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APOLLO EDUCATION GROUP INC filed this Form DEF 14C on 12/27/2013
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Interaction with Compensation Consultants
Beginning with the 2006 fiscal year and continuing through the current 2014 fiscal year, the Compensation Committee has retained the services of Pearl Meyer & Partners as its independent compensation consultant to assist with its periodic review of existing compensation programs for our executive officers and the formulation and implementation of new executive compensation arrangements. In addition, Pearl Meyer & Partners has assisted the Compensation Committee with related projects, such as establishing equity retention guidelines for the executive officers and non-employee directors, evaluating non-employee director compensation levels and providing advice and relevant market data with respect to the design of various cash and equity-based executive compensation programs.
The Compensation Committee retains Pearl Meyer & Partners directly, although in carrying out its assignments, Pearl Meyer & Partners may also interact with our management to the extent necessary and appropriate. Pearl Meyer & Partners has not been retained to perform any consulting or advisory services for our management. For assistance with more significant compensation projects, our management has retained the services of a different compensation consultant.
Pay Levels and Market Data
We begin our process of deciding how to compensate our named executive officers by considering the competitive market data provided by our independent compensation consultant, Pearl Meyer & Partners, and the Company’s executive compensation team.
In order to determine competitive compensation practices, the Compensation Committee relies on compensation data provided by Pearl Meyer & Partners. The data is derived principally from surveys of compensation practices of comparable companies, including general survey data compiled and presented by Pearl Meyer & Partners and additional data developed by Pearl Meyer & Partners from public filings by selected companies that the Compensation Committee considers appropriate comparators for the purposes of developing executive compensation benchmarks.
In March 2011, the Compensation Committee reviewed a revised approach presented by Pearl Meyer & Partners for purposes of selecting companies for inclusion in a revised Comparator Group more similar to us. Pearl Meyer & Partners recommended that a new Comparator Group be constructed on the basis of the following financial criteria: (i) market capitalization in the range of $3 billion to $15 billion, (ii) price-to-sales ratio in the range of 1.0 to 3.0, (iii) annual revenue at the same $2 billion to $10 billion range, (iv) average free cash flow over the past five years in the range of $400 million to $2 billion and (v) an average return on equity for the past five years greater than 19% or an average return on invested capital for the past five years greater than 10%.
For the 2013 fiscal year, the Compensation Committee retained the Comparator Group constructed on such basis. The Comparator Group in effect for benchmarking compensation decisions made for the 2013 fiscal year compensation was comprised of the following companies:
Activision Blizzard, Inc.
Intuit, Inc.
Alliance Data Systems Corp.
Laboratory Corp. of American Holdings
AutoZone, Inc.
McGraw-Hill Cos. Inc./The
CA Inc.
Nordstrom, Inc.
Expedia, Inc.
Quest Diagnostics Inc.
Expeditors Int’l of Washington, Inc.
Symantec Corp
Fiserv, Inc.
The Washington Post Co.
International Game Technology