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APOLLO EDUCATION GROUP INC filed this Form DEF 14C on 12/27/2013
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Long Term Incentives
The target grant date award value of the annual long term equity incentive grants for each named executive officer made in July 2012 for the 2013 fiscal year were as follows and were generally the same as the grants made for the 2012 fiscal year. Mr. Cappelli did not receive an annual long term incentive award for the 2013 fiscal year because he previously received multi-year restricted stock unit (“RSU”), performance share unit (“PSU”) and stock option grants in April 2011, July 2011, October 2011, and March 2012 for the term of his employment agreement that runs through August 31, 2014. The amounts shown in the below table for Mr. Cappelli are the target grant date values of the portion of his multi-year grants that are allocable to fiscal year 2013.
2013 Fiscal Year Grant-Date Target Award Value*
(excluding retention awards)
Stock Options
Apollo Education Group PSUs
Apollo Global
Dr. Sperling
Mr. Cappelli
Mr. D’Amico
Mr. Swartz
Mr. Martin
Ms. Bishop
Mr. Sperling
These amounts are not a substitute for the amounts disclosed in the “Summary Compensation Information” table, which amounts are disclosed in accordance with SEC rules. These amounts are the grant date target award values for the awards made in July 2012 for our 2013 fiscal year and the pro-rata awards approved in January 2013 (with an effective date of May 1, 2013) for Mr. Sperling and Ms. Bishop in connection with their appointments to Chairman and Vice Chairman of the Board.
Realizable Compensation
We generally target cash compensation at the 50th percentile of our Comparator Group (discussed in Section IV.A. below) and total direct compensation at the 75th percentile of our Comparator Group; however, the actual percentile levels may vary from those targeted percentile based on individual circumstances, such as the officer’s level of experience and the long-term incentives that may be needed to retain his or her services. Our total direct target annual compensation for the named executive officers for the 2013 fiscal year ranged between the 50th and 75th percentile of our Comparator Group (excluding the retention awards discussed below). Total direct target annual compensation includes annual base salary, target values for annual incentives and the long term incentive values shown above.
In order to assess the effectiveness of our pay-for-performance compensation structure, with the assistance of the Committee’s independent consultant, we compared the named executive officers’ “Realizable Compensation” over a three-year period ending with the 2013 fiscal year with the executive’s total direct target compensation over that period.
“Realizable Compensation” includes the following compensation items for the three-year period: (i) actual base salary, (ii) actual annual incentive payouts, (iii) the intrinsic or “in-the-money” value of stock options, (iv) the fair value of vested and unvested RSUs, and (v) the anticipated value of vested and unvested PSUs as of the end of the 2013 fiscal year. All equity award values were based on the fair market value of a share of our Class A Common Stock as of the end of our 2013 fiscal year, which value was $18.57. At December 13, 2013, the closing price for our Class A Common Stock was $25.19.
Due to the significant drop in our stock price over this three-year period along with our failure to attain the target financial performance measures established for performance share unit awards, Realizable Compensation for each named executive officer is significantly less than his or her targeted compensation and is generally the lowest relative to the market Comparator Group companies, which has contributed to the retention challenges discussed below.