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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
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 | |
Aptiv PLC
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
To our Shareholders:
I am pleased to invite you to Aptiv PLC’s Annual General Meeting of Shareholders to be held on Friday, April 30, 2021, at 8:00 a.m. Eastern Time, virtually via the internet at www.virtualshareholdermeeting.com/APTV2021. I hope that the convenience of a virtual meeting will allow you to easily join and participate.
The following Notice of Annual General Meeting of Shareholders and Proxy Statement describes the business that will be conducted at the Annual Meeting. You can find financial and other information about Aptiv in the accompanying Form 10-K for the fiscal year ended December 31, 2020. These materials are also available on our website, aptiv.com.
Aptiv is a global technology company that develops safer, greener and more connected solutions enabling the future of mobility. We envision a future with zero vehicle-related injuries or fatalities, and have developed active safety technologies to meet customers’ needs and that have the potential to meaningfully save lives. We also see increasing development and adoption of vehicle electrification to enable a sustainable future for our planet, and have industry-leading high-voltage solutions that reduce CO2 emissions and enable our customers’ electrified vehicle designs. Our software enables seamless connectivity between vehicles, their passengers and the environments in which they operate. In short, Aptiv’s success emanates from a strong, sustainable business that makes the world a better place, a business that is Sustainable by Design.
Despite the unprecedented events of 2020, our commitment to our mission and values has allowed our employees to come together as One Team to keep each other safe while continuing to exceed our customers’ expectations. These efforts have created tremendous value for all of our stakeholders.
Your vote is very important to us. I encourage you to sign and return your proxy card or use telephone or Internet voting so that your shares will be represented and voted at the meeting.
Thank you for your continued support. We look forward to seeing you on April 30, 2021.
Sincerely,
Kevin P. Clark
President and Chief Executive Officer
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2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
Notice of Annual General Meeting of Shareholders
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Friday, April 30, 2021 8:00 a.m. Eastern Time |
Place Meeting live via the Internet – please visit www.virtualshareholdermeeting.com/APTV2021
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Record Date The close of business March 2, 2021 |
Meeting Agenda
Presenting the Company’s accounts and auditors’ reports for the fiscal year ended December 31, 2020 to the shareholders, passing the following resolutions, and transacting such other business as may properly come before the Annual Meeting:
| • | Ordinary Resolutions |
Election of Directors
| THAT the following directors be elected as directors of the Company: |
| 1) | Kevin P. Clark |
| 2) | Richard L. Clemmer |
| 3) | Nancy E. Cooper |
| 4) | Nicholas M. Donofrio |
| 5) | Rajiv L. Gupta |
| 6) | Joseph L. Hooley |
| 7) | Merit E. Janow |
| 8) | Sean O. Mahoney |
| 9) | Paul M. Meister |
| 10) | Robert K. Ortberg |
| 11) | Colin J. Parris |
| 12) | Ana G. Pinczuk |
Auditors
| 13) | THAT Ernst & Young LLP be re-appointed as the auditors of the Company until the Annual Meeting of the Company to be held in 2022, that the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm is ratified and that directors are authorized to determine the fees to be paid to the auditors. |
| • | Advisory, Non-Binding Resolution |
Executive Compensation
| 14) | THAT the Company’s shareholders approve, on an advisory, non-binding basis, the Company’s executive compensation. |
Resolutions 1 to 13 will be proposed as ordinary resolutions, and Resolution 14 will be proposed as an advisory, non-binding resolution.
| • | Record Date |
You are entitled to vote only if you were a shareholder of Aptiv PLC at the close of business on March 2, 2021. Holders of ordinary shares of Aptiv are entitled to one vote for each share held of record on the record date.
APTIV PLC 1
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Notice of Annual General Meeting of Shareholders (continued)
| • | Attendance at the Virtual Annual Meeting |
Due to the public health impact of the COVID-19 pandemic and out of an abundance of caution to support the health and well-being of our employees, shareholders and other stakeholders, the Board of Directors has determined to hold a virtual annual meeting in order to facilitate shareholder attendance and participation by enabling shareholders to participate from any location and at no cost. We are committed to ensuring that shareholders will be afforded the same rights and opportunities to participate as they would at an in-person meeting. You will be able to attend the meeting online, vote your shares electronically and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/APTV2021.
To be admitted to the Annual Meeting at www.virtualshareholdermeeting.com/APTV2021 you must enter the 16-digit control number found on your proxy card, voting instruction form or notice you last received. You may vote and will be able to ask questions and hear responses to questions during the Annual Meeting by following the instructions available on the meeting website during the meeting. We hope you will be able to attend the Annual Meeting. If you expect to attend, please check the appropriate box on the proxy card when you return your proxy or follow the instructions on your proxy card to vote and confirm your attendance by telephone or Internet.
| • | Where to Find More Information about the Resolutions and Proxies |
Additional information regarding the business to be conducted and the resolutions is set out in the proxy statement (the “Proxy Statement”) and other proxy materials, which can be accessed by following the instructions on the Notice of Internet Availability of Proxy Materials that accompanies this Notice of Annual Meeting of Shareholders.
You are entitled to appoint one or more proxies to attend the Annual Meeting and vote on your behalf. Your proxy does not need to be a shareholder of the Company. Instructions on how to appoint a proxy are set out in the Proxy Statement and on the proxy card.
BY ORDER OF THE BOARD OF DIRECTORS
PLEASE NOTE THAT YOU WILL NEED PROOF THAT YOU OWN APTIV SHARES AS OF THE RECORD DATE TO BE ADMITTED TO THE ANNUAL MEETING.
This Notice of Annual Meeting of Shareholders and the Proxy Statement are being distributed or made available on or about March 15, 2021.
2 APTIV PLC
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APTIV PLC 3
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Table of Contents (continued)
| COMPENSATION COMMITTEE REPORT | 47 | |||
| 2020 SUMMARY COMPENSATION TABLE | 48 | |||
| 2020 GRANTS OF PLAN-BASED AWARDS | 50 | |||
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| APPENDIX A | A-1 | |||
APTIV PLC 5
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2021 Proxy Statement — Summary
This summary highlights information contained elsewhere in the Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting.
| APTIV PLC | 6 |
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| Delivering sustainable mobility solutions
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OUR MISSION Aptiv innovates at the intersection of |
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SAFE A society with zero road fatalities, zero |
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GREEN Zero emissions, minimizing vehicles’ total
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CONNECTED Seamless integration between the vehicle,
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APTIV BY THE NUMBERS
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$18B
2020 Business |
$13.1B
2020 Revenue |
10%
2020 Growth over Market |
$1.94
2020 Earnings
Adjusted for restructuring and other special items |
$1.3B
2020 Investment in engineering |
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18,200
Scientists and |
180,000+
People |
124
Manufacturing facilities |
12
Major technical centers
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44
Countries |
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| OUR BUSINESS SEGMENTS | ||||||||
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Uniquely positioned as the only provider of both the vehicle’s brain and nervous system We build the intelligence that brings to life the software-defined vehicle of the future and the technologies that connect every part of the vehicle, enable it to sense the world around it and allow it to communicate. | ||||||||
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Advanced Safety & User Experience |
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Signal & Power Solutions | |||||
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Encompasses our deep expertise in software-enabled solutions that improve the safety, comfort and convenience of the vehicle, supported by core capabilities in advanced computing, connectivity, data management and analytics. |
Leverages our heritage as a global architecture provider and systems integrator to deliver the high-speed data and high-power electrical systems required for feature-rich, highly automated vehicles. | |||||||
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The democratization of the technologies in these business segments has the potential to save lives, save the industry billions in costly vehicle repairs, and reduce carbon emissions. | ||||||||
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2020 Aptiv at a Glance (continued)
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SAFE |
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GREEN |
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CONNECTED | |||||||||||||||||
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SOCIETAL CHALLENGES |
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| 94% Of all accidents are caused by human error NHTSA
1.35 million Road traffic deaths annually World Health Organization
OUR SOLUTIONS |
4.6 Metric tons of CO2 emitted from a typical passenger vehicle per year EFA
#1 Air pollution is the top environmental cause of death in the European Union European Environmental Agency |
125 billion Connected loT devices worldwide by 2030 IHS Markit
50% Average annual increase of global data transmissions over the next 15 years IHS Markit |
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| • Perception systems, tracking and sensor fusion
• Active safety, hands-free HMI and interior sensing software
• ADAS domain controllers and ECUs
• High-fidelity, high-reliability
• Integration, validation and testing of safety-critical systems |
• High voltage wiring and electrical centers
• High voltage connectors, plug-in chargers and cord sets
• Aluminum wire harnesses for light-weighting
• Sensing and compute platforms optimized for power management and consumption
• Architecture optimization for mass and weight reduction |
• Secure connected gateways (cellular, satellite, DSRC, GPS)
• Wireless (Wi-Fi, Bluetooth), media modules and consumer ports
• V2X solutions: vehicle-to-vehicle / infrastructure / grid
• Over-the-air (OTA) updates for software and firmware
• Edge processing, cloud analytics and cybersecurity
• Ruggedized electronic and automotive-grade connection systems |
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2020 Aptiv at a Glance (continued)
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| Ethisphere Institute: 2021 World’s Most Ethical Companies® for the ninth year in a row.
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Included in the FTSE4Good Index Series, demonstrating strong environmental, social and governance practices measured against globally recognized standards.
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EcoVadis: 68/100, Gold rating. This result places Aptiv among the top 5% of companies assessed by EcoVadis. |
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| Carbon Disclosure Project: Volunteer respondent to climate investor carbon and water reporting since 2012. CDP Climate Change Score: B.
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Included in the Dow Jones Sustainability Indices (DJSI); DJSI tracks the stock performance of the world’s leading companies in terms of economic, environmental and social criteria.
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Sustainalytics: Low Risk ESG Risk Rating. Ranked No. 5 in the Auto Parts industry category. |
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| Ranked No. 4 in the Autos & Parts industry category and included in the JUST U.S. Large Cap Equity ETF.
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In 2020, Aptiv received a rating of AA (on a scale of AAA-CCC) in the MSCI ESG Ratings assessment*.
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Named to Fast Company’s prestigious annual list of the World’s Most Innovative Companies for 2020.
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* The use by Aptiv of any MSCI ESG research LLC or its affiliates (“MSCI”) data, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute a sponsorship, endorsement, recommendation, or promotion of Aptiv by MSCI. MSCI services and data are the property of MSCI or its information providers, and are provided ‘as-is’ and without warranty. MSCI names and logos are trademarks or service marks of MSCI.
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Throughout 2020, our Board of Directors and our Board committees maintained their regular schedule of meetings, quickly transitioning to virtual meetings as COVID-19 emerged. The Board’s work to provide oversight, review, and counsel related to strategy, risks, and opportunities, provided a strong foundation for management and the Board to build upon in responding quickly and appropriately to COVID-19. The risk landscape associated with the COVID-19 pandemic has been, and continues to be, discussed with the Board as well as each of the Board Committees, as appropriate. Over the course of 2020, management regularly updated our directors on COVID-19’s impacts to our business and the strategic, operational and financial risks associated with the pandemic. Discussions with the Board and the Board committees have included, among other topics, financial and operational matters, employee health and safety, plant and facility closures and implementation of Aptiv’s safe operations protocols to reopen sites, findings from outside medical experts and their evaluation of our protocols, and supply chain issues.
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(Resolutions 1 to 12)
All of our current directors, other than Lawrence A. Zimmerman, who is retiring as of the Annual Meeting, are nominated for one-year terms to serve until the 2021 annual meeting, or until such director’s earlier resignation, retirement or other termination of service. The Board extends its appreciation to Mr. Zimmerman for his years of service, his many contributions and his thoughtful insight and advice.
The Board believes that the combination of the various qualifications, skills, and breadth and depth of experiences of the director nominees contributes to an effective and well-functioning Board. The Board and the Nominating and Governance Committee believe that, individually and as a whole, the directors possess the necessary qualifications to provide effective oversight of the business and quality advice and counsel to the Company’s management. Included in each director nominee’s biography below is an assessment of their specific qualifications, attributes, skills and experience. Committee memberships listed below are as of the date of this Proxy Statement.
The Board has been informed that each nominee is willing to continue to serve as a director. If a director does not receive a majority of the vote for his or her election, then that director will not be elected to the Board, and the Board may fill the vacancy with a different person, or the Board may reduce the number of directors to eliminate the vacancy. Messrs. Donofrio, Gupta, and Mahoney were each a member of the Board prior to the Company’s initial public offering in 2011, and information included in this Proxy Statement as to each member’s tenure on our Board reflects that service.
| Kevin P. Clark
In March 2015, Mr. Clark became Aptiv’s President and Chief Executive Officer. In 2014, Mr. Clark was appointed Chief Operating Officer responsible for Aptiv’s business divisions, as well as the Global Supply Management function. Mr. Clark joined Aptiv in 2010 as Chief Financial Officer, responsible for all financial activities including strategic planning, corporate development, financial planning and analysis, treasury, accounting, and tax. Before coming to Aptiv, he was a founding partner of Liberty Lane Partners, LLC, a private equity investment firm focused on investing in and building and improving middle-market companies. Mr. Clark served as Chief Financial Officer of Fisher-Scientific International Inc., a manufacturer, distributor and service provider to the global healthcare market, from the company’s initial public offering in 2001 through the completion of its merger with Thermo Electron Corporation in 2006. He also held a number of senior management positions at Fisher-Scientific. Mr. Clark began his career in the financial organization of Chrysler Corporation. He has both a bachelor’s degree in financial administration and a master’s degree in finance from Michigan State University.
