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SEC Filings

DEF 14C
APOLLO EDUCATION GROUP INC filed this Form DEF 14C on 12/27/2013
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Dr. Sperling’s Retirement as Executive Chairman
In recognition of Dr. Sperling’s many years of service with the Company and the important contributions he has made as founder, leader and visionary, in December 2012, we approved a special retirement bonus for him in the amount of $5,000,000 that was paid in January 2013. The Compensation Committee’s independent compensation consultant advised that this bonus was reasonable in light of the circumstances and the relevant market data. Dr. Sperling will also receive reimbursement of the reasonable out-of-pocket costs he incurs over his lifetime to obtain continued medical and dental care coverage under the Company’s self-insured employee group health plan, whether pursuant to his COBRA rights or otherwise, but subject to applicable laws and regulations now or hereafter governing such reimbursement arrangements. No adjustments were made to the terms of Dr. Sperling’s existing equity awards. Accordingly, his vested equity awards remain outstanding in accordance with their terms, including the satisfaction of any remaining performance goals, but all unvested awards held by Dr. Sperling terminated upon his retirement effective December 31, 2012.
Compensation Governance
The core of Apollo’s executive compensation continues to be pay for performance and the framework includes the compensation governance features summarized below:
no hedging of Apollo securities,
robust stock ownership requirements,
no tax gross-ups for parachute payments in connection with a change in control event, and
no excessive compensation risk taking.
II.    OUR COMPENSATION PHILOSOPHY AND OBJECTIVES
The overarching principle governing our compensation philosophy for executive officers is to maintain a pay-for-performance approach by tying a significant portion of each executive officer’s compensation to our financial performance. To support this approach, the Compensation Committee utilizes a combination of cash and equity incentive programs under which the compensation of the executive officers will vary with our performance and the market price of our Class A Common Stock. In structuring the various components of total direct compensation, we utilize a balanced risk/reward approach through a predominant long-term equity incentive component that allows the executive officers to share in the appreciation in the market price of our Class A Common Stock through the stock option grants made to them but also reduces the potential for excessive risk-taking through the use of restricted stock unit awards that provide varying levels of compensation as the market price of the Class A Common Stock fluctuates over time.
III.    ROLE OF THE COMPENSATION COMMITTEE
A.
General
The Compensation Committee, in consultation with its independent compensation consultant, (i) establishes the compensation policies for our executive officers and sets the compensation of our executive officers in accordance with those policies, (ii) analyzes the reasonableness and competitiveness of the various components of compensation paid, (iii) evaluates the effectiveness of each component in achieving the compensation objectives stated above, and (iv) assesses the risks posed by our compensation structure. The Compensation Committee also obtains legal advice regarding executive compensation matters from its independent outside legal counsel.
The Compensation Committee periodically seeks input from our Chief Executive Officer and other senior executive officers with respect to certain items of compensation, including their recommendations regarding the parameters of the annual cash incentive program, the bonus amounts to be paid under that program and their proposals regarding long-term equity incentive awards. The information provided to the Compensation Committee also includes tally sheets for each named executive officer detailing:
the components of the named executive officer’s compensation for the current and two prior fiscal years, including cash compensation, equity-based compensation, 401(k) company match contributions and perquisites; and
potential payouts under the termination of employment and change of control provisions under our Executive Officer Severance Pay Plan, the named executive officer’s applicable equity compensation plans, and, if applicable, the named executive officer’s employment agreement.
The tally sheets bring together in one place all of the elements of actual and potential future compensation of the named executive officers. This allows the Compensation Committee to analyze both the individual elements of compensation (including the compensation mix) and the aggregate total amount of actual and projected compensation.
All final decisions regarding executive officer compensation are made solely by the Compensation Committee and are based on a number of factors, including its independent evaluation of management proposals, its own internal deliberations and the input provided by its independent compensation consultant.

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