|
|
|
|
|
|
|
Weight
|
|
Objective
|
|
Performance Factors
|
|
30%
|
|
Drive financial results for shareholders
|
|
•
Total company net flows
•
Operating income and margin
growth
•
Maintain a strong
balance sheet and continue returning capital to shareholders
|
The
Company's 2016 business performance and financial results were largely driven by a $66 million decline in revenue compared to the prior year. The year-over-year decline was driven by an
increase in negative performance fees, as a result of underperformance in the Janus Equity and INTECH strategies, as well as lower management fees. 2016 business performance and financial results are
as follows:
-
•
-
Total Company Net Flows:
Total
company long-term net flows in 2016 of $(3.0) billion compared to $(2.6) billion in 2015, and $(4.9) billion in 2014. The Company is encouraged with net inflows of $1.3 billion in the Fixed
Income strategies during the year following the leadership change that took place for this business at the end of the first quarter of 2016.
-
•
-
Operating Income and
Margin:
Operating income of $262 million in 2016 was down 19% compared to 2015, resulting in an operating margin of 26% for 2016 compared
to 30% in 2015.
-
•
-
Adjusted Operating Income and
Margin:
2016 operating income adjusted for merger-related costs of $275 million was down 15% compared to 2015, resulting in an operating
margin of 27% for 2016 compared to 30% in 2015. See page 33 of the Original Filing for detail on Non-GAAP adjustments.
-
•
-
Balance Sheet and Returning Cash to
Shareholders:
The Company maintained a strong balance sheet during the year and generated $262 million of cash flow from operations.
Additionally, over the course of 2016, the Company returned $149 million to shareholders in the form of share repurchases and regular dividends, which was equivalent to 57% of annual cash flow
from operations.
-
•
-
Total Shareholder Return:
Total
one-year shareholder return through December 31, 2016 was (3)% compared to 2% for the Company's Public Company Peer Group and 12% for the S&P 500.
The Committee's Evaluation of Financial Results:
Based on the slight decline in total company net flows year-over-year, the decline in operating margins largely
due to a drop in performance fee revenues, the Company's strong balance sheet, and the continued return of capital to shareholders, the Committee assigned a rating of
0.6 to
1.0
to the objective of "Financial Results" in 2016. This represents a decline from the prior year rating of 1.1 to 1.5 to this objective.
18
Table of Contents
|
|
|
|
|
|
|
Weight
|
|
Objective
|
|
Performance Factors
|
|
40%
|
|
Drive strategic results for long-term success for clients and shareholders
|
|
•
Deliver on client promises
•
Execute
Intelligent Diversification
initiatives
•
Ensure operational excellence
|
The
Company's multi-year strategic plan focuses on investment performance, client service, financial strength, and
Intelligent Diversification. Intelligent
Diversification
includes several growth initiatives, including growing the fixed income business by maximizing the opportunities for the fundamental and global macro
strategies, expanding our non-U.S. distribution capabilities, strengthening our U.S. Intermediary distribution capabilities, and further advancing our diversification through organic and
potentially inorganic research, development, and investment. The strategic results section of the scorecard focuses on the progress achieved in executing the
Intelligent
Diversification
initiatives and on other key strategic priorities during the year.
-
•
-
Announced Merger of Equals:
The
Company announced a transformational merger of equals with Henderson Group plc in 2016. This merger represents a significant opportunity for clients, shareholders and employees of the Company.
-
•
-
Grow the Fixed Income
Business:
Following a change in leadership in early 2016, the Fixed Income business had $1.3 billion of net flows, an organic growth rate
of 3%, marking the 8
th
consecutive year of organic growth for this business. Encouragingly, growth during the year came from both Retail and Institutional clients in both the U.S.
and non-U.S. markets.
-
•
-
Expand Non-U.S. Distribution
Capabilities:
Non-U.S. distribution finished 2016 with $2.7 billion in net flows, an organic growth rate of 6%, representing the
6
th
consecutive year of organic growth for this business, and the company's strategic relationship with Dai-ichi Life continues to assist with ongoing growth in Japan.
-
•
-
Strengthen U.S. Intermediary
Distribution:
The U.S. Intermediary channel had $2.8 billion of net flows, a 5% organic growth rate, which compared favorably on a
relative basis to meaningful outflows across the U.S. active mutual fund industry. Additionally, during the year, the company expanded its wholesaling team to continue capitalizing on momentum in the
channel
The Committee's Evaluation of Strategic Results:
Based on the transformational merger with Henderson Group plc, the significant achievements executing the
Intelligent Diversification
initiatives and the progress on numerous key strategic priorities during 2016, including asset retention in the fixed income
business, and demonstrated strength of the U.S. and non-U.S. distribution teams, the Committee assigned a rating of
1.6 to 2.0
to the objective of
"Strategic Results" in 2016. This represents an increase from the prior year rating of 1.1 to 1.5.
Based
on the investment performance, financial results, and the progress executing the Company's strategic initiatives described above, the Committee established the cumulative
"Overall Performance Rating" rating at
1.1 to 1.5
for 2016, which is consistent with the rating the Committee established
in 2015.
19
Table of Contents
Summary of the Committee's
Evaluation of CEO Compensation:
The
CEO's actual total compensation for 2016 was $7.69 million, consisting of a base salary of $0.575 million and total variable compensation of $7.11 million.
The CEO's variable compensation represented approximately 93% of his total direct compensation in 2016. The 8% year-over-year decline in CEO total compensation is aligned with the Company's absolute
and
relative performance and remains situated under the median total compensation amount when compared to the Company's Public Company Peer Group.
Base Salary:
Since joining Janus in 2010, Mr. Weil's base salary has only been adjusted once, from $500,000 to $575,000 at the beginning of 2015. The
Committee continues to believe that Mr. Weil should be compensated almost exclusively through variable compensation and determined not to issue an increase in Mr. Weil's base salary for
2017.
Actual Total Variable Compensation:
The CEO's actual total variable compensation award was determined by multiplying the $5.6 million target total variable
compensation amount by the Committee-determined Overall Performance Rating. Total variable compensation was awarded 50% as a cash bonus and 50% in LTI awards. The value of the CEO's LTI awards were
granted as follows:
-
•
-
50% in the form of a restricted stock award that will vest in four equal and consecutive annual installments, with the first installment
vesting one year after the date of grant; and
-
•
-
50% in the form of a performance share unit ("PSU") award that may or may not vest, in whole or in part, three years after the date of grant,
at the end of the performance period. The PSUs have a one-year holding period following vesting, and dividends are not paid on unvested PSUs. See page 36 for additional details regarding
Mr. Weil's PSU award for 2016.
PSU Award Vesting:
Mr. Weil's 2013 PSU award vested at 54.33% of target in 2017, for a total of 53,110 stock units. The vesting provision for this award of
97,747 units was 3-year cumulative operating margin from 2014 through 2016, adjusted for merger-related costs in 2016 (totaling $13.3 million). Cumulative margin for this period was 29.2%,
versus a target of 31.0%, and a vesting range between 27% and 35%.