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Non-Independent Director
Director since: March 2015
Committee Membership: None
Qualifications: Mr. Clark is a proven leader with demonstrated success in creating and implementing Aptiv’s business strategy. As our CEO and former COO and CFO, Mr. Clark provides the Board significant strategic, financial and industry expertise.
Other Public Boards: None Age: 58
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Election of Directors (continued)
| Richard L. Clemmer
Mr. Clemmer is a global technology CEO, most recently leading the turnaround of NXP Semiconductors as Chief Executive Officer and President, a position he held from 2009 to May 2020. He continues to serve NXP as a Strategic Advisor. Prior to NXP, he was a senior advisor to Kohlberg Kravis Roberts & Co., a private equity firm, from 2007 to 2008. He also served as President and Chief Executive Officer of Agere Systems Inc. (“Agere Systems”), an integrated circuits components company from 2005 to 2007. Prior to joining Agere Systems, Mr. Clemmer held a number of executive leadership positions at Texas Instruments and Quantum Corporation. He holds a bachelor’s degree in business administration from Texas Tech University and a master of business administration from Southern Methodist University. |
Independent Director
Director since: July 2020
Committee Membership: Finance Committee and Innovation and Technology Committee
Qualifications: Mr. Clemmer brings to the Board significant leadership experience in the high tech industry, including experience with semiconductor and software companies, and brings valuable experience leading organizations through strategic transactions.
Other Current Public Boards: HP Inc.
Former Public Boards: NCR Corporation (2008-2020), NXP Semiconductors N.V. (2009-2020) Age: 69 | |
| Nancy E. Cooper
Ms. Cooper is the former Executive Vice President and Chief Financial Officer of CA Technologies (“CA”), an IT management software provider, a position she held from August 2006 until she retired in May 2011. Prior to joining CA, Ms. Cooper served as the Chief Financial Officer of IMS Health, Inc. from 2001 to 2006 and, prior to that, as Chief Financial Officer for Reciprocal, Inc. from 2000 to 2001. Ms. Cooper began her career at IBM Corporation in 1976 where she held positions of increasing responsibilities over a 22-year period that focused on technology strategy and financial management. Ms. Cooper received a bachelor of arts degree in both economics and political science from Bucknell University and a master of business administration from the Harvard Graduate School of Business. |
Independent Director
Director since: February 2018
Committee Membership: Audit Committee (Chair) and Innovation and Technology Committee
Qualifications: Ms. Cooper brings to the Board significant experience leading a global public finance organization, and contributes financial, risk management, technology and strategy expertise.
Other Current Public Boards: Brunswick Corporation and The Mosaic Company
Former Public Boards: Teradata Corporation (2009-2017) Age: 67 | |
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Election of Directors (continued)
| Nicholas M. Donofrio
Mr. Donofrio retired as Executive Vice President, Innovation & Technology at IBM in 2008. He began his career at IBM in 1964, and worked there for more than 40 years in various positions of increasing responsibility, including Division Director; President for Advanced Workstations Division; General Manager, Large Scale Computing Division; and Senior Vice President, Technology & Manufacturing. Mr. Donofrio earned a bachelor of science degree from Rensselaer Polytechnic Institute and holds a master’s degree from Syracuse University. |
Independent Director
Director since: December 2009
Committee Membership: Innovation and Technology Committee (Chair) and Nominating and Governance Committee
Qualifications: Mr. Donofrio brings to the Board significant technology expertise, providing us with valuable insight regarding technology and innovation strategies.
Former Public Boards: Advanced Micro Devices, Inc. (2009-2018) and Bank of New York Mellon Corporation (1999-2017) Age: 75 | |
| Rajiv L. Gupta
Mr. Gupta is former Chairman and CEO of Rohm and Haas Company, a worldwide producer of specialty materials, a position he held from 1999 to 2009. Mr. Gupta began his career at Rohm and Haas in 1971 and served in a broad range of global operations and financial leadership roles. Mr. Gupta received a bachelor of science degree in Mechanical Engineering from the Indian Institute of Technology, a master of science degree in Operations Research from Cornell University and a master’s degree in business administration with a concentration in Finance from Drexel University. |
Independent Director and Chairman of the Board
Director since: November 2009
Committee Membership: Compensation and Human Resources Committee (Chair) and Nominating and Governance Committee (Chair)
Qualifications: Mr. Gupta’s professional experience, including as Chairman and CEO of a global public company and many other board assignments, enable him to contribute his expertise in corporate leadership, public company governance, strategic analysis, operations and executive compensation matters.
Other Current Public Boards: Avantor, Inc., DuPont de Nemours, Inc.
Former Public Boards: Howmet Aerospace Inc. (formerly Arconic Inc.) (2016-2020), HP Inc. (formerly Hewlett Packard) (2009-2017), The Vanguard Group, Inc. (2001-2017) and Tyco International plc (2005-2016) Age: 75
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Election of Directors (continued)
| Joseph L. Hooley
Mr. Hooley is the former Chairman of the Board and Chief Executive Officer of State Street Corporation, one of the world’s leading providers of financial services to institutional investors. He retired as the non-executive Chairman of the Board of State Street, effective December 31, 2019, and as its Chief Executive Officer on December 31, 2018. He served as State Street’s Chairman from 2011 to 2019 and as Chief Executive Officer from 2010 to 2018 and President and Chief Operating Officer from 2008 to 2014. From 2002 to 2008, Mr. Hooley served as Executive Vice President and head of the Investor Services Division of State Street and, in 2006, was appointed Vice Chairman and Global Head of Investment Servicing and Investment Research and Trading of State Street. Mr. Hooley holds a bachelor of science degree from Boston College.
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Independent Director
Director since: January 2020
Committee Membership: Audit Committee and Compensation and Human Resources Committee
Qualifications: Mr. Hooley’s long tenure as a public company executive leading a global financial services organization provides the Board significant expertise in management, strategic planning, corporate governance and a global business perspective.
Other Current Public Boards: Exxon Mobil Corporation
Former Public Boards: State Street Corporation (2009-2019) Age: 63 | |
| Merit E. Janow
Professor Janow is the Dean, School of International and Public Affairs (SIPA) at Columbia University, a position she has held since 2013. She also serves, since 1994, as a Professor of Professional Practice, International Economic Law and International Affairs at Columbia University. Previously, she directed the program in international finance and economic policy. Professor Janow regularly teaches advanced courses in frontier topics in international trade law and policy, World Trade Organization (WTO) law, at Columbia Law School, and international economic policy and China in the Global Economy at SIPA. She has published numerous articles and several books on international trade and economic matters. Professor Janow served as one of seven members of the WTO’s Appellate Body from 2003 to 2007, as the Executive Director, the International Competition Policy Advisory Committee of the U.S. Department of Justice, Antitrust Division from 1997 to 2000, and Deputy Assistant U.S. Trade Representative for Japan and China from 1990 to 1993. Professor Janow served on the board of directors and then as chair of the Nasdaq Stock Markets LLC of the Nasdaq OMX Group from 2005 to 2016. She holds a bachelor of arts degree from the University of Michigan and a juris doctorate from Columbia Law School at Columbia University.
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Director Nominee
Qualifications: Professor Janow is qualified to serve as director of the Company based on her extensive knowledge and experience in international trade, economics, policy and regulatory matters which provide valuable insight to the Company given the global nature of its business.
Other Current Public Boards: Mastercard Inc., Trimble Inc. Age: 62 | |
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Election of Directors (continued)
| Sean O. Mahoney
Mr. Mahoney is a private investor with over two decades of experience in investment banking and finance. Mr. Mahoney spent 17 years in investment banking at Goldman, Sachs & Co., where he was a partner and head of the Financial Sponsors Group, followed by four years at Deutsche Bank Securities, where he served as Vice Chairman, Global Banking. During his banking career, Mr. Mahoney acted as an advisor to companies across a broad range of industries and product areas. He earned his undergraduate degree from the University of Chicago and his graduate degree from Oxford University, where he was a Rhodes Scholar. |
Independent Director
Director since: November 2009
Committee Membership: Finance Committee and Nominating and Governance Committee
Qualifications: Through his experience in investment banking and finance, Mr. Mahoney provides the Board with expertise in financial and business strategy, capital markets, financing, and mergers and acquisitions.
Other Current Public Boards: iHeartMedia, Inc.
Former Public Boards: Alcoa Inc. (2016), Cooper-Standard Holdings, Inc. (2015-2018) and Howmet Aerospace Inc. (formerly Arconic Inc.) (2016-2020) Age: 58 | |
| Paul M. Meister
Mr. Meister is co-founder, and since 2008, Chief Executive Officer of Liberty Lane Partners, LLC, a private investment company with investment holdings in healthcare, technology and distribution-related industries. He was President of MacAndrews & Forbes Incorporated (“M&F”) from 2014 to 2018, a private company that owns or controls a diverse set of businesses, including: Revlon, Scientific Games, Harlan Clarke Holdings Corp., vTv Therapeutics LLC, SIGA Technologies, and AM General. During 2018, Mr. Meister also served, on an interim basis, as Executive Vice Chairman of Revlon, Inc. a leading beauty products company, and acted as Revlon’s principal executive officer. Mr. Meister served from 2010 to 2014 as Chairman and CEO of inVentiv Health (now Syneos Health), a leading provider of commercial, consulting and clinical research services to the pharmaceutical and biotech industries. Mr. Meister was Chairman of Thermo Fisher Scientific, Inc., a scientific instruments equipment and supplies company, from November 2006 to April 2007. He was previously Vice Chairman of Fisher Scientific International, Inc., a predecessor of Thermo Fisher Scientific, Inc., from 2001 to 2006, and Chief Financial Officer of Fisher Scientific International, Inc. from 1991 to 2001. Earlier in his career, Mr. Meister served in a number of executive leadership positions at Wheelabrator Technologies Inc., The Henley Group Inc., and AlliedSignal Inc. (now Honeywell International, Inc.). He began his career with Ford Motor Company. Mr. Meister holds a bachelor of arts degree from the University of Michigan and a master of business administration from Northwestern University. |
Independent Director
Director since: July 2019
Committee Membership: Compensation and Human Resources Committee and Finance Committee
Qualifications: Mr. Meister’s extensive public company experience, as both an executive and a board member, provides the Board significant expertise in management, strategy, finance and capital markets, operations and mergers and acquisitions.
Other Current Public Boards: Amneal Pharmaceuticals, Inc., Oaktree Acquisition Corp. II, Quanterix Corporation
Other Public Boards: LKQ Corporation (1999-2018), Revlon, Inc. (2016-2018), Scientific Games Corporation (2012-2020) and vTv Therapeutics Inc. (2015-2018) Age: 68 | |
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Election of Directors (continued)
| Robert K. Ortberg
Mr. Ortberg is the former Chief Executive Officer of Collins Aerospace, a United Technologies company from December 2018 to February 2020. Following his retirement from Collins Aerospace, he served as a Special Advisor to the office of the Chief Executive Officer for Raytheon Technologies Corporation, an aerospace and defense company that provides advanced systems and services for commercial, military and government customers worldwide until March 2021. He previously served as the Chief Executive Officer of Rockwell Collins from 2013 to 2018 and served as President from 2012 to 2018. He served as Rockwell Collins’ Executive Vice President, Chief Operating Officer, Government Systems from 2010 to 2012 and as Executive Vice President, Chief Operating Officer, Commercial Systems from 2006 to 2010. Prior to that time, he held other executive positions at Rockwell Collins, which he joined in 1987. Mr. Ortberg has a bachelor of science degree in mechanical engineering from the University of Iowa. |
Independent Director
Director since: September 2018
Committee Membership: Audit Committee and Innovation and Technology Committee
Qualifications: Mr. Ortberg brings to the Board a track record of operational and technology leadership, accelerating company growth and creating shareholder value, coupled with a strong background in transformation and innovation.
Other Current Public Boards: Raytheon Technologies Corporation
Former Public Boards: Rockwell Collins, Inc. (2013-2018) Age: 60 | |
| Colin J. Parris
Dr. Parris currently serves as the Senior Vice President and Chief Technology Officer at GE Digital. He joined the General Electric Company in 2014 as the Vice President, GE Software Research. Prior to joining GE, he spent two decades at IBM in a variety of executive roles, serving most recently as Vice President, Systems Research in the IBM T.J. Watson Research Division from 2013 to 2014 and General Manager for IBM’s Power Systems business from 2010 to 2013. Dr. Parris received a bachelor’s degree in electrical engineering from Howard University, a master’s degree in management from Stanford University, and master’s degrees in electrical engineering and computer science, and a doctorate in electrical engineering from the University of California, Berkeley. |
Independent Director
Director since: December 2017
Committee Membership: Audit Committee and Innovation and Technology Committee
Qualifications: Dr. Parris has an extensive technology background with significant experience in software and leading digital transformations. His current focus on data software and artificial intelligence provides valuable knowledge to the Board.
