued welfare benefits upon a termination without “cause” or for “good reason” during the applicable severance period, which is up to 24 months for Mr. Holmes under the A&R Holmes Employment Agreement.

 

 

 

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Potential Payments and Benefits upon Retirement, Death or Disability

The columns in the table below represent payments that each of our current NEOs would be eligible to receive in the event of a qualified retirement (age 55 with ten years of service) or the NEO’s death or disability. The NEOs would be entitled to receive pro rata payments under certain incentive plans and certain pro rata vesting of RSUs. The payments below assume that the termination event occurred as of December 31, 2019.

 

Benefit

   W. Alexander
Holmes
     Lawrence
Angelilli
     Kamila
Chytil
     Grant
Lines
     Andres
Villareal
 

Bonus (annual cash incentive plan)(1)

   $ 945,000      $ 306,000      $ 363,600      $ 324,000      $ 259,400  

Accelerated vesting of RSUs(2)

   $ 524,561      $ 139,123      $ 187,137      $ 149,029      $ 117,974  

Accelerated vesting of Performance-Based RSUs(3)

   $ 82,412      $ 20,740      $ 24,557      $ 24,557      $ 20,740  

Accelerated vesting of performance-based cash Awards(4)

   $ 1,452,188      $ 390,000      $ 593,250      $ 409,250      $ 321,000  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 3,004,161      $ 855,863      $ 1,168,544      $ 906,836      $ 719,114  

 

(1)

Pursuant to the annual cash incentive plan, if a participant terminates employment due to (i) retirement upon attaining age 55 or older and completing 10 years of service with the Company, (ii) death, or (iii) disability, the participant is eligible to receive a pro rata bonus award if bonus awards are paid by the Company.

 

(2)

Valuation is based on the number of shares subject to the time-based RSU awards that would vest upon a termination due to death or disability multiplied by the closing market price of our common stock on December 31, 2019, which was $2.10 per share.

 

(3)

Valuation is based on the number of shares subject to the performance-based RSU awards (based on actual performance attainment) that would vest upon a termination due to death or disability multiplied by the closing market price of our common stock on December 31, 2019, which was $2.10 per share.

 

(4)

Amounts represent the value of the performance-based cash awards granted in February 2019 and the remaining unvested portion of the performance-based cash award granted in March 2018 and February 2017 that would accelerate upon a termination due to death or disability, each based on the actual performance attainment levels of 92% for the performance-based cash awards granted in February 2019, 77% for the performance-based cash awards granted in March 2018 and 75% for the performance-based cash awards granted in February 2017, each as determined by the HRNC.

CEO Pay Ratio

Pursuant to Section 953(b) of Dodd-Frank and Item 402(u) of Regulation S-K, this section provides information regarding the relationship of the annual total compensation of all of our employees (other than our CEO) to the annual total compensation of our CEO, Mr. Holmes. The annual total compensation of our CEO for 2019, as reported in the Summary Compensation Table above, was $3,741,683. Our median employee’s annual total compensation was $65,722 in 2019. Based on this information, for 2019, the ratio of the annual total compensation of Mr. Holmes to the median of the annual total compensation of all of our employees (other than Mr. Holmes) was 57 to 1.

Methodology and Assumptions

The median annual total compensation for all our employees reported above reflects the compensation actually paid to an employee who represents the median of our entire employee population when ranked on the basis of compensation. To identity this median employee, as well as to determine the ratio of the total annual compensation of the median employee to the total annual compensation of our Chief Executive Officer, we utilized the methodology and assumptions set forth below.

As permitted by the SEC rules, the median employee utilized for 2019 is the same employee identified in 2017 because there have been no changes in our employee population or employee compensation arrangements that we reasonably believe would result in a significant change to this pay ratio disclosure.