20
Table of Contents
Other NEO Compensation
This section describes how each of the other NEO's compensation is tied to performance for 2016. When determining the amount of compensation paid to the other
NEOs, as described below, the Committee considered, among other factors, the following:
-
•
-
The Committee's evaluation of each of the other NEOs, and the CEO's evaluation of other NEOs performance;
-
•
-
Alignment between individual compensation and the objectives of the Company's compensation programs, which are aligned with Company profits;
-
•
-
Individual performance and contributions to investment, financial, and strategic goals, such as those listed in the
"
Analysis of Pay for Performance
" section beginning on page 15;
-
•
-
Alignment of pay to performance (
i.e., median pay for median
performance);
-
•
-
Market compensation levels and structures for similarly situated executives that reflect the scope and characteristics of Janus operations and
each of the other NEOs' individual responsibilities;
-
•
-
The results of recent say-on-pay votes and related discussions with shareholders;
-
•
-
Individual expertise, skills, knowledge, and tenure in position; and
-
•
-
The continued evolution of the Company's compensation programs and the related recommendations of the Committee's Compensation Consultants.
Ultimately,
it is the Committee's judgment of these factors, along with competitive data, that form the basis for determining the other NEOs' compensation.
Base
salary represents a small proportion of our other NEOs' compensation (11% in 2016) and salary increases are rare, as the Committee believes the other NEOs should receive a significant portion of
their compensation as variable compensation as it better correlates to Company
performance. The Committee determined that no salary increases were warranted for any NEO for 2017.
The
Committee emphasizes variable compensation as the primary element of the other NEOs' compensation program, illustrated by the fact that 89% of the other NEOs' total direct compensation was
variable compensation and not guaranteed, including 37% in the form of LTI awards.
Variable
compensation awards paid to the other NEOs are based upon their contributions toward Company-wide investment performance, financial results, and strategic priorities, as
well as their performance compared to individual objectives. These awards are determined following an assessment of each of the other NEOs:
-
•
-
Contribution toward Company performance against the scorecard objectives:
-
•
-
deliver investment excellence for clients,
-
•
-
drive financial results for shareholders, and
21
Table of Contents
-
•
-
drive strategic results for long-term success.
-
•
-
Performance compared to individual objectives which reflect the unique responsibilities and opportunities of each role.
Based
upon each of the other NEOs' individual performance and contributions to the Company's objectives, 2016 variable compensation awards for the NEOs are in alignment with Company results. Compared
to 2015, variable compensation awards for NEOs (excluding Mr. Chang, who was not a NEO in 2015) were all down 12%.
The
compensation described above differs from the amounts shown in the "
Summary Compensation Table
" on page 31 because the above compensation
shows variable compensation associated with 2015 performance that was determined and paid to the other NEOs in 2016.
While
there is no specific weighting, nor is there a requirement that individual contributions be measured across scorecard objectives, each of the other NEOs made meaningful contributions toward the
following Company objectives described in the scorecard approach used to assess the CEO's performance, which were considered by the Committee in establishing variable compensation awards for 2016:
Bruce L. Koepfgen, President
-
•
-
Mr. Koepfgen partnered with distribution leadership in U.S. Intermediary to continue to upgrade talent and drive positive
results. The business saw $2.8 billion of net flows in 2016 (a 5% organic growth rate), despite industry headwinds in active retail.
-
•
-
Mr. Koepfgen led both the U.S. Intermediary and U.S. Institutional businesses through Gibson Smith's departure as CIO,
Fixed Income. Firm-wide asset retention in Fixed Income products was strong, with overall net flows totaling $1.3 billion despite the leadership change.
-
•
-
Overall growth in U.S. Institutional remains slower than internal expectations.
-
•
-
Mr. Koepfgen oversaw a reorganization of Janus' Product and Marketing department, which now has expanded capabilities in
thought leadership, Janus Labs, and digital marketing.
-
•
-
Mr. Koepfgen was among those instrumental to the discussions around and eventual announcement of the merger of equals with
Henderson Group plc, and has been leading the integration efforts since the announcement on October 3, 2016.
Enrique Chang, President, Head of Investments
-
•
-
Mr. Chang assumed the role of President, Head of Investments on April 1, 2016, and now oversees all Equity,
Fundamental Fixed Income, and Asset Allocation Investments professionals. Before then, he had been CIO, Equity and Asset Allocation since his hire in September, 2013.
-
•
-
Mr. Chang's tenure as head of all Equity products now exceeds 3 years, and during that time risk-adjusted returns in
Equity strategies have been strong overall on a 3-year performance basis, with 81% of Fundamental Equity AUM in the top half of their Morningstar categories as of December 31, 2016.
-
•
-
Short-term Investment performance fell short of expectations in 2016, with only 46% of Fundamental Equity and 11% of Fixed Income
products in the top half of their Morningstar categories as of December 31, 2016.
22
Table of Contents
-
•
-
Mr. Chang fostered a smooth transition for the Fundamental Fixed Income team after Gibson Smith's departure as CIO, Fixed
Income. He also led an effort during 2016 to create Investment Policy Statements for all Fixed Income products.
-
•
-
Mr. Chang was a key partner in broad firm strategy discussions, including those around the planned merger of equals with
Henderson Group plc.
Jennifer J. McPeek, Executive Vice President and CFO
-
•
-
Ms. McPeek was integral to many of the processes leading up to the announced merger of equals with Henderson
Group plc, including financial due diligence, financial forecasting/synergy estimation, strategic communication with Janus' Board of Directors, and new role/responsibility design for new
Executive Committee.
-
•
-
Since the merger announcement, Ms. McPeek has assumed additional responsibilities, including oversight of the
Operations & Technology departments, which will be under her purview once the merger is complete.
-
•
-
Ms. McPeek continues to oversee the Company's cost management and budgeting processes. 2016 financial results declined from
2015, as Operating Income (adjusted for deal-related expenses) fell 15%. Adjusted operating margin also fell from 29.9% in 2015 to 27.2% in 2016.
-
•
-
During 2016, Ms. McPeek also led the structuring, due diligence, and successful completion of investment in LongTail Alpha.
-
•
-
Since Ms. McPeek became CFO in 2013, the Company has executed a robust share repurchase program, maintained a strong
balance sheet, and has been instrumental in driving increases in the quarterly dividend each year. In 2016, the Company generated $262 million of cash flow from operations and returned
$149 million to shareholders in the form of dividends and share repurchases, which is a payout ratio of 57%.
Augustus Cheh, President of Janus International
-
•
-
Mr. Cheh has led the Non-US business since he joined the Company in 2011. Beginning in 2012, net flows have been positive
in each year, and AUM has more than tripled, hitting high watermarks for six consecutive years at a compound annual growth rate (CAGR) of 28%.