Other Public Boards: None Age: 59 | |
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Election of Directors (continued)
| Ana G. Pinczuk
Ms. Pinczuk is the Chief Development Officer for Anaplan, Inc., which provides a cloud-based connected planning platform that helps connect organizations and people to make better and faster decisions. She joined Anaplan in February 2019 as the Chief Transformation Officer, following positions as the President of Hewlett Packard Enterprise’s Pointnext technology services organization, the Executive Vice President and Chief Product Officer of Veritas Technologies LLC, a data management provider specializing in information protection, availability, and insight solutions, and Senior Vice President and General Manager, Backup and Recovery for Symantec Corporation, all in the period from 2015 to 2018. From 2000 until 2015, Ms. Pinczuk served in various executive positions with Cisco Systems, Inc., including serving as Senior Vice President, Sales from 2014 to 2015, Senior Vice President, Services Transformation and Chief Operating Officer from 2013 to 2014, and Vice President, Global Technical Services from 2009 until 2013. Prior to joining Cisco, Ms. Pinczuk spent 15 years with AT&T, Inc., in positions of increasing responsibility. Ms. Pinczuk earned both undergraduate and graduate mechanical engineering degrees from Cornell University, an executive master’s degree in technology management from the University of Pennsylvania and a master’s degree in software management from Carnegie Mellon University. |
Independent Director
Director since: November 2016
Committee Membership: Audit Committee and Innovation and Technology Committee
Qualifications: Ms. Pinczuk’s broad technology background spans mobile, IP networking, software, data storage and security, making her a strong contributor to the Board as Aptiv accelerates its innovation in new mobility technologies.
Former Public Boards: KLA–Tencor Corporation (2018-2019) Age: 57 | |
The Board of Directors recommends a vote “FOR” each of the 12 director nominees named above. If you complete the enclosed proxy card, unless you direct otherwise on that card, the shares represented by that proxy will be voted FOR the election of all 12 nominees.
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Board and Governance Information
| Size of Board | 12 | |
| Number of Independent Directors | 11 | |
| Mandatory Retirement Age | 75 | |
| Non-Executive Chairman | ✓ | |
| Annual Election of Directors | ✓ | |
| Executive Sessions of Independent Directors at each Board Meeting | ✓ | |
| Annual Board and Committee Evaluations | ✓ | |
| Independent Audit, Compensation and Human Resources and Nominating and Governance Committees | ✓ | |
| Director Stock Ownership Guidelines | ✓ | |
| Code of Ethical Business Conduct Applies to all Directors and Employees | ✓ | |
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Board Practices (continued)
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Board Practices (continued)
Diversity, Skills and Experience of Our Director Nominees
The table below summarizes some of the experience, qualifications, attributes and skills of our director nominees. This high-level summary is not intended to be an exhaustive list of each of our director nominee’s skills or contributions to the Board; we look to directors to be knowledgeable in these areas as it relates to Aptiv. We have identified below the areas where each director has specific expertise or prominence that he or she brings to the Board. Further information on each director nominee, including some of their specific experience, qualifications, attributes or skills is set forth in the biographies in “Election of Directors” above.
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Board Practices (continued)
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Board Practices (continued)
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During 2020, the Board held 11 in-person or virtual meetings. All of our directors attended at least 75% of the Board and Committee meetings on which they serve. In addition, all directors are expected to attend the Annual Meeting of Shareholders, and in 2020, all directors virtually attended the Annual Meeting.
In addition to the formal meetings held, which increased in number due to COVID-19, the Board and its Committees were regularly virtually briefed by management on the Company’s response to COVID-19.
Our Board has the following five committees: Audit; Compensation and Human Resources (CHRC); Finance; Innovation and Technology (ITC); and Nominating and Governance (Nom Gov). Committee charters are available on our website at aptiv.com by clicking on the tab “Investors”, then the heading “Governance” and then the caption “Governance Documents”. Committee membership for 2020 is set forth below:
| Board Committees | |||||||||||||||||||||||||
| Name | Audit | CHRC | Finance | ITC | Nom Gov | ||||||||||||||||||||
| Kevin P. Clark |
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| Richard L. Clemmer |
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| Nancy E. Cooper |
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| Nicholas M. Donofrio |
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| Rajiv L. Gupta |
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| Joseph L. Hooley |
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| Sean O. Mahoney |
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| Paul M. Meister |
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| Robert K. Ortberg |
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| Colin J. Parris |
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| Ana G. Pinczuk |
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| Lawrence A. Zimmerman |
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“C” = Chair of Committee
“X” = Member of Committee
During 2020, Mr. Clemmer was appointed to the Finance Committee and the Innovation and Technology Committee, Mr. Hooley was appointed to the Audit Committee and the Compensation and Human Resources Committee, and Mr. Ortberg joined the Audit Committee and stepped down from the Compensation and Human Resources Committee. In 2021, in anticipation of Mr. Zimmerman’s retirement, Mr. Meister was appointed Chair of the Finance Committee.
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Board Committees (continued)
| Committee | Primary Responsibilities | Number of Meetings in 2020 | ||
| Audit |
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| Responsible for the engagement of the registered independent public accounting firm and the review of the scope of the audit to be undertaken by the registered independent public accounting firm. Responsible for oversight of the adequacy of our internal accounting and financial controls and the accounting principles and auditing practices and procedures to be employed in preparation and review of our financial statements. Responsible for oversight of risk-related matters broadly, including the Company’s enterprise risk management program, compliance program and cybersecurity.
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| Compensation and Human Resources |
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| Responsible for the oversight of the Company’s compensation philosophy and reviews and approves compensation for executive officers (including cash compensation, equity incentives and benefits). Responsible for oversight of management development and succession planning.
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| Finance |
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| Responsible for oversight of corporate finance matters, including capital structure, financing transactions, acquisitions and divestitures, minority investments, share repurchase and dividend programs, employee retirement plans, interest rate policies, commodity and currency hedging and the annual business plan, including review of capital expenditures and restructurings.
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| Innovation and Technology |
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| Responsible for oversight of the Company’s technology roadmaps and the technology landscape, product cybersecurity and assessing the overall skill set of the engineering organization.
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| Nominating and Governance |
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| Responsible for reviewing and recommending policies and procedures relating to director and board committee nominations and corporate governance policies, conducting director searches and overseeing aspects of the Company’s environmental, social and governance programs, including providing input to management on the Company’s risks, policies, strategies and programs generally related to matters of sustainability, corporate social responsibility, corporate governance and environment, health and safety management programs.
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7
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COMPENSATION DISCUSSION AND ANALYSIS
| A Note from the Chair of the Compensation Committee |
|
Dear Shareholders,
Balancing pay-for-performance with shareholder alignment is a hallmark of our executive compensation program at Aptiv. Our leadership team relentlessly focuses on the key short and long-term metrics that are critical to executing our business strategy, delivering sustainable growth, and driving shareholder value. Ever since our first say-on-pay vote in 2012, our shareholders have overwhelmingly supported our executive compensation programs. We appreciate your support and are committed to achieving the continued alignment of executive pay with shareholder interests.
Our compensation programs continue to be primarily performance-based, with a significant portion of executive pay at-risk. We consistently set performance targets that are rigorous and reflective of the business plan we communicate to investors.
As we reflect on 2020, the year proved to be much more challenging than anticipated, and certainly less predictable than any planning scenario could have foreseen. Aptiv was faced with a multitude of challenges, both operational and financial, throughout the year as the COVID-19 pandemic emerged and evolved during 2020. Our management team demonstrated exceptional performance throughout this unprecedented year by taking early and decisive actions to put the safety and welfare of our employees first, while preserving and enhancing the Company’s financial flexibility. These early actions positioned us to safely restart our global operations, ensuring flawless operational execution with zero customer disruptions, and enabling Aptiv to achieve strong financial results during the second-half of the year.
The Company’s ability to persevere during this unprecedented time and capitalize on the opportunities that emerged following the onset of the COVID-19 pandemic have driven our share price to all-time highs in the fourth quarter. Our 3-year total shareholder return (“TSR”), a metric on which we evaluate shareholder return, was at the 89th percentile of our TSR peer group.
However, the COVID-19 pandemic dramatically affected Aptiv’s financial performance throughout the year, including with respect to the financial metrics underlying our performance-based compensation programs. In light of this unprecedented year and the extraordinary performance by the management team, the Compensation Committee thoughtfully reviewed and assessed performance against the original performance objectives. Additionally, as part of our ongoing investor engagement, we solicited input from top shareholders to ensure our approach to adjustments, as detailed throughout this Proxy Statement, was consistent with our historic pay-for-performance track record and is aligned with shareholder interests. As a result, the Committee exercised its discretion and made certain adjustments in order to achieve the desired goals of our compensation plans to appropriately compensate management for their actual achievement on behalf of all stakeholders during the year.
As we position Aptiv for continued success, we strive to ensure our compensation programs strengthen and reinforce our strategy, attract and retain top talent, and continue to drive long-term shareholder value.
Thank you again for your continued support and investment in Aptiv.
Raj Gupta
Chair of the Compensation Committee
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Compensation Discussion and Analysis (continued)
| ● Our executive pay program aligns with long-term shareholder value creation. A significant portion of executive pay is performance-based, and subject to rigorous performance targets that are important to our shareholders.
● Initial decisions on our 2020 compensation plan were made prior to the COVID-19 pandemic. The compensation plan design and targets were established in January 2020, prior to the global emergence of the COVID-19 pandemic and the production shutdowns that ensued. The 2020 compensation plan design included certain changes in order to better align our compensation programs with shareholder interests, including increasing the weighting of relative TSR in our 2020-2022 long-term incentive program from 25% to 33%. In our annual incentive plan metrics, we replaced New Business Bookings with revenue Growth Over Market (“GOM”), a measure of relative revenue growth versus underlying global vehicle production. These changes strengthened alignment of our compensation programs to our strategic objectives, competitive market practices, and shareholder interests.
● All of our NEOs voluntarily reduced their base salary for the period from April 2020 through August 2020 in response to the financial pressures brought about by the COVID-19 pandemic. All NEOs also deferred their approved base salary increases until September 1, 2020.
● COVID-19 had a significant impact on achievement against both our short- and long-term original financial objectives. The impact of COVID-19, including global shutdowns, periods of reduced automotive demand, and the increased costs of keeping our employees safe rendered the previously established financial targets for our annual incentive plan and performance-based restricted stock units (“RSUs”) unachievable. In light of the Company’s strong operating and financial performance, including in response to COVID-19 and the unprecedented challenges it presented, and the extraordinary efforts of our employees and leaders around the world to enable the success of the Company following the onset of the COVID-19 pandemic, the Compensation Committee determined this outcome did not reflect our pay-for-performance philosophy.
● The Compensation Committee recognized the need to re-align the compensation programs in light of COVID-19. In response to management’s decisive actions to successfully respond to and generate strong results in light of the COVID-19 pandemic, the Compensation Committee evaluated changes to compensation programs. The key principles underlying the Compensation Committee’s consideration of compensation program changes were to:
● In July 2020, the Compensation Committee prudently reset the goals and reduced payout opportunities in the Annual Incentive Plan. As the industry emerged from global shutdowns and the Company successfully restarted operations, the Compensation Committee approved the Updated Incentive Plan (as defined below) to motivate participating employees, including executives, and to encourage sustained focus on enterprise-wide goals. The Updated Incentive Plan provided reduced target and maximum incentive opportunities at 50% and 65% of original target payout, respectively. |
3-YEAR TSR
49.6% 89TH PERCENTILE OF OUR TSR PEER GROUP
BELOW TARGET INCENTIVE PAYOUT
65% ANNUAL INCENTIVE
95% 2018-2020 LONG-TERM INCENTIVE
CEO BASE SALARY REDUCTION
50% BASE SALARY REDUCTION FROM APRIL-AUGUST 2020
3 YEAR AVERAGE SAY-ON-PAY 96% |
Consider the welfare of our employees first
Preserve value for our shareholders
Compensate and reward performance and value creation
Reduce pay opportunity in conjunction with adjusted goals
Cap long-term payouts at target if we do not outperform our peers
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Compensation Discussion and Analysis (continued)
| ● | In December 2020, the Compensation Committee took thoughtful action to adjust long-term compensation programs in response to COVID-19. Due to the emergence of the COVID-19 pandemic and resultant impacts on the Company’s industry and operations in 2020, the Compensation Committee determined that it was reasonable and appropriate to truncate the performance period for the 2018-2020 performance cycle to measure achievement of the financial results based on actual and estimated financial performance as of December 31, 2019. In addition, adjustments were made to restore our 2019 and 2020 compensation programs’ intended effectiveness. Ensuring alignment of pay-for-performance with shareholder value creation remains a key focus and ensures that the management team is accountable for strategic and operational execution. The Compensation Committee made the following changes: |
| • | Adjusted the original 3-year financial performance objectives for the 2019 and 2020 performance-based RSU grants, while maintaining the overall plan design. The revised targets were established at levels that the Compensation Committee deemed rigorous and challenging, while acknowledging the current operating environment; |
| • | Reduced the maximum payouts for 2019 and 2020 performance-based RSU grants from 200% to 150%; with payouts capped at 100% if relative TSR is below median; and |
| • | Did not grant any new incremental awards. |
| ● | Our 3-year TSR was 49.6% – at the 89th percentile of our TSR peer group, reflecting operational performance well above industry peers. Despite COVID-19 disruptions, our Company delivered strong shareholder returns in 2020, driven by its operating and financial performance to which our management team contributed significantly. |
| ● | Even following these adjustments, our executives were awarded below-target short- and long-term payouts. Although the Company and its leadership exceeded expectations in navigating the unprecedented environment throughout 2020, the Compensation Committee acknowledged that the original targets were not achieved. Following the compensation program adjustments described above, our CEO earned 65% of his annual incentive target for 2020, and 95% of his target shares for the 2018-2020 long-term incentive award. In determining these levels, the Committee applied negative discretion to further align compensation earned by our executives with the austerity measures taken in 2020, including cost reduction and cash conservation actions, while recognizing the overall impact on our employees. |
| Plan | Before Adjustments | After Adjustments | After Application of Negative Discretion | |||
| Annual Incentive Plan | 10% payout (GOM) | 65% payout | 65% payout | |||
| 2018-2020 performance-based RSUs | 49% payout | 106% payout | 95% payout | |||
| ● | Accounting guidelines distort the compensation reported in our 2020 Summary Compensation Table. The approved adjustments to 2019-2021 and 2020-2022 long-term incentive grants, while maintaining the value and intent of the original grants, require disclosure in the “Stock Awards” column of the “2020 Summary Compensation Table” as additional stock awards granted in 2020 due to the accounting impact of the program adjustments. For example, the amount disclosed in the “Stock Awards” column for our CEO of approximately $28.5 million reflects his original 2020 performance-based RSU grant as well as including the accounting impact of the adjustments approved in December 2020 to the 2019 and 2020 grants. What would typically be disclosed for this amount is approximately $10.7 million, which reflects the grant date fair value of the 2020 annual grant at the time it was made. Refer to the “Supplemental Compensation Information and Reconciliation” section below, which is provided in order to illustrate the implicit value of awards for our CEO after these adjustments. |
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Compensation Discussion and Analysis (continued)
2020 Company Financial and Business Performance Highlights. COVID-19 affected nearly every facet of our operations. In spite of these impacts, our 2020 performance reflects our team’s dedication and efforts to ensure the health and safety of our employees first, while positioning the Company for flawless execution for our customers as operations resumed. Management’s actions preserved and enhanced Aptiv’s financial strength during the COVID-19 pandemic and generated strong returns following the restart of our global operations.
