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APOLLO EDUCATION GROUP INC filed this Form DEF 14C on 12/29/2014
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On a cumulative basis, a covered individual must retain at least 50% of the net shares (after-tax) acquired upon the vesting of restricted stock units until ownership guidelines have been met. A covered individual must acquire (and thereafter maintain) the required stock ownership within five years of becoming an individual covered by the guidelines. As of the end of fiscal year 2014, each of our executive officers met the applicable equity retention guideline.
Our guidelines also prohibit covered individuals from purchasing or selling any publicly traded options for our securities, including the trading of any call or put, the writing of any call or put, hedging or the use of collars.
We do not have any policies prohibiting executives from holding our securities in margin accounts, pledging our securities as collateral for loans or entering into pre-paid variable forward sale contracts covering our securities. However, executive officers are not permitted to engage in short sales of our securities.
Annual Compensation Review and Adjustments for Named Executive Officers
The three major elements of the Company’s executive officer total direct compensation are: (i) base salary, (ii) annual variable cash bonus plan, and (iii) long-term, equity based incentive awards. For fiscal year 2014, approximately 76% of target total direct compensation for the named executive officers other than the CEO was performance-based. Approximately 90% of target total direct compensation for the CEO was performance based. These percentages of performance-based compensation reflect our core compensation philosophy to pay-for-performance.
Base Salary
For fiscal year 2014, the Compensation Committee took the following actions with respect to the base salaries of our named executive officers:
The base salary of Mr. Cappelli for fiscal year 2014 in the amount of $800,000 was established by the terms of his April 2011 employment agreement.
Mr. Swartz’s base salary was increased from $450,000 to $515,000 and Mr. Martin’s base salary was increased from $450,000 to $540,000, which kept their base salaries in line with comparable executives at 2014 Comparators and consensus market data.
Mr. Bowling was hired as Chief Operating Officer during fiscal year 2014 and his initial annual base salary was set at $540,000, which is in line with COOs at 2014 Comparators and consensus market data.
Mr. Sperling’s annual base salary remained unchanged from fiscal year 2013.
Mr. Uehlein’s base salary was increased from $350,000 to $385,000 in January 2014 in line with consensus market data. Mr. Uehlein’s base salary, including the mid-year increase, was based only on his role as President, Apollo Global. Additional cash compensation (in the form of cash bonuses described below in the “Cash Bonuses” subsection) was provided to Mr. Uehlein to compensate him for the Acting Chief Operating Officer role in which he functioned from April 2013 through early December 2013, in addition to the role as President, Apollo Global. Due the temporary nature of Mr. Uehlein’s Acting COO role, we determined that it was more appropriate to supplement Mr. Uehlein’s cash compensation with bonuses related to the period he was acting in that role, rather than making base salary adjustments.
Annual Variable Cash Bonus Plan
The potential cash incentives under the Executive Officer Performance Incentive Plan (the “2014 Bonus Plan”) for fiscal year 2014 were tied to the Company’s attainment of certain established financial performance targets as follows:
The financial metrics were tied to operating income for fiscal year 2014 (weighted at 60% of the total bonus potential) and net revenue for such year (weighted at 40%). The Compensation Committee reserved discretion to reduce the actual bonus payouts by up to 30%, but determined that no such negative discretion needed to be exercised with regard to the bonus payouts under the 2014 Bonus Plan. The accounting principles in effect under U.S. GAAP at the start of fiscal year 2014 were applied in the calculation of the attained level of each of the performance goals, whether or not there should occur any changes to those accounting principles during the course of fiscal year 2014.