We selected December 31, 2017 as the date on which to determine our employee population for purposes of identifying our median employee, because such date provided payroll data and other information necessary to efficiently determine our employee population. As of December 31, 2017, our employee population consisted of 2,936 individuals, including 1,180 full-time employees in the U.S. and 1,756 full-time employees outside of the U.S. This population included all individuals employed by the Company or any of its consolidated subsidiaries, whether as a full-time, part-time, seasonal, or temporary workers. This population did not include independent contractors engaged by the Company.

 


 

 

 

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In identifying our median employee, we utilized the consistently applied compensation measures described below, which we believe provide a reasonable basis for determining each employee’s total annual compensation as well as a useful measure in evaluating each employee’s total annual compensation and identifying our median employee. For employees located in the United States, we calculated total annual compensation by aggregating, as applicable, each such employee’s (i) base wages or salary (including any overtime pay) realized for the 2017 fiscal year, (ii) annual incentive bonus or any other type of incentive pay received in the 2017 fiscal year, and (iii) target annual long-term incentive plan amounts in effect as of the end of the 2017 fiscal year. For employees located outside the United States, we utilized the same compensation measure used for employees located in the United States, except that we used base wages or salary amounts, as applicable, that were in effect as of December 31, 2017 (as opposed to actually realized for fiscal year 2017), as precise base wage and salary information was not available for all of our foreign employees. For the 606 employees hired during 2017, we annualized each such employees’ compensation in order to establish a more direct comparison to the annual total compensation of our employees that were employed for all of 2017. Such annualization adjustments included target annual bonus amounts for the employees hired in 2017 in order to more closely approximate the compensation such employees would have received had they been employed by the Company for all of 2017 and to align such annualized amounts with the annual total compensation of our employees that were employed for all of 2017 and received annual bonuses in the first quarter of 2017. No cost-of-living adjustments were made in identifying our median employee. This calculation methodology was consistently applied to our entire employee population, determined as of December 31, 2017, in order to identify our median employee.

We calculated each element of our median employee’s annual compensation for 2019 in accordance with paragraph (c)(2)(x) of Item 402 of Regulation S-K. The difference between our median employee’s total annual compensation calculated using our consistently applied compensation measure for determining our median employee and the employee’s annual total compensation calculated in accordance with paragraph (c)(2)(x) of Item 402 of Regulation S-K represents the Company’s 401(k) matching contributions made with respect such employee pursuant to our 401(k) plan. Similarly, the 2019 annual total compensation of our CEO was calculated in accordance with paragraph (c)(2)(x) of Item 402 of Regulation S-K, as reported in the “Total” column of the Summary Compensation Table above.

PROPOSAL 4: APPROVAL OF AMENDED AND RESTATED MONEYGRAM INTERNATIONAL, INC. 2005 OMNIBUS INCENTIVE PLAN, INCLUDING AN INCREASE IN THE NUMBER OF AUTHORIZED SHARES UNDER THE PLAN

At the 2020 Annual Meeting, the stockholders will be asked to approve the amendment and restatement (the “Amendment and Restatement”) of the 2005 Plan. If the Amendment and Restatement is approved at the 2020 Annual Meeting, it will become effective as of May 6, 2020, the day of the 2020 Annual Meeting. The Company believes approval of the Amendment and Restatement is advisable in order to ensure the Company has an adequate number of shares of Company common stock available in connection with its incentive compensation programs.

Background and Purpose of the Proposal

The Company’s stockholders approved the 2005 Plan at the 2005 Annual Meeting and most recently approved an amendment and restatement of the 2005 Plan at the 2015 Annual Meeting. The purpose of this Amendment and Restatement is to:

 

   

Increase the number of shares of Company common stock that may be issued under the 2005 Plan by 8,900,000 shares;

 

   

Extend the term of the 2005 Plan to May 6, 2030;

 

   

Add a default definition for “Change in Control”;

 

   

Eliminate the use of the fungible share counting provision for purposes of new awards;

 

   

Expand the limitations on reuse of shares;

 

   

Remove or revise certain provisions related to Section 162(m);