Our financial and business achievements in 2020 include the following:
| • | Strengthening our balance sheet and liquidity position in order to continue to invest in value-enhancing opportunities, despite COVID-19 |
| • | Leveraging opportunistic market pricing dynamics and strong market demand by issuing $1.15 billion of ordinary shares and $1.15 billion of 5.50% preferred shares; and |
| • | Extending the maturity of substantially all of our existing revolving credit facility to August 2022. |
| • | Acting decisively in response to the global COVID-19 pandemic |
| • | Taking early and decisive actions to preserve our financial strength, including temporarily reducing executive pay, reducing capital expenditures, and suspending share repurchases and ordinary share dividends; and |
| • | Designing and successfully implementing our safe operations protocols, which enabled our facilities to restart safely and operate with zero production disruptions following the restart. |
| • | Generating strong results despite the COVID-19 pandemic |
| • | Delivering sustained outperformance, with 10% sales growth over market, attributable to our portfolio of leading technologies aligned with secular growth drivers; |
| • | Generating $1.621 billion of Adjusted EBITDA and cash flow before financing of $836 million, despite the COVID-19 pandemic’s negative impact on automotive production; and |
| • | Achieving 49.6% TSR over the period 2018 through 2020, illustrating our investors’ belief in our long-term strategy and current financial performance. |
| • | Continuing our relentless focus on cost structure and operational optimization |
| • | Maximizing our operational flexibility and profitability at all points in the normal automotive business cycle, by having approximately 97% of our hourly workforce based in best cost countries, and approximately 20% of our hourly workforce composed of contract and temporary employees; and |
| • | Recruiting and retaining top talent from various industries, including technology. |
| • | Continuing to execute on our long-term Safe, Green and Connected strategy to enable a more sustainable future |
| • | Furthering our leadership position in automated driving through the formation of the Motional autonomous driving joint venture with Hyundai, which is focused on the design, development and commercialization of autonomous driving technologies; |
| • | Expanding our market relevant portfolio to address the industry’s top challenges, including high voltage electrification and active safety technologies; and |
| • | Significantly enhancing our commitment to corporate sustainability. |
Appendix A contains a reconciliation of non-GAAP financial measures used in this disclosure to U.S. GAAP financial measures.
2020 Shareholder Engagement. Aptiv is committed to proactive engagement, communication, and transparency with shareholders. During 2020, we engaged institutional shareholders with respect to a variety of topics related to employee and board culture, board recruitment and refreshment, safety performance and sustainability efforts, and executive compensation. Raj Gupta, the Chairman of the Board and Chairman of the Compensation Committee, as well as members of management,
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Compensation Discussion and Analysis (continued)
participated, as appropriate. In these meetings, we solicited feedback and provided information to our shareholders. We also specifically solicited insight regarding shareholder sentiment about potential adjustments to executive compensation programs.
In addition, members of management met with our investors throughout the year to discuss our businesses, technologies, end markets, financial results, operational execution and our sustainability efforts at numerous conferences and roadshows, in addition to Company-hosted events and quarterly conference calls. We also shared financial and ESG information relevant to our shareholders through our Sustainability Report, our Investor Relations website, our Annual Report and this Proxy Statement.
2020 Say-on-Pay. At our 2020 Annual Meeting of Shareholders, we received support from approximately 96% of votes cast as to our named executive officers’ compensation. Management and the Compensation Committee reviewed our shareholders’ 2020 Say-on-Pay vote and believe it to be a strong indication of continuing support for the Company’s executive compensation program and pay-for-performance philosophy. Therefore, the Compensation Committee maintained its overall pay-for-performance philosophy, compensation objectives and governing principles it has used in recent years when making decisions or adopting policies regarding executive compensation for 2020 and subsequent years. However, given the significant disruptions caused by COVID-19 after the establishment of 2020 executive compensation goals, the Compensation Committee and management believed it was important to solicit additional shareholder insight related to executive compensation practices related to COVID-19, as described above.
COVID-19 Impacts on Shareholders, Employees, and Executives. Our Board and management team took immediate and decisive actions in response to COVID-19 to protect the interests of many stakeholder groups, including employees, shareholders, customers, suppliers, and our communities.
For those actions that related to or impacted compensation, our Compensation Committee’s philosophy was simple:
| • | Ensure our shareholders’ value is preserved and our non-executive employees’ compensation is addressed first, with our executives’ compensation adjusted afterward; |
| • | Reasonably adjust executive compensation for the impacts of COVID-19 on our outstanding compensation programs in order to preserve our pay-for-performance philosophy, and design these adjustments to be more resilient to potential future COVID-19 impacts; |
| • | Reduce pay opportunities in light of the updated metrics and targets following the impacts of COVID-19; and |
| • | Transparently report the compensation program adjustments. |
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Compensation Discussion and Analysis (continued)
We believe we have been successful in following those principles. The table below sets forth the short-term impacts of the COVID-19 pandemic on our shareholders, our employees and our executives, and the status of these effects at the end of 2020.
| SHORT-TERM IMPACTS | END-OF-YEAR IMPACTS | |||||||
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INCREASING SHAREHOLDER VALUE
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Temporary stock price decline |
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Stock price reached all-time highs in Q4 2020
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Stock price on March 18th closed at $33.55, down 64% from the December 31, 2019 close
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At December 31, 2020, stock closed at
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Dividend suspended in March 2020
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On a relative basis, our TSR performed at the 89th percentile within our TSR peer group
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| CARING FOR OUR EMPLOYEES
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Temporary lay-offs for workers in production facilities aligned with customer and government-mandated shutdowns |
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Approved a program to provide financial recognition to approximately 15,000 employees (excluding NEOs and other officers)
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Furloughs for salaried non-plant roles |
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Implemented previously-approved salary increases for salaried employees, effective September 1, 2020
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Suspension of annual salary increases |
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Reinstated Aptiv’s retirement plan contributions for US, Ireland, and Mexico employees, effective January 1, 2021
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Suspension of retirement plan contributions in the US, Ireland and Mexico |
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Shared Aptiv’s safety protocols with governments for adoption
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Implemented SAFE start protocols and contact tracing systems to keep our employees safe
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Provided PPE to our communities |
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Following mitigation of impacts of COVID-19 on shareholders and employees, the Compensation Committee adjusted incentive programs to restore their motivational impact and preserve our pay-for-performance philosophy |
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RETAINING AND MOTIVATING OUR EXECUTIVES
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Voluntary base salary reduction of 50% by the CEO and 10% by our senior officers |
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Adjusted incentive awards to restore intended motivational and retentive value and preserve our pay-for-performance philosophy
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Short- and long-term performance compensation programs decreased significantly in retentive and motivational value across all three outstanding long-term performance cycles
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Reduced upside potential in the 2020 short-term incentive award cycle and in the 2019 and 2020 long-term incentive award cycles
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Capped payouts at target if relative TSR is below median for the 2019 and 2020 long-term incentive cycles
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Compensation Discussion and Analysis (continued)
Compensation Governance and Alignment with Shareholders
Aptiv’s executive compensation program is designed to attract, retain and motivate the leaders who drive the successful execution of our business strategies, which seek to balance achievement of targeted near-term results with building long-term shareholder value through sustained execution. Our focus on pay-for-performance and corporate governance aims to help ensure alignment with the interests of our shareholders, as highlighted below:
| Pay for Performance
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More information
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90% of 2020 total target annual compensation for the CEO is at risk and 75% is granted in equity, while, on average, 81% of 2020 target annual compensation for the other NEOs is at risk and 63% is granted in equity.
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We target executive compensation to approximate a competitive range around the market median (50th percentile) and deliver compensation above or below this level as determined by performance.
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We use a structured goal-setting process for performance incentives, with multiple levels of review. |
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NEOs’ annual incentives in typical years are based on achievement of Corporate, Segment and individual performance goals.
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75% of the NEOs’ long-term incentive compensation consists of performance-based RSUs, which deliver value based on achievement of financial and relative TSR goals. The value of the remaining 25% of the NEOs’ long-term incentive compensation is awarded in the form of time-based RSUs and fluctuates with Aptiv’s share price.
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We review and analyze our pay-for-performance alignment on an annual basis. |
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| Compensation Governance
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We actively engage with our shareholders by conducting regular meetings with our major shareholders to discuss governance and executive compensation matters.
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We disclose our performance metrics.
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We maintain a reasonable severance practice with market appropriate post-employment provisions.
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We maintain stock ownership guidelines for our NEOs and directors.
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We maintain clawback, anti-hedging and anti-pledging policies.
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We offer no excise tax gross-ups or tax assistance unique to our NEOs.
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Our Compensation Committee utilizes an independent compensation consultant.
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|
Our compensation programs are designed to discourage imprudent risk.
|
46
| ||
|
|
We devote focused time to leadership development and succession planning efforts.
|
—
| ||
|
|
Our equity grant practices, including burn rate and dilution, are prudent.
|
—
| ||
|
|
The Compensation Committee is provided tally sheets to assess total compensation for our NEOs.
|
—
|
| APTIV PLC | 32 |
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2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
Compensation Discussion and Analysis (continued)
2020 Compensation Program Overview
Our Named Executive Officers
| For fiscal year 2020, the NEOs were:
| ||
|
Kevin P. Clark |
President and Chief Executive Officer (“CEO”) | |
|
Joseph R. Massaro |
Chief Financial Officer (“CFO”) and Senior Vice President, Business Operations | |
|
David Paja |
Senior Vice President and President, Advanced Safety and User Experience Segment | |
|
David M. Sherbin |
Senior Vice President, General Counsel, Chief Compliance Officer and Secretary (Mr. Sherbin is retiring from Aptiv effective April 1, 2021.) | |
|
Mariya K. Trickett
|
Senior Vice President and Chief Human Resources Officer
| |
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Compensation Discussion and Analysis (continued)
2020 Target Compensation Structure. The following table depicts the initial 2020 target annual direct compensation opportunities for the NEOs. The amounts reflected in this table were determined by the Compensation Committee in January 2020, prior to the global spread of the COVID-19 pandemic and subsequent production shutdowns in China, North America and Europe during the first half of 2020. This table does not reflect the base salary reductions, deferrals of base salary increases, and reductions of target annual incentive plan awards that subsequently occurred during 2020 in light of COVID-19 and the resultant impacts on the Company. It also does not reflect the grant date fair value of the annual 2020 long-term incentive awards granted in February 2020, or the incremental accounting impact associated with adjustments made to the outstanding performance-based equity awards during 2020, each of which are discussed in further detail below in the “Supplemental Compensation Information and Reconciliation” section. Further, this table does not include information regarding changes in pension value and non-qualified deferred compensation earnings, or information regarding all other compensation, each of which are presented in the “2020 Summary Compensation Table.” As such, this table should not be viewed as a substitute for the “2020 Summary Compensation Table.”