-
•
-
In 2016, International organic growth was $2.7 billion, representing a 6% growth rate. As of December 31, 2016, the
Non-US business constituted 24% of the firm's total AUM, as compared with 8%* when he joined Janus in March 2011.
-
•
-
Mr. Cheh was among those instrumental in retaining the majority of Fixed Income AUM with International clients after Gibson
Smith's departure as CIO, Fixed Income.
-
•
-
Mr. Cheh worked to improve Key Performance Indicator transparency and channel-level reporting for the International
business during 2016, leading to more precise analysis and measurement of business results.
-
•
-
Mr. Cheh expanded relationships with large global distributors and key clients during 2016, positioning the business for
future success.
-
*
-
Number
is adjusted from previously 2011 AUM numbers to exclude assets in Canada in order to be consistent with how Janus currently calculates Non-US AUM.
23
Table of Contents
Elements of Executive Compensation
In addition to compensation amounts that are competitive and appropriate, the Committee intends for the compensation program to be internally fair and
equitable relative to roles, responsibilities, and relationships among NEOs. Accordingly, the Committee also considers other factors in the process of determining compensation levels for each NEO,
other than the CEO, including those factors described elsewhere in this CD&A.
The
Committee believes that Janus provides pay for performance programs that are externally competitive and internally equitable (similar pay opportunities for similar roles and
responsibilities), and that support the following compensation program objectives:
-
•
-
Alignment:
Align the interests of executives with those of both
shareholders and clients.
-
•
-
Pay for Performance:
Reward performance against investment, financial, and
strategic (non-financial) results over the short- and long-term.
-
•
-
Competitive Pay:
Attract, retain and motivate top performing executives by
offering competitive total compensation opportunities.
-
•
-
Risk Management:
Mitigate and control excessive risk-taking that could harm
the Company's business, its shareholders, or its clients.
Janus
pays base salaries to attract talented executives and to provide a fixed amount of cash compensation. Base salaries for the NEOs are individually determined by the Committee, in consultation
with the Compensation Consultants, and reflect the NEOs level of responsibility, expertise, skills, knowledge, and experience. The Committee determines the base salary amounts for the upcoming fiscal
year each December.
Other
than for the CEO, President, and CFO, variable compensation for all Janus employees is generally paid out of a pool of funds equal to a percentage of consolidated operating income before the
deduction of incentive compensation ("pre-incentive operating income"). The overall pools from which variable compensation awards are granted are a function of the Company's performance in any given
year. Based on underperformance in the Company's largest Janus equity and fixed income strategies, as well as INTECH, and declines in both revenue and operating income in 2016, there was a notable
decrease in the Company's variable compensation pools in 2016.
Variable
compensation is awarded in the form of cash and LTI awards (consisting of a mix of PSUs, restricted stock, and mutual fund unit ("MFUs") awards in 2016). Half of the CEO's compensation is in
the form of LTI awards, and the other NEOs receive a significant portion of their variable compensation in the form of LTI awards.
Variable
compensation awards to NEOs are typically granted as a combination of cash and equity (in the form of LTI awards), with equity comprising a significant portion of the total variable
compensation award. By awarding a portion of the total variable compensation award as cash, the Committee is able to provide appropriate short-term incentives for the NEOs, which is an important
24
Table of Contents
retention
element of our overall compensation philosophy. Awarding a significant portion of the total variable compensation award as equity serves two fundamental compensation objectives:
(i) LTI awards reinforce a longer-term focus that balances the short-term nature of the cash award; and (ii) when used in conjunction with the stock ownership guidelines, LTI awards
ensure the NEOs acquire and maintain a meaningful stock position in the Company, which creates a strong alignment between the interests of the NEOs and the long-term interests of Janus shareholders.
Stock ownership levels for each NEO are reviewed annually by the Committee and evaluated against the minimum stock ownership guidelines as described under "
Ownership
Guidelines
" on page 28. As of February 24, 2017, Mr. Weil's equity ownership exceeded 20 times his base salary.
As
set forth in the "
Summary Compensation Table
" on page 31, the Company issued the following types of long-term incentives for NEOs in 2016:
|
|
|
|
|
|
|
Title
|
|
Type of Awards
|
|
Vesting Schedule
|
|
CEO
|
|
50% Restricted Stock
|
|
4-year ratable time-based vesting (i.e., 25% each year)
|
|
|
|
50% Performance Share Units
|
|
3-year cliff performance-based vesting, based on 3-year relative TSR
|
|
President
|
|
85% Restricted Stock
|
|
4-year ratable time-based vesting (i.e., 25% each year)
|
|
|
|
15% Mutual Fund Unit Awards
|
|
4-year ratable time-based vesting (i.e., 25% each year)
|
|
President, Head of Investments
|
|
56% Restricted Stock
|
|
4-year ratable time-based vesting (i.e., 25% each year)
|
|
|
|
44% Mutual Fund Unit Awards
|
|
4-year ratable time-based vesting (i.e., 25% each year)
|
|
Other NEOs
|
|
100% Restricted Stock
|
|
4-year ratable time-based vesting (i.e., 25% each year)
|
The
Committee grants LTI awards to our CEO and the other NEOs in the form of restricted stock awards ("RSA"s), PSUs and MFUs. LTI grants account for a significant portion of NEO compensation to
provide alignment between executive compensation and the interests of our shareholders and fundholders. RSAs are the most common form of awards for the other NEOs. In 2016, the CEO received half of
his LTI in the form of PSUs which vest based upon three-year relative total share return (defined below), and the President and President, Head of Investments received a portion of their respective
LTI in the form of MFUs, which is appropriate given their respective roles in the Company. The Committee evaluates and determines the appropriate forms and mix of LTI awards on a periodic basis,
including consideration of the market data provided by the Compensation Consultants. In keeping with its goal of providing market competitive compensation to the Company's executives, the Committee
determined that RSAs would be the primary form of LTI award granted to the other NEOs in 2016.
Compensation Decision-Making Process
The Committee determines the levels and type of compensation paid to the NEOs. The Committee also considers the scope of each NEOs responsibilities, skills,
and talents, demonstrated leadership capabilities, compensation relative to similarly situated peers, and Company and individual performance on an absolute and relative basis. External factors, such
as market compensation levels, unforeseen issues that arise during the year that may lead to a change or reprioritization of
25
Table of Contents
pre-established
goals or objectives, and Compensation Consultant recommendations, are also taken into consideration.
The
Committee, in consultation with the Board and management, reviews the material terms of the Company's compensation policies and programs for all employees, and identifies
compensation-related risks that are reasonably likely to have a material adverse impact on Janus, as well as features of the Company's compensation programs that could encourage excessive risk-taking.
The Compensation Committee reports regularly to the Board.
