|APOLLO EDUCATION GROUP INC filed this Form DEF 14C on 12/29/2014|
The 2014 Comparators was comprised of the following companies:
(1) Washington Post changed its name to Graham Holdings Company following the sale of its newspaper operations.
(2) Lender Processing Services, Inc. was acquired by Fidelity National Financial in January 2014.
In addition to our 2014 Comparators, with the assistance of Pearl Meyer, the Compensation Committee has also developed an Education Industry Peer Group (“Education Peer Group”) of publicly-held for-profit educational institutions. Companies included in the Education Peer Group are generally significantly smaller than the Company in terms of revenue and market capitalization and, therefore, we do not generally use the Education Peer Group for establishing executive compensation levels. Those companies in the Education Peer Group that meet the size criteria - DeVry Education Group, Inc. and Graham Holdings Company - are included in the 2014 Comparators. The Compensation Committee reviews market data for the Education Peer Group in order to track executive program design, performance, and realizable compensation relative to target pay in the education industry to assure that the Company’s compensation remains highly competitive in the industry. This Education Peer Group is comprised of the following companies:
In March 2014, with the assistance of Pearl Meyer, the Compensation Committee reviewed and revised the approach used to select companies for inclusion as comparators used to assess 2014 target compensation and realizable compensation as well as benchmark fiscal year 2015 compensation (“2015 Comparators”). Pearl Meyer recommended that the 2014 Comparators be revised for benchmarking pay levels going forward to align the Company closer over time to the median of the 2015 Comparators in terms of our key metrics of revenue, market capitalization, return on equity, return on invested capital and free cash flow. Pearl Meyer advised that new comparators meet the following financial criteria: (i) market capitalization in the range of $2 billion to $8 billion, (ii) annual revenue in the range of $2 billion to $8 billion, and (ii) meeting at least one of the following criteria: (a) an average return on equity for the past five years greater than 19%, (b) an average return on invested capital for the past five years greater than 10% or (c) average free cash flow over the past five years in the range of $150 million to $800 million. Pearl Meyer also recommended that the types of industries from which the 2015 Comparators are drawn be expanded to include other industries that emphasize longer-term customer relationships, such as insurance and telecommunications services.
In applying these criteria, the 2015 Comparators include the following companies:
Following the appointment of Mr. Sperling as Chairman, Pearl Meyer recommended that we supplement the market data in making compensation decisions for Mr. Sperling, due to Mr. Sperling’s unique role and position with the Company as an employee, Chair of the Board of Directors, and significant shareholder (both as direct and beneficial owner of 48.8% of our Class B Voting Stock, and as one of three trustees controlling the remaining Class B Voting Stock). Pearl Meyer recommended that this supplemental comparator group for Mr. Sperling be established based on the following criteria: (i) controlled companies as defined by NASDAQ/NYSE, companies with multi-class capital structures with unequal rights or significant