| Name | Base Salary ($)(1) |
Annual Incentive Target Award ($) |
Long-Term Incentive Plan Target Annual Award ($) |
Total ($) | ||||||||||||
|
Kevin P. Clark |
$ |
1,462,272 |
|
|
$2,193,408 |
|
$ |
11,000,000 |
|
$ |
14,655,680 |
| ||||
| President and Chief Executive Officer | ||||||||||||||||
|
Joseph R. Massaro |
|
935,000 |
|
|
935,000 |
|
|
3,700,000 |
|
|
5,570,000 |
| ||||
| Chief Financial Officer and Senior Vice President, Business Operations | ||||||||||||||||
|
David Paja(2) |
|
649,666 |
|
|
552,216 |
|
|
2,200,000 |
|
|
3,401,882 |
| ||||
| Senior Vice President and President, Advanced Safety and User Experience Segment |
||||||||||||||||
|
David M. Sherbin |
|
621,500 |
|
|
559,350 |
|
|
1,550,000 |
|
|
2,730,850 |
| ||||
| Senior Vice President, General Counsel, Chief Compliance Officer and Secretary | ||||||||||||||||
|
Mariya K. Trickett |
|
550,000 |
|
|
467,500 |
|
|
1,500,000 |
|
|
2,517,500 |
| ||||
| Senior Vice President and Chief Human Resources Officer | ||||||||||||||||
| (1) | Reflects base salary rates as of September 1, 2020, which were originally to be effective April 1, 2020. As described below, base salaries for the NEOs were reduced from April 2020 through August 2020 prior to the implementation of these base salary rates. |
| (2) | Mr. Paja is a German employee and his salary and bonus are paid in Euros. U.S. Dollar amounts in this Proxy Statement with respect to Mr. Paja have been converted from Euros at a rate of 1.14 Dollars to one Euro. The exchange rate used was calculated by averaging exchange rates for each calendar month in 2020. |
| APTIV PLC | 34 |
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2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
Compensation Discussion and Analysis (continued)
The following table outlines the primary elements of executive compensation for the NEOs for 2020 and indicates how these elements relate to our key strategic objectives:
| Element | Key Features | Relationship to Strategic Objectives | ||
| Total Direct Compensation | ||||
|
Annual Base Salary |
• Commensurate with job responsibilities, experience, and qualitative and quantitative company or individual performance factors • Reviewed on a periodic basis for competitiveness and individual performance • Targeted within competitive range of peer group
|
• Attract and retain key executives by providing market-competitive fixed compensation | ||
|
Annual Incentive Plan Awards |
• Compensation Committee approves a target incentive pool for each performance period based on selected financial and/or operational metrics • Each executive is granted a target award opportunity based on level of responsibility and market competitiveness • Payouts in a typical year can range from 0% to 200% of target and are determined by achievement of financial goals based on pre-established objectives (at both the Corporate and, where applicable, Segment level), then may be adjusted to reflect individual performance achievement
|
• Pay-for-performance • Align executive and shareholder interests • Motivate the pursuit of specific business goals that drive long-term value creation • SRM reflects ESG metrics related to talent, culture and diversity outcomes, and quality • Attract, retain and motivate key executives with market-competitive compensation opportunities | ||
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2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
Compensation Discussion and Analysis (continued)
| Element | Key Features | Relationship to Strategic Objectives | ||
| • Strategic Results Modifier (“SRM”) provides for an adjustment to individual payout levels based on an assessment of performance against strategic qualitative factors reviewed and approved by the Compensation Committee at the beginning of each year • For information on how the 2020 program was modified from our typical design, see “Executive Summary” above
|
||||
|
Long-Term Incentive Plan Awards |
• Target award granted commensurate with job responsibilities, market competitiveness, experience, and qualitative and quantitative Company and individual performance factors • Grant RSU awards, 75% of which are earned based on Company performance metrics, including relative TSR, and 25% of which are time-based, which means that the value is determined by Aptiv’s share price • For information on how the 2018, 2019 and 2020 programs were modified from our typical design, see “Executive Summary” above
|
• Pay-for-performance • Aligns executive and shareholder interests • Attract, retain and motivate key executives with market-competitive compensation opportunities • Utilizes multi-year vesting period and metrics aligned to long-term shareholder value creation including stock price performance | ||
| Other Compensation | ||||
|
Retirement Programs |
• Qualified defined contribution plan available to all U.S. salaried employees, including NEOs • Non-qualified defined contribution plan available to eligible U.S. employees, including NEOs, who exceed statutory limits under our qualified defined contribution plan • Non-qualified defined benefit plan that was frozen in 2008 • For information on certain changes in effect during 2020 regarding these programs, see “COVID-19 Impacts on Shareholders, Employees, and Executives” above
|
• Attract and retain key executives with market-competitive compensation opportunities | ||
| APTIV PLC | 36 |
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2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
Compensation Discussion and Analysis (continued)
| Adjusted Net Income (In Millions)
|
Cash Flow Before Financing (In Millions)
| |
|
|
| Adjusted EBITDA (In Millions)
|
Growth over Market
| |
|
|
| Total Shareholder Return (2018 through 2020)
|
Return on Net Assets
| |
|
|
| * | The increase in return on net assets in 2020 is attributable to the $1.4 billion gain recognized on the formation of the Motional autonomous driving joint venture. Excluding the gain on the Motional joint venture, return on net assets was 14.0% in 2020, reflecting continued investments for revenue growth and profitability, as well as the impacts of the COVID-19 pandemic on the Company’s industry and operations. |
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Compensation Discussion and Analysis (continued)
| Name | January 1, 2020 Base Salary ($) |
Approved Increase in January 2020 (%) |
Approved Base Salary- Deferred to September 1, 2020 ($) |
Voluntary Salary Effective April 1, |
Actual 2020 Salary Paid ($) |
|||||||||||||
| Kevin P. Clark | $ | 1,428,000 | 2.4 | % | $ | 1,462,272 | 50% | $ | 1,141,924 | |||||||||
| Joseph R. Massaro | 874,000 | 7.0 | 935,000 | 10 | 857,917 | |||||||||||||
| David Paja | 610,738 | 6.4 | 649,666 | 10 | 618,624 | |||||||||||||
| David M. Sherbin | 607,000 | 2.4 | 621,500 | 10 | 586,542 | |||||||||||||
| Mariya K. Trickett | 520,000 | 5.8 | 550,000 | 10 | 508,333 | |||||||||||||
| APTIV PLC | 38 |
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Compensation Discussion and Analysis (continued)
| 39 | APTIV PLC |
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2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
Compensation Discussion and Analysis (continued)
| APTIV PLC | 40 |
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2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
Compensation Discussion and Analysis (continued)
| 41 | APTIV PLC |
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Compensation Discussion and Analysis (continued)
| APTIV PLC | 42 |
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Compensation Discussion and Analysis (continued)
| Metric
|
Weighting (%)
|
Threshold
|
Target
|
Maximum
|
Achievement
| ||||||||||||||||||||
| Average Return on Net Assets (RONA)(1)(2) |
|
50 |
% |
|
27.9 |
% |
|
31.2 |
% |
|
34.5 |
% |
|
30.1 |
% | ||||||||||
| Cumulative NI(2) |
|
25 |
$ |
3,826 |
$ |
4,276 |
$ |
4,726 |
$ |
3,911 |
|||||||||||||||
| Relative Total Shareholder Return (TSR) |
25 | 30th%ile | 50th%ile | 90th%ile | 89th%ile | ||||||||||||||||||||
| (1) | Average RONA is tax-affected adjusted operating income divided by average net working capital plus average net property, plant and equipment for each calendar year, as adjusted for incentive plan calculation purposes. |
| (2) | Achievement reflects actual performance achieved through December 31, 2019 as well as estimated performance for 2020 as of December 31, 2019. |
| Positive Factors | Adverse Factors | |
| Peer-leading 2018-2020 TSR performance of 49.6%, placing Aptiv at the 89th percentile of our TSR peer group
|
Financial performance fell short of original goals for 2018-2020 performance period
| |
| Strong executive team leadership and performance
|
Stakeholder impacts of cost reduction and cash conservation actions
| |
| Stakeholder care during COVID-19 pandemic
|
The impact of furloughs on employees
| |
| Commitment to Diversity, Talent and Culture, and Quality
|
| Performance-based RSUs | ||||||||||
| Name(1) | Target Total Number of Units Granted (#) |
Actual Total Number of Units Earned (#)(1)(2) | ||||||||
| Kevin P. Clark |
82,590 | 78,461 | ||||||||
| Joseph R. Massaro |
20,648 | 19,616 | ||||||||
| David Paja |
12,389 | 11,770 | ||||||||
| David M. Sherbin |
11,976 | 11,378 | ||||||||
| Mariya K. Trickett |
11,257 | 10,694 | ||||||||
| (1) | Includes accrued dividend equivalents. Dividends were suspended in March 2020 and no further dividend equivalents were accrued thereafter. |
| (2) | Absent the adjustments approved by the Compensation Committee, the total number of units earned would have been 49% of the target total number of units granted. |
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Compensation Discussion and Analysis (continued)
STOCK AWARD ACCOUNTING RECONCILIATION
| Original Grant Date Fair Value of 2020 Grant(1) |
Accounting Impact of December Modification to Original 2020 Grant ($130.79/share on 12/30)(2) |
Accounting Impact of December Modification to Original 2019 Grant ($130.79/share on 12/30)(3) |
Total “Stock Awards” Reported in 2020 Summary Compensation Table(4) |
|||||||||||||
| Kevin P. Clark | $ | 10,695,886 | $ | 8,336,380 | $ | 9,470,242 | $ | 28,502,508 | ||||||||
| (1) | Represents the grant date fair value of the February 2020 long-term incentive award that had a target value of $11 million. |
| (2) | Represents the incremental accounting impact on the 2020 long-term incentive award of the adjustments approved by the Compensation Committee in December 2020. |
| (3) | Represents the incremental accounting impact on the 2019 long-term incentive award of the adjustments approved by the Compensation Committee in December 2020. |
| (4) | Represents the total accounting impact of the 2020 grant, the 2020 grant adjustment and the 2019 grant adjustment. No additional awards were granted to Mr. Clark in 2020. |
| APTIV PLC | 44 |
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Compensation Discussion and Analysis (continued)
| 45 | APTIV PLC |
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|
2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
Compensation Discussion and Analysis (continued)
| APTIV PLC | 46 |
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|
2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
Compensation Discussion and Analysis (continued)
We, the undersigned members of the Compensation Committee, have reviewed and discussed the Compensation Discussion and Analysis with management. Based on such review and discussion, we recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2020.
Respectfully submitted,
Rajiv L. Gupta, Chairman
Joseph L. Hooley
Paul M. Meister
Lawrence A. Zimmerman
| 47 | APTIV PLC |
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2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
2020 SUMMARY COMPENSATION TABLE
The table below sets forth specified information regarding the compensation of the individuals who served for 2020 as President and Chief Executive Officer (Kevin P. Clark) and Chief Financial Officer and Senior Vice President, Business Operations (Joseph R. Massaro), and the next three most highly compensated executive officers who were serving as of December 31, 2020 (David Paja, David M. Sherbin and Mariya K. Trickett).
| Name and Principal Position
|
Year
|
Salary ($)(1)(2)
|
Bonus ($)
|
Stock Awards
|
Non-Equity
|
Change
in
|
All
Other
|
Total ($)
|
||||||||||||||||||||||||
| Kevin P. Clark | 2020 | $ | 1,141,924 | $ | — | $ | 28,502,508 | $ | 1,425,715 | $ | — | $ | 197,182 | $ | 31,267,329 | |||||||||||||||||
| President and Chief | 2019 | 1,421,000 | — | 11,504,627 | 1,970,640 | — | 268,266 | 15,164,533 | ||||||||||||||||||||||||
| Executive Officer | 2018 | 1,375,000 | — | 10,643,793 | 1,827,000 | — | 277,310 | 14,123,103 | ||||||||||||||||||||||||
| Joseph R. Massaro | 2020 | 857,917 | — | 9,107,543 | 607,750 | 100,080 | 10,673,290 | |||||||||||||||||||||||||
| Chief Financial Officer and | 2019 | 865,625 | — | 3,287,098 | 917,780 | 116,654 | 5,187,157 | |||||||||||||||||||||||||
| Senior Vice President, | 2018 | 790,500 | — | 3,055,017 | 797,260 | — | 64,334 | 4,707,111 | ||||||||||||||||||||||||
| Business Operations | ||||||||||||||||||||||||||||||||
| David Paja | 2020 | 618,624 | — | 5,294,782 | 303,940 | — | 343,937 | 6,561,283 | ||||||||||||||||||||||||
| Senior Vice President and | 2019 | 594,217 | — | 1,807,948 | 444,351 | — | 289,611 | 3,136,127 | ||||||||||||||||||||||||
| President, Advanced | 2018 | 603,275 | — | 1,596,632 | 488,171 | — | 307,773 | 2,995,851 | ||||||||||||||||||||||||
| Safety and User | ||||||||||||||||||||||||||||||||
| Experience Segment | ||||||||||||||||||||||||||||||||
| David M. Sherbin | 2020 | 586,542 | — | 4,034,723 | 363,578 | 11,562 | 50,987 | 5,047,392 | ||||||||||||||||||||||||
| Senior Vice President, | 2019 | 604,000 | — | 1,643,591 | 502,596 | 7,266 | 87,020 | 2,844,473 | ||||||||||||||||||||||||
| General Counsel, Chief | 2018 | 595,000 | — | 1,740,428 | 465,885 | — | 96,766 | 2,898,079 | ||||||||||||||||||||||||
| Compliance Officer and | ||||||||||||||||||||||||||||||||
| Secretary | ||||||||||||||||||||||||||||||||
| Mariya K. Trickett | 2020 | 508,333 | — | 3,704,902 | 303,875 | — | 189,151 | 4,706,261 | ||||||||||||||||||||||||
| Senior Vice President and | 2019 | 515,000 | — | 1,780,353 | 408,300 | — | 274,933 | 2,978,586 | ||||||||||||||||||||||||
| Chief Human Resources | ||||||||||||||||||||||||||||||||
| Officer | ||||||||||||||||||||||||||||||||
As noted in “2020 Annual Incentive Plan Awards” and “2020 Long-Term Compensation”, the Compensation Committee approved adjustments to the financial performance targets for the 2020 annual cash incentive awards and the performance-based RSU awards granted in 2019 and 2020 in order to mitigate the impacts of the COVID-19 pandemic that were deemed to be outside the control and influence of the management team. The amount shown in the “Stock Awards” column reflects the original grant date fair value, as well as the incremental accounting expense related to the adjustments to the outstanding performance-based RSU awards. See “Supplemental Compensation Information and Reconciliation” for more explanation of the nature and scope of the accounting impacts on our CEO’s compensation.