Janus
competes for top executive talent with a broad and diverse range of public and privately owned asset management firms, including firms that, from a size and complexity
perspective, are smaller, larger, or similar to Janus. Recognizing this wide range of competitors and acknowledging the complexity associated with pay and performance comparisons, the
Committee:
-
•
-
Reviews compensation practices using two primary comparator groups recommended by McLagan: (i) a Custom Peer Group of 17 companies that
are considered most comparable to Janus relative to size, complexity and operating structure; and (ii) a Public Company Peer Group consisting of 12 companies that broadens the survey sample and
allows shareholders to obtain important comparative information independently;
-
•
-
Considers the Company's size as compared to the companies in the Custom and Public Company Peer Groups based on revenue and AUM, evaluates
relative performance against both peer groups, and acknowledges the Company's current strategic efforts to transition to a more globally diverse organization; and
-
•
-
Does not benchmark specific elements of compensation for any of the NEOs and it does not establish target percentiles for the other NEOs when
determining individual compensation decisions in comparison to the Company's peers.
Our
Custom Peer Group includes 17 companies that are most similar to Janus relative to size, business complexity, and operating structure. This group includes companies that are publicly owned, like
Janus, as well as privately owned companies and asset management subsidiaries of larger companies. In 2016, the Committee reviewed the composition of the Custom Peer Group and determined that no
changes were necessary.
In
determining the reasonableness of the 17-company Custom Peer Group, the Committee acknowledges that: (i) no single competitor company is exactly like Janus; (ii) Janus competes with a
broad range of companies for executive talent; and (iii) the Custom Peer Group provides data from publicly traded asset management companies in addition to the confidential data from private
companies, which provides the Committee with a more complete view of the competitive landscape.
The
Committee believes that the Custom Peer Group for 2016 provides a reasonable frame of reference for evaluating executive pay levels and practices given a combination of factors, including the
competitors' size, geographic scope, operating structure, product breadth, operating complexity,
26
Table of Contents
channel
coverage, ownership, history, and performance. The Custom Peer Group consists of the following firms:
|
|
|
|
|
Janus's Custom Peer Group
|
|
|
|
Affiliated Managers Group
|
|
Neuberger Berman Group
|
AllianceBernstein Holding L.P.
|
|
Nuveen Investments
|
American Century Investments
|
|
Old Mutual Asset Management
|
Delaware Investments
|
|
Oppenheimer Funds, Inc.
|
Eaton Vance Management
|
|
Putnam Investments
|
Jennison Associates, LLC
|
|
T. Rowe Price Associates, Inc.
(1)
|
Lazard Asset Management LLC
|
|
Waddell & Reed, Inc.
|
MFS Investment Management
|
|
Western Asset Management Co.
|
Morgan Stanley Investment Management
|
|
|
-
(1)
-
Considered
in the pay analysis for all other NEOs. This company was not included in the CEO pay analysis due to the incumbent's significant equity holdings which may
or may not have had a distortive impact on that CEO's compensation.
Our
Public Company Peer Group takes into consideration companies with similar business models and represents peers with which the Company may compete for talent, but it also includes companies that
are, in some cases, substantially larger than Janus on a revenue and/or AUM basis. The Public Company Peer Group provides shareholders the opportunity to make independent comparisons of the Company's
relative pay and performance. The Committee believes that public asset management companies that compete with Janus for business and talent provide better pay and performance comparisons than do
companies that are only similar to Janus based on the amount of revenues or assets. There are a smaller number of publicly traded global asset management companies that are similar to Janus when the
following factors are taken into consideration: size, geographic scope, operating structure, product breadth, operating complexity, distribution coverage, ownership, history, and performance. The
Committee acknowledges that the Public Company Peer Group includes companies that are larger than Janus, and for that and other reasons as described on page 16 under the section titled
"
Analysis of Pay for Performance — Compensation Committee Decisions about CEO Pay — Setting Total Variable Compensation
Target
," decided to adjust the CEO's 2016 variable compensation target downward by approximately one-third compared with median total variable pay data from this peer group.
The Committee reviewed the composition of the Public Company Peer Group in 2016 and determined that no changes were necessary.
27
Table of Contents
The
Public Company Peer Group consists of the following firms:
|
|
|
|
|
Janus's Public Company Peer Group
|
|
|
|
Affiliated Managers Group, Inc.
|
|
Franklin Resources, Inc.
|
AllianceBernstein Holding L.P.
|
|
Invesco Ltd.
|
Ameriprise Financial, Inc.
|
|
Legg Mason, Inc.
|
Cohen & Steers, Inc.
|
|
Old Mutual Asset Management
|
Eaton Vance Corp.
|
|
T. Rowe Price Group, Inc.
|
Federated Investors, Inc.
|
|
Waddell & Reed Financial, Inc.
|
In
making compensation decisions, the Committee relies in part on advice from the Compensation Consultants who provide an objective perspective, comprehensive comparative data on the
financial services industry, pay for performance approaches, and general best practices, which enhance the quality of the Committee's decisions.
Management
assists the Committee by providing information and recommendations on Janus's various compensation programs. At the beginning of each year, the CEO, in conjunction with
Janus's Human Resources department and other key leaders within Janus, recommends to the Board and the Committee the investment, financial, and strategic objectives for the Company. During the year,
management provides the Board and the Committee with periodic progress reports. At the end of each year, management presents the Committee with its evaluation of the Company's performance against
those objectives. The CEO then evaluates the individual performance of each member of the senior management team and recommends levels of compensation (other than his own) to the Committee for review
and approval.
Shareholder Outreach and Review of Compensation Practices
At the 2016 annual meeting of shareholders, approximately 86% of the votes cast were in favor of the advisory vote to approve executive compensation, which
was in line with the 2015 approval rate of approximately 86% and 2014 approval rate of approximately 90%. The Company actively considers the results of the advisory vote to approve executive
compensation each year and engages regularly with its shareholders throughout the year, which provides shareholders with an opportunity to raise issues. The Committee will continue to look for
appropriate opportunities in which to engage shareholders prior to material changes to the Company's executive compensation structure.
Additional Compensation Practices and Policies
The
Compensation Committee determines the minimum stock ownership guidelines for the CEO, the other NEOs, and all members of the Company's Executive Committee. Ensuring that
executive officers own a meaningful number of shares in the Company more closely aligns their economic interests with our shareholders.
-
•
-
The CEO is required to hold Janus equity or mutual fund holdings equal to at least 20 times his annual base salary. The CEO currently holds
shares worth substantially more than the required 20 times his annual base salary.
28
Table of Contents
-
•
-
All other members of the Executive Committee are required to hold Janus equity or mutual fund holdings equal to at least four times his or her
annual salary within seven years of becoming subject to the ownership requirement.
As
of February 24, 2017, all NEOs and Executive Committee members are either meeting the guidelines, or on track to fulfill guidelines by the required deadline.
The
Company generally believes that reasonable severance benefits should be provided to employees without individual performance issues whose employment is terminated due to role
elimination. Fair and reasonable severance benefits provide some support to terminated employees as they seek new employment. Severance benefits also provide Janus an opportunity to obtain a release
of legal claims and enforce additional restrictive covenants (such as non-solicitation clauses), which help protect the business. A description of the severance benefits available to each NEO is
outlined in the "
Executive Compensation — Termination and Change in Control Arrangements with Named Executive Officers
" section
beginning on page 40.
Change
in control severance benefits for certain executives are generally intended to mitigate the potential conflict of interest that may arise in a change in control transaction
and therefore align the interests of those executives with the interests of Janus shareholders. Relative to the overall value of Janus, these potential change in control benefits are reasonable and
consistent with the general practice among the Company's peers. These benefits are based on a "double trigger" approach and only arise if there is a material negative change to employment arising
from, or within two years after, a change in control of Janus. The change in control benefits does not include any tax gross-up rights and the executives are personally responsible for the payment of
any excise tax. The change in control severance rights of the NEOs, if any, are outlined in the "
Executive Compensation — Termination and Change in Control
Arrangements with Named Executive Officers
" section beginning on page 40. In addition, all LTI awards are subject to accelerated vesting only if (i) there is a
change in control of Janus,
and
(ii) the executive's employment is terminated either by the Company without cause or for "good reason" by the
executive (material diminution in duties, reduction in compensation, or relocation of the principal place of employment) within two years after a change in control of Janus.
In
connection with our proposed merger with Henderson Group plc, we entered into change in control agreements with our CFO, and our President, Head of Investments covering certain terminations
of their employment following a change in control. The change in control severance rights under these agreements are outlined in the "
Executive
Compensation — Termination and Change in Control Arrangements with Named Executive Officers
" section beginning on page 40.
LTI
awards granted to members of the Company's senior management team are subject to recovery or "clawback" in the event that there is a material misstatement in the financial
statements and such misstatement is found to be the result of such senior executive's active participation in, knowing concealment of, or knowing failure to identify, such misstatement. Any LTI award
granted to the applicable senior executive in the three years prior to the misstatement is subject to recovery by Janus (e.g., by forfeiture of unvested awards or repayment of vested awards).
This policy supports the Company's commitment to the accuracy of Janus's financial statements and discourages excessive risk-taking.
29
Table of Contents
The
Company prohibits transactions in Janus stock that are speculative in nature by its employees, executives, and directors. Speculative trading includes the use of financial
instruments such as exchange funds, prepaid variable forward contracts, equity swaps, covered calls, collars, and other derivative instruments that could be viewed as severing the alignment with
Janus's shareholders' interests. In addition, short sales and "selling against the box" of all Janus equity securities are prohibited. Directors and executives are also prohibited from pledging Janus
shares. These policies support the Company's commitment to maintain the alignment of the interests of employees with the long-term interests of Janus shareholders.
All
LTI awards are granted pursuant to written grant procedures that are designed to avoid grants of LTI awards when the Committee is aware of material non-public information
concerning Janus. The grant date is established by the Committee and our written grant procedures. Management has no discretion to establish the grant date.
The
Committee annually reviews other benefits provided to the NEOs. We generally provide benefits to our executives that are similar to (if not the same as) those offered to other
Janus employees, except NEOs are also provided the opportunity to participate in the Executive Income Deferral Program. See "
Executive Compensation —
Non-Qualified Deferred Compensation
" on page 39. Other than Ms. McPeek, none of the NEOs elected to participate in this deferral program in 2016. Although some of
the Company's competitors may provide their executives with special perquisites, the Committee believes that the Company can retain top executive talent by providing market-competitive total
compensation opportunities and health and retirement benefits. Currently, the NEOs and all other full-time employees can participate in the following benefit
programs:
-
•
-
Medical, dental, and vision insurance;
-
•
-
Life insurance and short- and long-term disability insurance;
-
•
-
Charitable gift matching by Janus of up to $2,500 per employee per year;
-
•
-
401(k) contribution match of up to 5% of eligible compensation; and
-
•
-
Relocation, housing, travel assistance, and other cost reimbursements.
Section 162(m)
of the Code generally disallows a tax deduction to public companies for compensation greater than $1 million paid in any one fiscal year to a
corporation's CEO and three other most highly compensated executive officers (other than the CFO) as of the end of any fiscal year. However, the statute exempts qualifying performance-based
compensation from the deduction limit if certain requirements are met. Janus generally intends to structure its variable compensation to achieve tax deductibility under Section 162(m). To
facilitate that objective, specified performance thresholds for funding variable compensation must be satisfied before payments are made. Achievement of the threshold performance criteria did not
guarantee that the NEOs would receive any specific variable compensation for 2016.
All
compensation paid in 2016 was deductible; however, the Committee may make compensation decisions that do not result in tax deductibility. The Committee believes that shareholder interests are best
served by allowing the Committee discretion and flexibility in crafting compensation programs, even though such programs may result in certain non-deductible compensation expenses.
30
Table of Contents
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Committee has reviewed and discussed the "
Compensation Discussion and Analysis
" section with management.
Based upon this review and discussion, the Committee has recommended to the Board of Directors that the "
Compensation Discussion and Analysis
" section
be included in this Amendment.
Respectfully,
Members of the Compensation Committee
Lawrence
E. Kochard, Chairman
Eugene
Flood, Jr.
J.
Richard Fredericks
Executive Compensation
Summary Compensation Table
The following table contains information about the compensation that Janus paid during 2016, 2015 and 2014 to the NEOs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and
Principal Position
(a)
|
|
Year
(b)
|
|
Salary
($)
(c)
|
|
Stock Awards
($)
(2)
(d)
|
|
Option Awards
($)
(f)
|
|
Non-Equity
Incentive Plan
Compensation
($)
(6)
(g)
|
|
All Other Compensation
($)
(7)
(i)
|
|
Total
($)
(j)
|
|
|
Richard M. Weil,
|
|
|
2016
|
|
|
575,000
|
|
|
3,555,997
|
(3)
|
|
—
|
|
|
3,556,000
|
|
|
199,126
|
|
|
7,886,123
|
|
|
CEO
|
|
|
2015
|
|
|
575,000
|
|
|
3,892,006
|
(4)
|
|
—
|
|
|
3,892,000
|
|
|
194,106
|
|
|
8,553,112
|
|
|
|
|
|
2014
|
|
|
500,000
|
|
|
4,472,002
|
(5)
|
|
—
|
|
|
2,981,200
|
|
|
194,673
|
|
|
8,147,875
|
|
|
Bruce L. Koepfgen,
|
|
|
2016
|
|
|
500,000
|
|
|
1,229,998
|
|
|
—
|
|
|
2,153,600
|
|
|
121,127
|
|
|
4,004,725
|
|
|
President
|
|
|
2015
|
|
|
500,000
|
|
|
1,500,006
|
|
|
—
|
|
|
2,470,000
|
|
|
93,219
|
|
|
4,563,225
|
|
|
|
|
|
2014
|
|
|
500,000
|
|
|
800,001
|
|
|
—
|
|
|
1,500,000
|
|
|
73,986
|
|
|
2,873,987
|
|
|
Enrique Chang
|
|
|
2016
|
|
|
500,000
|
|
|
2,099,994
|
|
|
—
|
|
|
5,152,000
|
|
|
197,235
|
|
|
7,949,229
|
|
|
President, Head of Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jennifer J. McPeek,
|
|
|
2016
|
|
|
400,000
|
|
|
699,998
|
|
|
—
|
|
|
924,000
|
|
|
66,714
|
|
|
2,090,712
|
|
|
Executive Vice
|
|
|
2015
|
|
|
400,000
|
|
|
689,999
|
|
|
—
|
|
|
1,050,000
|
|
|
47,157
|
|
|
2,187,156
|
|
|
President and CFO
|
|
|
2014
|
|
|
300,000
|
|
|
299,998
|
|
|
—
|
|
|
810,000
|
|
|
37,569
|
|
|
1,447,567
|
|
|
Augustus Cheh,
|
|
|
2016
|
|
|
400,874
|
|
|
1,079,995
|
|
|
—
|
|
|
1,426,000
|
|
|
384,499
|
|
|
3,291,368
|
|
|
President of Janus
|
|
|
2015
|
|
|
401,372
|
|
|
1,029,997
|
|
|
—
|
|
|
1,620,000
|
|
|
362,041
|
|
|
3,413,410
|
|
|
International
(1)
|
|
|
2014
|
|
|
401,200
|
|
|
840,000
|
|
|
—
|
|
|
1,320,000
|
|
|
347,625
|
|
|
2,908,825
|
|
-
(1)
-
Mr. Cheh's
compensation differs slightly year-over-year due to currency fluctuations.