| (1) | All of our NEOs voluntarily reduced their base salary for the period from April 2020 through August 2020. All NEOs deferred their approved base salary increases until September 1, 2020. See “2020 Annual Compensation Determination, 2020 Base Salaries.” Mr. Paja is a German employee. His salary, bonus and other non-equity compensation items are paid in Euros. U.S. Dollar amounts in this Proxy Statement with respect to Mr. Paja’s non-equity compensation have been converted from Euros at a rate of 1.14 Dollars to one Euro. The exchange rate used was calculated by averaging exchange rates for each calendar month in 2020. |
| (2) | Base salary and annual incentive awards are eligible for deferral under the SRESP. All of the NEOs, other than Mr. Paja, participated in the SRESP in 2020. Total base salaries and annual incentive awards, including the deferred portions, are presented in this 2020 Summary Compensation Table. Contributions to the SRESP are displayed in the “2020 Non-Qualified Deferred Compensation” section. |
| (3) | The award values reflected in the “Stock Awards” column are the grant date fair values of the NEOs’ respective long-term incentive awards determined in accordance with FASB ASC Topic 718. The 2020 grant date for accounting purposes for the annual award was set at February 28, 2020, as approved by the Board of Directors and the Compensation Committee. In addition, the Compensation Committee approved modifications to the 2019 and 2020 performance-based RSU grants on December 30, 2020. The incremental fair values associated with such modifications, as required under FASB ASC 718, are also included in the “Stock Awards” value for 2020. For assumptions used in determining the fair value of |
| APTIV PLC | 48 |
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2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
2020 Summary Compensation Table (continued)
| these awards, see Note 21. Share-Based Compensation to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. The award values include the grant date fair value of 2020 performance-based RSUs based on target performance. Assuming maximum performance achievement under the terms of the original grant and based on grant date share price, for the NEOs’ performance-based RSUs granted in 2020, the values for such awards in the “Stock Awards” column would be $17,425,247 for Mr. Clark; $5,861,218 for Mr. Massaro; $3,485,112 for Mr. Paja; $2,455,388 for Mr. Sherbin; and $2,376,262 for Ms. Trickett. |
| (4) | The “Non-Equity Incentive Plan Compensation” column reflects payments made under our Annual Incentive Plan. |
| (5) | Mr. Sherbin was eligible to receive benefits under the SERP during 2020. No amount in this column represents above-market or preferential earnings on non-qualified deferred compensation. Although the SERP is a frozen program (see “2020 Pension Benefits” section) with fixed measurement parameters, the year-over-year balances change because his age and the interest rates used to estimate the pension liability change each year. |
| (6) | Amounts reported in the “All Other Compensation” column for 2020 reflect the following: |
| Name
|
Aptiv Contributions(a)
|
Life Insurance(b)
|
Expatriate Assignment(c)
|
Other(d)
|
Total
|
|||||||||||||||
| Kevin P. Clark | $ | 179,973 | $ | 2,988 | $ | — | $ | 14,221 | $ | 197,182 | ||||||||||
| Joseph R. Massaro | 85,221 | 913 | — | 13,946 | 100,080 | |||||||||||||||
| David Paja | — | — | 343,937 | — | 343,937 | |||||||||||||||
| David M. Sherbin | 49,076 | 1,911 | — | — | 50,987 | |||||||||||||||
| Mariya K. Trickett | 38,947 | 243 | — | 149,961 | 189,151 | |||||||||||||||
| (a) | For NEOs other than Mr. Paja, this column reflects Aptiv’s contributions to both the qualified SRSP and the non-qualified SRESP. For all participants in the SRSP, Aptiv provides a contribution of 4% of base salary and annual incentive award payment. We also provide a matching contribution equal to 50% of the participant’s contributions to the program, up to a maximum of 7% of the participant’s base salary and annual incentive award. Aptiv contributions to the SRSP and SRESP were suspended as of April 1, 2020 in response to COVID-19. Additional details regarding the SRESP are provided in the “2020 Non-Qualified Deferred Compensation” section. |
| (b) | This column reflects the dollar value of the insurance premiums paid for each NEO for premium payments made regarding his or her life insurance policy. |
| (c) | Mr. Paja receives certain expatriate benefits. The payment represented in this column for Mr. Paja includes: housing of $64,980, healthcare of $23,346, Company-provided automobile of $40,144, education and language of $71,068 and tax equalization payments totaling $144,399 to tax authorities in Germany on Mr. Paja’s behalf, in connection with his expatriate benefits. |
| (d) | For Mr. Clark and Mr. Massaro, these amounts represent tax preparation expenses in connection with working in Ireland; and for Ms. Trickett, this amount represents relocation expenses of $149,961. |
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2020 GRANTS OF PLAN-BASED AWARDS
The table below sets forth the threshold, target and maximum award payout opportunities (or full award opportunity, as applicable) for plan-based awards that were granted to our NEOs in 2020.
|
Estimated Possible Payouts Under |
Estimated Future Payouts Under |
All Other
|
Grant Date
|
|||||||||||||||||||||||||||||||||
| Name
|
Grant Date
|
Threshold
|
Target ($)
|
Maximum ($)
|
Threshold
|
Target
|
Maximum
|
|||||||||||||||||||||||||||||
|
Kevin P. Clark |
$ |
877,363 |
|
$ |
1,096,704 |
|
$ |
1,425,715 |
|
|||||||||||||||||||||||||||
| 2/28/2020 | 31,870 | $ | 2,489,366 | |||||||||||||||||||||||||||||||||
| 2/28/2020 | 66,926 | 95,608 | 191,216 | 8,206,520 | ||||||||||||||||||||||||||||||||
| 12/30/2020 | (4) | 80,821 | 136,147 | 204,220 | 17,806,623 | |||||||||||||||||||||||||||||||
|
Joseph R. Massaro |
|
374,000 |
|
|
467,500 |
|
|
607,750 |
|
|||||||||||||||||||||||||||
| 2/28/2020 | 10,720 | 837,339 | ||||||||||||||||||||||||||||||||||
| 2/28/2020 | 22,511 | 32,159 | 64,318 | 2,760,370 | ||||||||||||||||||||||||||||||||
| 12/30/2020 | (4) | 25,352 | 42,127 | 63,191 | 5,509,834 | |||||||||||||||||||||||||||||||
|
David Paja |
|
220,886 |
|
|
276,108 |
|
|
358,940 |
|
|||||||||||||||||||||||||||
| 2/28/2020 | 6,374 | 497,873 | ||||||||||||||||||||||||||||||||||
| 2/28/2020 | 13,385 | 19,122 | 38,244 | 1,641,338 | ||||||||||||||||||||||||||||||||
| 12/30/2020 | (4) | 14,613 | 24,127 | 36,191 | 3,155,570 | |||||||||||||||||||||||||||||||
|
David M. Sherbin |
|
223,740 |
|
|
279,675 |
|
|
363,578 |
|
|||||||||||||||||||||||||||
| 2/28/2020 | 4,491 | 350,792 | ||||||||||||||||||||||||||||||||||
| 2/28/2020 | 9,430 | 13,472 | 26,944 | 1,156,370 | ||||||||||||||||||||||||||||||||
| 12/30/2020 | (4) | 11,459 | 19,325 | 28,988 | 2,527,560 | |||||||||||||||||||||||||||||||
|
Mariya K. Trickett |
|
187,000 |
|
|
233,750 |
|
|
303,875 |
|
|||||||||||||||||||||||||||
| 2/28/2020 | 4,346 | 339,466 | ||||||||||||||||||||||||||||||||||
| 2/28/2020 | 9,127 | 13,038 | 26,076 | 1,119,118 | ||||||||||||||||||||||||||||||||
|
|
12/30/2020
|
(4)
|
|
10,326
|
|
|
17,175
|
|
|
25,763
|
|
|
2,246,318
|
| ||||||||||||||||||||||
As noted in “2020 Annual Incentive Plan Awards” and “2020 Long-Term Compensation”, the Compensation Committee approved adjustments to the financial performance targets for the 2020 annual cash incentive awards and the performance-based RSU awards granted in 2019 and 2020 in order to mitigate the impacts of the COVID-19 pandemic on the Company’s operating environment that were deemed to be outside the control and influence of the management team. The amount shown in the “Grant Date Fair Value of Stock and Option Awards” column for the awards dated 12/30/2020 reflect the incremental accounting expense related to the adjustments to performance-based RSU awards.
| (1) | These columns show the threshold, target and maximum awards payable to our NEOs under the 2020 Updated Incentive Plan. The final award is determined by Corporate performance, as well as individual performance achievements, as determined by the Compensation Committee. The “target” and “maximum” amounts reflect the reduction to such opportunities in connection with the adjustment of 2020 annual incentive awards in July 2020. |
| (2) | These columns show the threshold, target and maximum number of RSUs possible under the performance-based RSUs granted in 2020 pursuant to our Long-Term Incentive Plan. The actual payouts will be based on three performance metrics (Average Return on Net Assets, Cumulative Net Income and relative TSR) during the performance period from January 1, 2020 through December 31, 2022. The “maximum” amounts shown for the original February 28, 2020 performance grant reflect the original maximum opportunities under these awards. However, in connection with the adjustment of such awards in December 2020, the maximum possible payout for each award was reduced to 150% of target. |
| (3) | This column shows the number of time-based RSUs granted to our NEOs in 2020 pursuant to our Long-Term Incentive Plan excluding dividend equivalents. These time-based RSUs generally vest ratably over three years on the first, second and third anniversary dates of the date of grant. |
| (4) | This award represents a modification to the existing 2019 and 2020 performance-based RSU awards. The total realizable opportunity has not increased for the 2019 or 2020 grants, and the maximum attainable number of shares has been reduced to 150% of the target shares. |
| (5) | This column reflects the original grant date fair value of each 2020 equity award, as well as the incremental fair value associated with the modifications to the 2019 and 2020 performance-based RSU awards approved in December 2020, in each case determined in accordance with FASB ASC Topic 718, For the original grant date fair values of performance-based RSU awards granted in 2020, the amount reflects the target outcome of the performance conditions, excluding the effect of estimated forfeitures. Except for the performance-based RSUs based on relative TSR (33.3%of the annual performance-based RSUs), the original grant date value for the 2020 equity awards was determined based on the grant date closing price of our stock on the New York Stock Exchange. If the grant is issued on a non-trading day, the grant date closing price was deemed to be the closing price of our stock on the last preceding date on which any reported sale occurred. The closing price of Aptiv shares on February 28, 2020 was $78.11. The grant date fair value for the relative TSR performance-based RSUs granted in 2020 was determined using a Monte Carlo simulation and was based on a price of $101.29 per share. The incremental fair value associated with the modification of the 2019 and 2020 performance-based RSU awards was determined as of the December 30, 2020 modification date. The closing price of Aptiv shares on December 30, 2020 was $130.79. |
| APTIV PLC | 50 |
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2020 Grants of Plan-Based Awards (continued)
Our NEOs are parties to offer letters or employment agreements with Aptiv that generally describe the compensation and benefits initially provided to them upon employment. For more information about these arrangements, refer to “Potential Payments Upon Termination or Change in Control”. For more information about the NEOs’ relative mix of salary and other compensation elements in proportion to total compensation, refer to “2020 Compensation Program Overview — 2020 Target Annual Total Direct Compensation Mix”.
| 51 | APTIV PLC |
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|
2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
2020 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The values displayed in the table below reflect each Aptiv NEO’s outstanding long-term incentive awards as of December 31, 2020. The market values are calculated using a share price of $130.29, the December 31, 2020 closing price of our stock. The performance-based RSUs granted in 2019 and 2020, labeled with performance periods 1/1/2019-12/31/2021 and 1/1/2020-12/31/2022, are presented at the maximum level of performance.