-
(2)
-
Amounts
shown represent the restricted stock awards granted in the reported year for services provided in the prior year, except for: (i) Mr. Weil's
$4,472,002 awards granted in 2014 for services provided in 2014; (ii) Mr. Weil's $3,892,006 awards granted in 2015 for services provided in 2015; and (iii) Mr. Weil's
$3,555,997 awards granted in 2016 for services provided in 2016. The value of each restricted stock award (or restricted stock units in the case of Mr. Cheh, who receives restricted stock units
due to international tax considerations) in this table is determined pursuant to ASC Topic 718 by multiplying the fair market value of Janus common stock on the grant date (the average of the high and
low trading prices on the grant date) by the number of shares granted. The amounts reported for these awards may not represent the amount that the NEO will actually realize from the awards. For a
summary of the
31
Table of Contents
material
assumptions used in the valuation of these awards, see Note 14 to Janus's financial statements for the year ended December 31, 2016, included in the Company's Annual Report on
Form 10-K. Whether, and to what extent, a NEO realizes value will depend on Janus's stock price and the NEO's continued employment.
-
(3)
-
Awards
granted in 2016 consist of a restricted stock award with a fair market value of $1,778,001 that vests over four years and a $1,777,996 PSU award that is
subject to a 3-Year TSR performance metric as calculated at the end of the three-year performance period. The fair value of the PSU is determined pursuant to ASC Topic 718 by using a Monte Carlo
simulation to estimate the expected probability that performance thresholds are achieved. The value included for the PSU award is based on 100% vesting at the end of the performance period. The fair
value that would have been included for the PSU award assuming that the highest level of performance conditions would have been achieved at the end of the performance period (200% vesting) is
$3,555,990. These awards are more fully described on page 35 under the section titled "
Equity and Other Incentive Compensation Arrangements with Named Executive
Officers — Performance Stock Unit Awards.
" The amounts reported for these awards may not represent the amount that the NEO will actually realize from the
awards. Whether, and to what extent, a NEO realizes value will depend on Janus's stock price (with respect to the RSA) and 3-Year TSR (with respect to the PSU award), and the NEO's continued
employment.
-
(4)
-
Awards
granted in 2015 consist of a restricted stock award with a fair market value of $1,946,003 that vests over four years and a $1,946,003 PSU award that is
subject to a 3-Year TSR performance metric as calculated at the end of the three-year performance period. The fair value of the PSU is determined pursuant to ASC Topic 718 by using a Monte Carlo
simulation to estimate the expected probability that performance thresholds are achieved. The value included for the PSU award is based on 100% vesting at the end of the performance period. The
amounts reported for these awards may not represent the amount that the NEO will actually realize from the awards. Whether, and to what extent, a NEO realizes value will depend on Janus's stock price
(with respect to the RSA) and 3-Year TSR (with respect to the PSU award), and the NEO's continued employment.
-
(5)
-
Awards
granted in 2014 consist of a restricted stock award with a fair market value of $2,236,001 that vests over four years and a $2,236,001 PSU award that is
subject to a 3-Year OIM (defined below) performance metric as calculated at the end of the three-year performance period. The value of the PSU award is determined pursuant to ASC Topic 718 by
multiplying the fair market value of Janus common stock on the grant date (the average of the high and low trading prices on the grant date) by the number of shares granted. The value included for the
PSU award is based on 100% vesting at the end of the performance period. The amounts reported for these awards may not represent the amount that the NEO will actually realize from the awards. Whether,
and to what extent, a NEO realizes value will depend on Janus's stock price (with respect to the RSA) and three-year operating margin (with respect to the PSU award), and the NEO's continued
employment.