| Stock Awards | ||||||||||||||||||
| Name
|
Restricted Stock Unit
|
Number of
|
Market Value of
|
Equity Incentive
|
Equity Incentive
|
|||||||||||||
|
Kevin P. Clark |
2/28/2018 |
|
9,178 |
|
$ |
1,195,802 |
|
|||||||||||
| 2/28/2019 | 21,685 | 2,825,339 | ||||||||||||||||
| 2/28/2020 | 31,870 | 4,152,342 | ||||||||||||||||
| 1/1/2019-12/31/2021 | 146,370 | $ | 19,070,547 | |||||||||||||||
|
1/1/2020-12/31/2022 |
|
143,412 |
|
|
18,685,149 |
| ||||||||||||
|
Joseph R. Massaro |
2/28/2018 |
|
2,295 |
|
|
299,016 |
|
|||||||||||
| 2/28/2019 | 6,197 | 807,407 | ||||||||||||||||
| 2/28/2020 | 10,720 | 1,396,709 | ||||||||||||||||
| 1/1/2019-12/31/2021 | 41,821 | 5,448,858 | ||||||||||||||||
|
1/1/2020-12/31/2022 |
|
48,239 |
|
|
6,285,059 |
| ||||||||||||
|
David Paja |
2/28/2018 |
|
1,378 |
|
|
179,450 |
|
|||||||||||
| 2/28/2019 | 3,409 | 444,159 | ||||||||||||||||
| 2/28/2020 | 6,374 | 830,468 | ||||||||||||||||
| 1/1/2019-12/31/2021 | 23,001 | 2,996,800 | ||||||||||||||||
| 1/1/2020-12/31/2022 | 28,683 | 3,737,108 | ||||||||||||||||
|
David M. Sherbin |
2/28/2018 | 1,331 | 173,416 | |||||||||||||||
| 2/28/2019 | 3,100 | 403,899 | ||||||||||||||||
| 2/28/2020 | 4,491 | 585,132 | ||||||||||||||||
| 1/1/2019-12/31/2021 | 20,911 | 2,724,494 | ||||||||||||||||
|
1/1/2020-12/31/2022 |
|
20,208 |
|
|
2,632,900 |
| ||||||||||||
|
Mariya K. Trickett |
10/15/2018 | 3,169 | 412,889 | |||||||||||||||
| 2/28/2019(6) | 5,261 | 685,456 | ||||||||||||||||
| 2/28/2019 | 2,542 | 331,197 | ||||||||||||||||
| 2/28/2020 | 4,346 | 566,240 | ||||||||||||||||
| 1/1/2019-12/31/2021 | 17,148 | 2,234,213 | ||||||||||||||||
| 1/1/2020-12/31/2022 | 19,557 | 2,548,082 | ||||||||||||||||
As noted in “2020 Long-Term Compensation”, the Compensation Committee approved adjustments to the financial performance targets for the performance-based RSU awards granted in 2019 and 2020 in order to mitigate the impacts of the COVID-19 pandemic that were deemed to be outside the control and influence of the management team.
| (1) | To better understand the information in this table we included the time-based RSU award grant dates and the performance periods of our performance-based RSU awards. All unit amounts include dividend equivalents. |
| (2) | This column shows the unvested time-based RSU awards as of December 31, 2020, which generally vest ratably on each of the first, second and third anniversaries of the grant date. |
| (3) | The amount shown represents the market value of awards using a per share price of $130.29, the closing price of our stock on December 31, 2020. |
| (4) | Performance-based RSUs presented at maximum performance levels. Pursuant to adjustments approved by the Compensation Committee for the 2019-2021 and 2020-2022 performance period, maximum performance is capped at 150% of target. |
| (5) | Of the awards reflected in this column, the 2019-2021 performance-based RSUs will be settled in early 2022 after the results for the three-year performance period are determined and the 2020-2022 performance-based RSUs will be settled in early 2023 after the results for the three-year performance period are determined. |
| (6) | These RSUs vest in full on the second anniversary of the date of grant. |
| APTIV PLC | 52 |
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2020 OPTION EXERCISES AND STOCK VESTED TABLE
The following table sets forth information regarding vested stock awards during 2020 for our NEOs. The value realized on vesting is based on the market price of the underlying shares on the date of vest.
| Stock Awards | ||||||||
| Name | Number of Shares Acquired on Vesting (#)(1) |
Value Realized on Vesting ($)(1) |
||||||
|
Kevin P. Clark
|
|
111,097
|
|
$
|
12,771,882
|
| ||
|
Joseph R. Massaro
|
|
27,533
|
|
|
3,174,166
|
| ||
|
David Paja
|
|
26,875
|
|
|
2,713,365
|
| ||
|
David M. Sherbin
|
|
16,118
|
|
|
1,852,681
|
| ||
|
Mariya K. Trickett
|
|
15,130
|
|
|
1,739,817
|
| ||
| (1) | The shares and values listed in these columns include time-based RSUs that vested on February 28, 2020 and performance-based RSUs that were earned as of December 31, 2020, and settled on February 28, 2021. |
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2020 NON-QUALIFIED DEFERRED COMPENSATION
2020 Non-Qualified Deferred Compensation Table
| Name | Executive Contributions in Last FY ($)(1) |
Registrant Contributions in Last FY ($)(2) |
Aggregate Earnings in Last FY ($)(3) |
Aggregate Withdrawals / |
Aggregate Balance at Last FYE ($) |
|||||||||||||||
| Kevin P. Clark | $202,969 | $158,598 | $ | 370,527 | $724,316 | $ | 2,613,767 | |||||||||||||
| Joseph R. Massaro | 104,349 | 63,846 | 105,192 | 115,560 | 509,657 | |||||||||||||||
| David Paja | — | — | — | — | — | |||||||||||||||
| David M. Sherbin | 68,932 | 27,701 | 27,115 | 150,081 | 100,261 | |||||||||||||||
| Mariya K. Trickett | 44,214 | 18,998 | 8,141 | — | 145,523 | |||||||||||||||
| (1) | All of our NEOs, except Mr. Paja who is not an eligible SRESP participant, elected to defer a portion of their salary and annual incentive awards as permitted under the SRESP. Each NEO’s total salary and annual incentive award, including these deferred amounts, is reported in the “2020 Summary Compensation Table”. |
| (2) | Our contributions to the NEOs’ SRESP accounts, along with contributions to the qualified SRSP, are disclosed in the “All Other Compensation” column in the “2020 Summary Compensation Table”. |
| (3) | Aggregate earnings represent change (including losses) in market value less any fee paid by the NEO, but none of these amounts are disclosed in the “2020 Summary Compensation Table”. |
| (4) | The withdrawals of our NEOs were made in accordance with the deferral election process described in this section. |
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2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
Potential Payments Upon Termination or Change in Control (continued)
| 57 | APTIV PLC |
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Potential Payments Upon Termination or Change in Control (continued)
Potential Payments upon Termination or Change in Control Table
| Termination Scenario | ||||||||||||||||||||||
| Name | Component | Voluntary Resignation / Retirement (If Eligible)(5)(6) |
Involuntary (Not For Cause) or For Good Reason |
Involuntary (For Cause) |
Change in and Termination |
Death/Disability | ||||||||||||||||
|
Kevin P. Clark |
Cash Severance(1) |
$ |
— |
|
$ |
5,483,520 |
|
$ |
— |
|
$ |
10,967,040 |
|
$ |
— |
| ||||||
| Annual Incentive Plan(2) | 1,425,715 | 1,425,715 | — | 1,425,715 | 1,425,715 | |||||||||||||||||
| Long-Term Incentives — Time-Based Restricted Stock Units(3)(4) | — | 2,173,889 | — | 8,173,483 | 2,173,889 | |||||||||||||||||
| Long-Term Incentives — Performance- Based Restricted Stock Units(3)(4) | 18,987,162 | 18,987,162 | — | 35,931,116 | 18,987,162 | |||||||||||||||||
| Benefits Continuation | — | 22,940 | — | 57,687 | — | |||||||||||||||||
| Total
|
|
20,412,877
|
|
|
28,093,226
|
|
|
—
|
|
|
56,555,041
|
|
|
22,586,766
|
| |||||||
|
Joseph R. Massaro |
Cash Severance(1) |
|
— |
|
|
2,805,000 |
|
|
— |
|
|
3,740,000 |
|
|
— |
| ||||||
| Annual Incentive Plan(2) | 607,750 | 607,750 | — | 607,750 | 607,750 | |||||||||||||||||
| Long-Term Incentives — Time-Based Restricted Stock Units(3)(4) | — | 585,784 | — | 2,503,131 | 585,784 | |||||||||||||||||
| Long-Term Incentives — Performance- Based Restricted Stock Units(3)(4) | 2,690,228 | 5,040,790 | — | 10,512,840 | 5,040,790 | |||||||||||||||||
| Benefits Continuation | — | 13,146 | — | 22,424 | — | |||||||||||||||||
| Total
|
|
3,297,978
|
|
|
9,052,470
|
|
|
—
|
|
|
17,386,145
|
|
|
6,234,324
|
| |||||||
|
David Paja |
Cash Severance(1) |
|
— |
|
|
974,498 |
|
|
— |
|
|
2,403,762 |
|
|
— |
| ||||||
| Annual Incentive Plan(2) |
303,940 | 303,940 | — | 303,940 | 303,940 | |||||||||||||||||
| Long-Term Incentives — Time-Based Restricted Stock Units(3)(4) | — | 334,845 | — | 1,454,167 | 334,845 | |||||||||||||||||
| Long-Term Incentives — Performance- Based Restricted Stock Units(3)(4) | 1,614,163 | 2,906,900 | — | 6,103,435 | 2,906,900 | |||||||||||||||||
| Benefits Continuation |
— | — | — | — | — | |||||||||||||||||
| Total
|
|
1,918,103
|
|
|
4,520,183
|
|
|
—
|
|
|
10,265,304
|
|
|
3,545,685
|
| |||||||
|
David M. Sherbin |
Cash Severance(1) |
|
— |
|
|
1,771,275 |
|
|
— |
|
|
2,361,700 |
|
|
— |
| ||||||
| Annual Incentive Plan(2) |
363,578 | 363,578 | — | 363,578 | 363,578 | |||||||||||||||||
| Long-Term Incentives — Time-Based Restricted Stock Units(3)(4) | — | 312,957 | — | 1,162,447 | 312,957 | |||||||||||||||||
| Long-Term Incentives — Performance- Based Restricted Stock Units(3)(4) | 2,735,829 | 2,735,829 | — | 5,132,123 | 2,735,829 | |||||||||||||||||
| Benefits Continuation | — | 22,940 | — | 38,458 | — | |||||||||||||||||
| Total
|
|
3,099,407
|
|
|
5,206,579
|
|
|
—
|
|
|
9,058,306
|
|
|
3,412,364
|
| |||||||
|
Mariya K. Trickett |
Cash Severance(1) |
|
— |
|
|
825,000 |
|
|
— |
|
|
2,035,000 |
|
|
— |
| ||||||
| Annual Incentive Plan(2) | 303,875 | 303,875 | — | 303,875 | 303,875 | |||||||||||||||||
| Long-Term Incentives — Time-Based Restricted Stock Units(3)(4) | — | 1,143,034 | — | 1,995,782 | 1,143,034 | |||||||||||||||||
| Long-Term Incentives — Performance- Based Restricted Stock Units(3)(4) | 1,466,675 | 2,430,560 | — | 4,654,871 | 2,430,560 | |||||||||||||||||
| Benefits Continuation | — | 6,739 | — | 11,506 | — | |||||||||||||||||
| Total
|
|
1,770,550
|
|
|
4,709,208
|
|
|
—
|
|
|
9,001,034
|
|
|
3,877,469
|
| |||||||
| (1) | In the case of an involuntary not for cause termination or a termination for good reason, Messrs. Clark, Massaro, and Sherbin are eligible to receive severance payments equal to 18 months of base salary, plus 1.5 times the value of the annual incentive plan target award, payable in installments. Mr. Paja and Ms. Trickett are eligible for a severance payment equal to 1.5 times base salary, payable in installments. In the case of a qualifying Change in Control termination, Mr. Clark is eligible to receive a severance payment equal 3 times base salary, plus 3 times the value of the annual incentive plan target award. In the case of a qualifying Change in Control termination, Messrs. Massaro, Paja and Sherbin and Ms. Trickett are eligible to receive a severance payment equal 2 times base salary, plus 2 times the value of the annual incentive plan target award. |
| (2) | In all scenarios except a voluntary termination or an involuntary termination for cause, the NEO would receive a prorated annual incentive award. If the NEO voluntarily terminates employment, he or she must have worked on the last business day of the year in order to receive his or her annual incentive award; if not, the award is forfeited in its entirety. For each NEO, annual incentive award payments are subject to performance assessment and will be paid after the conclusion of the performance period. |
| (3) | The value shown is based on the market value of the award using a per-share price of $130.29, the closing price of our stock on December 31, 2020. |
| (4) | In the event of a qualifying termination within two years after a change in control the NEOs’ awards will vest as described under “Potential Payments Upon Termination or Change in Control — Long-Term Incentive Plan”. Also as described under “Potential Payments Upon Termination or Change in Control — Long-Term Incentive Plan”, if at the time of a change in control the NEOs do not receive replacement awards, their awards will vest upon the change in control regardless of whether their employment is terminated. The performance-based RSUs included represent a 100% payout of each award. |
| (5) | In the event of a voluntary termination on December 31, 2020, each NEO would receive the value of their 2018 performance-based RSUs. |
| (6) | As of December 31, 2020, Mr. Clark and Mr. Sherbin are the only NEOs eligible to retire. |
| APTIV PLC | 58 |
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2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
Potential Payments Upon Termination or Change in Control (continued)
| 59 | APTIV PLC |
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|
2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Set forth in the table below is information about the number of ordinary shares held by persons (including any “group” as that term is used in Section 13(d)(3) of the Exchange Act), we know to be the beneficial owners of more than five percent (5%) of Aptiv ordinary shares (based on 270,025,374 ordinary shares outstanding at December 31, 2020), based on information furnished by the identified persons to the SEC.