-
(6)
-
The
amounts shown in the "
Non-Equity Incentive Plan Compensation
" column represent compensation earned under the
variable compensation plans in accordance with at least the achievement of predetermined Section 162(m) performance goals as certified by the
32
Table of Contents
Compensation
Committee. Compensation under these plans consists of cash bonuses. The amounts set forth in the Non-Equity Incentive Plan Compensation column include the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Year
|
|
Cash Awards
($)
|
|
Mutual Fund
Unit Awards
($)
|
|
Total
($)
|
|
|
Richard M. Weil
|
|
|
2016
|
|
|
3,556,000
|
|
|
—
|
|
|
3,556,000
|
|
|
|
|
|
2015
|
|
|
3,892,000
|
|
|
—
|
|
|
3,892,000
|
|
|
|
|
|
2014
|
|
|
2,981,200
|
|
|
—
|
|
|
2,981,200
|
|
|
Bruce L. Koepfgen
|
|
|
2016
|
|
|
1,953,600
|
|
|
200,000
|
|
|
2,153,600
|
|
|
|
|
|
2015
|
|
|
2,220,000
|
|
|
250,000
|
|
|
2,470,000
|
|
|
|
|
|
2014
|
|
|
1,500,000
|
|
|
—
|
|
|
1,500,000
|
|
|
Enrique Chang
|
|
|
2016
|
|
|
3,864,000
|
|
|
1,288,000
|
|
|
5,152,000
|
|
|
Jennifer J. McPeek
|
|
|
2016
|
|
|
924,000
|
|
|
—
|
|
|
924,000
|
|
|
|
|
|
2015
|
|
|
1,050,000
|
|
|
—
|
|
|
1,050,000
|
|
|
|
|
|
2014
|
|
|
810,000
|
|
|
—
|
|
|
810,000
|
|
|
Augustus Cheh
|
|
|
2016
|
|
|
1,426,000
|
|
|
—
|
|
|
1,426,000
|
|
|
|
|
|
2015
|
|
|
1,620,000
|
|
|
—
|
|
|
1,620,000
|
|
|
|
|
|
2014
|
|
|
1,320,000
|
|
|
—
|
|
|
1,320,000
|
|
-
(7)
-
The
amounts shown in the "
All Other Compensation
" column include the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Year
|
|
401(k)
Matching
Contributions
($)
|
|
Company-
paid
Premiums
($)
(a)
|
|
Health
Insurance
Premiums
($)
(b)
|
|
Dividends
on Unvested
Restricted
Stock
($)
|
|
Other
($)
|
|
Total
($)
|
|
|
Richard M. Weil
|
|
|
2016
|
|
|
11,925
|
|
|
3,531
|
|
|
26,631
|
|
|
157,039
|
|
|
—
|
|
|
199,126
|
|
|
|
|
|
2015
|
|
|
10,600
|
|
|
3,388
|
|
|
13,923
|
|
|
166,195
|
|
|
—
|
|
|
194,106
|
|
|
|
|
|
2014
|
|
|
10,400
|
|
|
2,937
|
|
|
13,336
|
|
|
168,000
|
|
|
—
|
|
|
194,673
|
|
|
Bruce L. Koepfgen
|
|
|
2016
|
|
|
11,925
|
|
|
3,360
|
|
|
14,998
|
|
|
90,844
|
|
|
—
|
|
|
121,127
|
|
|
|
|
|
2015
|
|
|
10,600
|
|
|
3,179
|
|
|
13,923
|
|
|
65,517
|
|
|
—
|
|
|
93,219
|
|
|
|
|
|
2014
|
|
|
10,400
|
|
|
3,022
|
|
|
13,336
|
|
|
47,228
|
|
|
—
|
|
|
73,986
|
|
|
Enrique Chang
|
|
|
2016
|
|
|
11,925
|
|
|
2,850
|
|
|
14,998
|
|
|
167,462
|
|
|
—
|
|
|
197,235
|
|
|
Jennifer J. McPeek
|
|
|
2016
|
|
|
11,925
|
|
|
2,622
|
|
|
5,269
|
|
|
46,898
|
|
|
—
|
|
|
66,714
|
|
|
|
|
|
2015
|
|
|
10,600
|
|
|
2,391
|
|
|
4,743
|
|
|
29,423
|
|
|
—
|
|
|
47,157
|
|
|
|
|
|
2014
|
|
|
10,400
|
|
|
2,125
|
|
|
4,686
|
|
|
20,358
|
|
|
—
|
|
|
37,569
|
|
|
Augustus Cheh
|
|
|
2016
|
|
|
20,044
|
(c)
|
|
4,357
|
|
|
29,940
|
|
|
80,070
|
(d)
|
|
250,088
|
(e)
|
|
384,499
|
|
|
|
|
|
2015
|
|
|
20,069
|
(c)
|
|
1,921
|
|
|
27,816
|
|
|
62,220
|
(d)
|
|
250,015
|
(e)
|
|
362,041
|
|
|
|
|
|
2014
|
|
|
20,060
|
(c)
|
|
1,866
|
|
|
19,150
|
|
|
56,190
|
(d)
|
|
250,359
|
(e)
|
|
347,625
|
|
-
(a)
-
Includes
premiums paid by the Company on behalf of the NEO for group term life insurance, accidental death and dismemberment insurance, short-term and long-term
disability insurance, and identity theft protection services.
-
(b)
-
Health
insurance benefits are generally available to all employees, and include health, dental and vision.
-
(c)
-
Amounts
include the contributions to the Hong Kong Mandatory Provident Fund on Mr. Cheh's behalf.
-
(d)
-
Mr. Cheh
receives restricted stock units instead of restricted stock awards due to international tax considerations. As a result, Mr. Cheh receives
dividend equivalents in the form of restricted stock units, instead of cash dividends.
-
(e)
-
Amounts
include the housing allowance received by Mr. Cheh.
33
Table of Contents
Grants of Plan-Based Awards in 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#) (i)
|
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#) (j)
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under
Non-Equity Incentive Plan
|
|
Estimated Future Payouts Under
Equity Incentive Plan
(3)
|
|
Exercise
or Base
Price of
Option
Awards
($/Sh)
(k)
|
|
Grant Date
Fair Market
Value of
Stock and
Option Awards
($)
(4)
(l)
|
|
|
Name
(a)
|
|
Grant
Date
(b)
|
|
Threshold
($)
(c)
|
|
Target
($)
(1)
(d)
|
|
Maximum
($)
(e)
|
|
Threshold
(#)
(f)
|
|
Target
(#)
(g)
|
|
Maximum
(#)
(h)
|
|
|
Richard M.
|
|
|
12/31/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
132,885
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,778,001
|
|
|
Weil
|
|
|
12/31/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
134,666
|
(5)
|
|
267,551
|
|
|
|
|
|
|
|
|
|
|
|
1,777,996
|
|
|
|
|
|
1/1/2016
|
|
|
|
|
|
3,556,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,555,997
|
|
|
Bruce L.
|
|
|
1/29/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,229,998
|
|
|
Koepfgen
|
|
|
1/1/2016
|
|
|
|
|
|
1,953,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2017
|
|
|
|
|
|
200,000
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enrique
|
|
|
1/29/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
170,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,099,994
|
|
|
Chang
|
|
|
1/1/2016
|
|
|
|
|
|
3,864,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2017
|
|
|
|
|
|
1,288,000
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jennifer J.
|
|
|
1/29/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
699,998
|
|
|
McPeek
|
|
|
1/1/2016
|
|
|
|
|
|
924,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Augustus
|
|
|
1/29/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93,205
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,160,065
|
(6)
|
|
Cheh
|
|
|
1/1/2016
|
|
|
|
|
|
1,426,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Represents
variable cash compensation paid in 2017 in respect of performance in 2016 under the variable compensation programs, except Mr. Koepfgen's and
Mr. Chang's MFU award as described in footnote (2) below. Such plans had a performance period beginning January 1, 2016.
-
(2)
-
Represents
a MFU award granted in 2017 in respect of performance in 2016. See "
Equity and Other Incentive Compensation Arrangements with Named
Executive Officers
" section on page 35 below for more information about MFU awards.
-
(3)
-
For
Mr. Weil, represents shares of restricted stock and PSU awards that are subject to a 3-Year TSR performance metric granted during 2016 for services
provided in 2016, as described in footnote (5) below. For all other NEOs except for Mr. Cheh, represents shares of restricted stock granted during 2016 in respect of performance in 2015.