The definition of beneficial ownership for proxy statement purposes includes shares over which a person has sole or shared voting power or dispositive power, whether or not a person has any economic interest in the shares. The definition also includes shares that a person has a right to acquire currently or within 60 days of March 2, 2021.
| Name and Address of Beneficial Owner | Number of Shares Beneficially Owned |
Percent of Class | ||
| The Vanguard Group, Inc.(1) 100 Vanguard Blvd. Malvern, PA 19355 |
28,084,954 | 10.40% | ||
| BlackRock, Inc.(2) 55 East 52nd Street New York, NY 10055 |
22,695,310 | 8.4% | ||
| T. Rowe Price Associates, Inc.(3) 100 E. Pratt Street Baltimore, MD 21202 |
22,254,163 | 8.2% |
| (1) | Represents ordinary shares beneficially owned by The Vanguard Group, Inc. This information is based on a Schedule 13G/A filed with the SEC February 10, 2021. |
| (2) | Represents ordinary shares beneficially owned by BlackRock, Inc. and/or certain other non-reporting entities. This information is based on a Schedule 13G/A filed with the SEC on February 5, 2021. |
| (3) | Represents ordinary shares beneficially owned by T. Rowe Price Associates, Inc. This information is based on a Schedule 13G/A filed with the SEC on February 16, 2021. |
| 63 | APTIV PLC |
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2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of March 2, 2021 concerning beneficial ownership of Aptiv ordinary shares by each director, nominee and each of the executive officers named in the Summary Compensation Table. The definition of beneficial ownership for proxy statement purposes includes shares over which a person has sole or shared voting power or dispositive power, whether or not a person has any economic interest in the shares. The definition also includes shares that a person has the right to acquire currently or within 60 days of March 2, 2021. Except as otherwise indicated and subject to applicable community property laws, each owner has sole voting and dispositive power with respect to the securities listed.
| Name of Beneficial Owner | Number of Shares Owned |
Number of RSUs that Vest within 60 Days |
Total | Percent of Class |
||||||||||||
| Directors |
||||||||||||||||
| Richard L. Clemmer |
|
— |
|
|
2,929 |
|
|
2,929 |
|
|
* |
| ||||
| Nancy E. Cooper |
|
3,474 |
|
|
4,776 |
|
|
8,250 |
|
|
* |
| ||||
| Nicholas M. Donofrio |
|
122,627 |
|
|
4,611 |
|
|
127,238 |
|
|
* |
| ||||
| Rajiv L. Gupta |
|
36,300 |
|
|
8,563 |
|
|
44,863 |
|
|
* |
| ||||
| Joseph L. Hooley |
|
402 |
|
|
4,364 |
|
|
4,766 |
|
|
* |
| ||||
| Merit E. Janow |
|
— |
|
|
— |
|
|
— |
|
|
* |
| ||||
| Sean O. Mahoney |
|
12,266 |
|
|
4,364 |
|
|
16,630 |
|
|
* |
| ||||
| Paul M. Meister |
|
2,214 |
|
|
4,364 |
|
|
6,578 |
|
|
* |
| ||||
| Robert K. Ortberg |
|
2,691 |
|
|
4,364 |
|
|
7,055 |
|
|
* |
| ||||
| Colin J. Parris |
|
4,074 |
|
|
4,364 |
|
|
8,438 |
|
|
* |
| ||||
| Ana G. Pinczuk |
|
7,474 |
|
|
4,364 |
|
|
11,838 |
|
|
* |
| ||||
| Lawrence A. Zimmerman |
|
19,600 |
|
|
4,611 |
|
|
24,211 |
|
|
* |
| ||||
| Officers |
||||||||||||||||
| Kevin P. Clark |
|
730,706 |
|
|
— |
|
|
730,706 |
|
|
* |
| ||||
| Joseph R. Massaro |
|
67,586 |
|
|
— |
|
|
67,586 |
|
|
* |
| ||||
| David Paja |
|
37,781 |
|
|
— |
|
|
37,781 |
|
|
* |
| ||||
| David M. Sherbin |
|
48,732 |
|
|
— |
|
|
48,732 |
|
|
* |
| ||||
| Mariya K. Trickett |
|
16,805 |
|
|
— |
|
|
16,805 |
|
|
* |
| ||||
| Directors and Officers as a Group (20 Persons) |
|
1,160,991 |
|
|
51,674 |
|
|
1,212,665 |
|
|||||||
| * | Less than 1%. |
| APTIV PLC | 64 |
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2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The Board has adopted a written Related Party Transaction Policy. Pursuant to this policy, the Company’s executive officers, directors and nominees for director must promptly disclose any actual or potential material conflict of interest to our General Counsel, who will then assess and communicate the information to the Nominating and Governance Committee for evaluation and appropriate resolution. The Nominating and Governance Committee will generally not approve or ratify a related party transaction unless it has determined that, upon consideration of all relevant information, the related party transaction is in, or not inconsistent with, the best interests of the Company and its shareholders. If we become aware of an existing related party transaction that has not been pre-approved under our Related Party Transaction Policy, the transaction will be referred to the Nominating and Governance Committee, which will evaluate all options available, including ratification, revision or termination of such transaction.
No related party transactions were identified during 2020.
| 65 | APTIV PLC |
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2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
Other Information (continued)
| 67 | APTIV PLC |
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2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
Other Information (continued)
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be Held on April 30, 2021
The SEC has adopted rules to allow proxy materials to be posted on the Internet and to provide only a Notice of Internet Availability of Proxy Materials to shareholders. Our Proxy Materials and Annual Report are available at www.proxyvote.com
| APTIV PLC | 68 |
Table of Contents
|
2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
Adjusted Net Income and Adjusted Net Income per Share
| Year Ended December 31, | ||||||||||||
| (in millions, except per share amounts) | 2020 | 2019 | 2018 | |||||||||
|
Net income attributable to ordinary shareholders |
$ | 1,769 | $ | 990 | $ | 1,067 | ||||||
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Mandatory Convertible Preferred Share dividends |
35 | — | — | |||||||||
|
Net income attributable to Aptiv |
1,804 | 990 | 1,067 | |||||||||
|
Adjusting items: |
||||||||||||
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Restructuring |
136 | 148 | 109 | |||||||||
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Other acquisition and portfolio project costs |
23 | 71 | 78 | |||||||||
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Asset impairments |
10 | 11 | 34 | |||||||||
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Deferred compensation related to acquisitions |
14 | 42 | 57 | |||||||||
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Gain on business divestitures and other transactions |
(1,434 | ) | — | — | ||||||||
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Debt modification costs |
4 | — | — | |||||||||
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Debt extinguishment costs |
— | 6 | — | |||||||||
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Transaction and related costs associated with acquisitions |
— | 5 | 14 | |||||||||
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Gain on changes in fair value of equity investments |
(10 | ) | (19 | ) | — | |||||||
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Contingent consideration liability fair value adjustments |
— | — | 23 | |||||||||
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Tax impact of U.S. tax reform enactment |
— | — | 29 | |||||||||
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Tax impact of adjusting items(a) |
(22 | ) | (18 | ) | (15) | |||||||
|
Adjusted net income attributable to Aptiv |
$ | 525 | $ | 1,236 | $ | 1,396 | ||||||
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Weighted average number of diluted shares outstanding |
270.70 | 257.39 | 265.22 | |||||||||
|
Diluted net income per share attributable to Aptiv |
$ | 6.66 | $ | 3.85 | $ | 4.02 | ||||||
|
Adjusted net income per share |
$ | 1.94 | $ | 4.80 | $ | 5.26 | ||||||
| (a) | Represents the income tax impacts of the adjustments made for restructuring and other special items by calculating the income tax impact of these items using the appropriate tax rate for the jurisdiction where the charges were incurred and the impact of the intra-entity transfer of intellectual property of approximately $33 million during the year ended December 31, 2018. |
APTIV PLC A-1
Table of Contents
|
2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT |
Appendix A (continued)
Cash Flow Before Financing
| Year Ended December 31, | ||||||||||||
| (in millions) | 2020 | 2019 | 2018 | |||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income |
$ | 1,822 | $ | 1,009 | $ | 1,107 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Depreciation and amortization |
764 | 717 | 676 | |||||||||
| Restructuring expense, net of cash paid |
(15 | ) | 29 | (26) | ||||||||
| Working capital |
(65 | ) | 67 | (3) | ||||||||
| Pension contributions |
(33 | ) | (38 | ) | (48) | |||||||
| Gain on autonomous driving joint venture |
(1,434 | ) | — | — | ||||||||
| Other, net |
374 | (160 | ) | (66) | ||||||||
|
Net cash provided by operating activities |
1,413 | 1,624 | 1,640 | |||||||||
| Cash flows from investing activities: | ||||||||||||
| Capital expenditures |
(584 | ) | (781 | ) | (846) | |||||||
| Cost of business acquisitions and other transactions, net of cash acquired |
(49 | ) | (334 | ) | (1,197) | |||||||
| Cost of technology investments |
(2 | ) | (10 | ) | (16) | |||||||
| Settlement of derivatives |
(1 | ) | — | (2) | ||||||||
| Other, net |
10 | 14 | 13 | |||||||||
|
Net cash used in investing activities |
(626 | ) | (1,111 | ) | (2,048) | |||||||
|
Adjusting items: |
||||||||||||
| Adjustment for the cost of business acquisitions and other transactions, net of cash acquired | 49 | 334 | 1,197 | |||||||||
| Adjustment for settlement of derivatives related to business acquisitions | — | — | (4) | |||||||||
| Cash flow before financing |
$ | 836 | $ | 847 | $ | 785 | ||||||
Adjusted EBITDA
| Year Ended December 31, | ||||||||||||
| (in millions) | 2020 | 2019 | 2018 | |||||||||
| Net income attributable to Aptiv | $ | 1,804 | $ | 990 | $ | 1,067 | ||||||
| Interest expense |
164 | 164 | 141 | |||||||||
| Other income, net |
— | (14 | ) | (2) | ||||||||
| Income tax expense |
49 | 132 | 250 | |||||||||
| Equity loss (income), net of tax |
83 | (15 | ) | (23) | ||||||||
|
Net income attributable to noncontrolling interest |
|
18 |
|
|
19 |
|
|
40 |
| |||
| Operating income | 2,118 | 1,276 | 1,473 | |||||||||
|
Depreciation and amortization |
|
764 |
|
|
717 |
|
|
676 |
| |||
|
EBITDA |
$ |
2,882 |
|
$ |
1,993 |
|
$ |
2,149 |
| |||
| Restructuring |
136 | 148 | 109 | |||||||||
| Other acquisition and portfolio project costs |
23 | 71 | 78 | |||||||||
| Deferred compensation related to acquisitions |
14 | 42 | 57 | |||||||||
|
Gain on business divestitures and other transactions |
|
(1,434 |
) |
|
— |
|
|
— |
| |||
|
Adjusted EBITDA |
$ |
1,621 |
|
$ |
2,254 |
|
$ |
2,393 |
| |||
A-2 APTIV PLC
Table of Contents
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APTIV PLC 5 HANOVER QUAY, GRAND CANAL DOCK DUBLIN 2, IRELAND D02 VY79 |
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com | |
|
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. | ||
| During The Meeting - Go to www.virtualshareholdermeeting.com/APTV2021
| ||
| You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. | ||
| VOTE BY PHONE - 1-800-690-6903 | ||
| Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. | ||
| VOTE BY MAIL | ||
| Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. | ||
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | ||||
| D32798-P49190 KEEP THIS PORTION FOR YOUR RECORDS | ||||
| — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — | ||||
| DETACH AND RETURN THIS PORTION ONLY | ||||
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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APTIV PLC |
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The Board recommends a vote FOR all director nominees, and FOR Proposals 2 and 3. |
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1. |
Election of Directors: |
For | Against | Abstain | ||||||||||||||||||||||||||||||||
| 1a. | Kevin P. Clark |
☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||
| 1b. | Richard L. Clemmer |
☐ | ☐ | ☐ | For | Against | Abstain | |||||||||||||||||||||||||||||
| 1c.
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Nancy E. Cooper
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☐
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☐
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☐
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1k. Colin J. Parris |
☐ | ☐ | ☐ | ||||||||||||||||||||||||||||
| 1d. | Nicholas M. Donofrio |
☐ | ☐ | ☐ | 1l. Ana G. Pinczuk |
☐ | ☐ | ☐ | ||||||||||||||||||||||||||||
| 1e. | Rajiv L. Gupta |
☐ | ☐ | ☐ |
For |
Against |
Abstain | |||||||||||||||||||||||||||||
| 1f.
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Joseph L. Hooley
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☐
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☐
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☐
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2. Proposal to re-appoint auditors, ratify independent public accounting firm and authorize the directors to determine the fees paid to the auditors. |
☐ |
☐ |
☐ | ||||||||||||||||||||||||||||
| 1g.
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Merit E. Janow
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☐
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☐
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☐
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3. Say-on-Pay - To approve, by advisory vote, executive compensation. |
☐ | ☐ | ☐ | ||||||||||||||||||||||||||||
| 1h.
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Sean O. Mahoney
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☐
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☐
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☐
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NOTE: Such other business as may properly come before the meeting or any adjournment thereof. |
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| 1i.
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Paul M. Meister
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☐
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☐
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☐
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| 1j.
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Robert K. Ortberg
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☐
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☐
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☐
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
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| Signature [PLEASE SIGN WITHIN BOX]
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Date |
Signature (Joint Owners) |
Date |
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Table of Contents
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Proxy Materials are available at www.proxyvote.com.
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D32799-P49190
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APTIV PLC |
||||||
| Annual Meeting of Shareholders | ||||||
| April 30, 2021 8:00 AM Eastern Time | ||||||
| This proxy is solicited by the Board of Directors | ||||||
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Joseph R. Massaro, with the power of substitution, is hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Aptiv PLC to be held on April 30, 2021 or at any postponement or adjournment thereof.
Shares represented by this proxy will be voted as directed by the shareholder. If no such directions are indicated, the Proxies will have authority to vote FOR all nominees, and FOR Proposals 2 and 3. |
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(Items to be voted appear on reverse side.) |
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Continued and to be signed on reverse side
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