For Mr. Cheh, represents restricted stock units granted during 2016 in respect of performance in 2015, except as described in footnote (6) below. The restricted stock awards and
restricted stock units ratably vest over four years. Each unvested share of restricted stock held by a NEO is entitled to cash dividends declared on Janus common stock, which recently has been at the
quarterly rate of $0.11 per share. This cash dividend payment is included within "
All Other Compensation
" of the "
Summary
Compensation Table
" on page 31. Mr. Cheh receives dividend equivalents on his restricted stock units in the form of additional restricted stock units, instead of
cash dividends, as described in footnote (6) below. This value of these additional restricted stock units is also included with "
All Other
Compensation
" of the "
Summary Compensation Table
" on page 31.
-
(4)
-
Represents
the fair market value of the awards on grant date, as required by ASC Topic 718.
-
(5)
-
Mr. Weil
received 132,885 shares of restricted stock that vest over four years, and 134,666 shares of PSU awards that are subject to a 3-Year TSR performance
metric as calculated at the end of the three-year performance period. These awards are more fully described on page 35 under "
Equity and Other Incentive Compensation
Arrangements with Named Executive Officers — Performance Stock Unit Awards
."
-
(6)
-
Includes
5,756 restricted stock units with a value of $80,070 granted as dividend equivalents on February 25, 2016, May 20, 2016, August 19,
2016 and November 18, 2016.
Employment Arrangements with Named Executive Officers
We do not have a formal written employment agreement with any of the NEOs. Each NEO receives an annual base salary and is entitled to all health and
retirement benefits offered to the Company's other senior executives (Hong Kong executives in the case of Mr. Cheh). Mr. Cheh is also entitled to an annual housing allowance of
approximately $250,000.
Each
of the NEOs has agreed that during his or her employment and for a period of one year after his or her termination not to (i) employ or attempt to employ or engage on behalf of any
competitive business any employee or contractor of Janus or any of its affiliates (individually, a "Janus Entity"); or (ii) divert, attempt to divert, solicit or engage on behalf of any
competitive business, any business of an investment advisory or investment management client of a Janus Entity, to which a Janus Entity rendered services during the six-month period immediately
preceding his or her termination. Such restrictions are referred to as the "Non-Solicitation Obligations" in this Amendment.
During
his employment and for a period of one year after his termination of employment, Mr. Cheh agreed to restrictive covenants similar to the Non-Solicitation Obligations as described above,
except that the restrictive covenants related to Janus customers or clients applies for six months after his termination to customers of any Janus Entity during the two year period prior to his
termination and with whom he had material contacts.
34
Table of Contents
All
variable compensation awards are determined by the Compensation Committee. Any awards to the NEOs are subject to, at a minimum, at least the achievement of performance criteria in compliance with
Section 162(m) of the Code. (A more detailed description of the NEOs' compensation arrangements can be found in the "
Compensation Discussion and
Analysis
" section of this Amendment, beginning on page 13.)
Equity and Other Incentive Compensation Arrangements with Named Executive Officers
Restricted stock, stock options, MFUs, and PSUs set forth in the "
Summary Compensation Table
" on
page 31 were granted pursuant to the terms of the Amended and Restated 2010 LTI Plan, the Janus Capital Group Inc. 2005 Long Term Incentive Stock Plan (the "2005 LTI Plan"), and the
Amended and Restated Janus Mutual Fund Share Investment Plan (the "Mutual Fund Plan"). For a summary of awards vesting in 2016, refer to the "
2016 Options Exercised and
Restricted Stock Vested
" table on page 39.
Restricted Stock
Restricted
stock awards granted since 2009 are subject to a four-year ratable vesting schedule. Vesting of restricted stock awards accelerates if the executive dies or becomes
disabled.
Additionally,
the vesting of restricted stock awards granted prior to April 25, 2012 accelerates if the executive meets the Company's requirement of 55 years of age and ten years of
service (referred to collectively as "age and service requirement") and terminates employment. Restricted stock awards granted after April 25, 2012 continue to vest (subject to the executive's
continuing compliance with applicable restrictive covenants) in accordance with the award's original vesting schedule if the executive meets the Company's age and service requirement or is
60 years of age ("age requirement") upon termination of employment due to retirement.
Restricted
stock awards granted prior to December 30, 2011 have accelerated vesting immediately upon a change in control of Janus. Restricted stock awards granted after such date are subject to
accelerated vesting if (i) there is a change in control of Janus
and
(ii) within two years of the change in control, the executive's
employment is terminated either by Janus without cause or for "good reason" by the executive (material diminution in duties, reduction in compensation or relocation of the principal place of
employment).
Each
unvested share of restricted stock held by an executive is entitled to cash dividends declared on Janus common stock. This dividend payment is included within the "
All
Other Compensation
" column of the "
Summary Compensation Table
" on page 31.
Performance Stock Unit Awards
The 2014 performance stock unit awards ("2014 PSU Awards"), which were only granted to the CEO, will vest only if the Company's 3-Year OIM as of
December 31, 2017 is greater than 24%. If the 3-Year OIM equals 28%, then 100% of Mr. Weil's PSUs will vest. If the 3-Year OIM is greater than or equal to 32%, then 200% of
Mr. Weil's PSUs will vest. All amounts between 24%, 28%, and 32% will be interpolated on a straight line basis. The 2014 PSU Awards have a one-year holding period following vesting, and
dividends are not paid on unvested PSU awards.
Additionally,
if the executive dies or becomes disabled, the 2014 PSU Awards will vest based upon the Company's applicable performance through the date of the latest quarterly financial statements
prior to the executive's death or disability. If there is a change in control of Janus, the performance criteria for the 2014 PSU Awards shall be measured based on the applicable performance through
the date of the company's latest quarterly financial statements prior to the change in control, and the
35
Table of Contents
portion
of the 2014 PSU Awards that is earned based upon such measurement will convert into a time-based award that will vest in full on December 31, 2017, subject to continued employment
through such date. If, within two years after the change in control, the executive's employment is terminated by Janus without cause or for "good reason" by the executive (material diminution in
duties, reduction in compensation, or relocation of the principal place of employment), the converted 2014 PSU Awards will vest in full on the date of the termination.
The 2015 performance stock unit awards ("2015 PSU Awards"), which were only granted to the CEO, vest if the Company's three-year total shareholder return
relative to the Company's Public Company Peer Group ("3-Year TSR") is at or above the 10
th
percentile ranking among its Public Company Peer Group as of December 31, 2018`.
The potential payout ranges from zero to 200% of the number of units initially granted. Target payout of 100% is earned at approximately the 50
th
percentile and a maximum payout
is earned at a 90
th
percentile ranking or above, provided that a payout cannot exceed 400% of the grant value. Even if the Company's 3-Year TSR
on a relative basis is above the peer group median, if the Company's 3-Year TSR on an absolute basis is negative, a payout cannot exceed 100% of the number of units initially granted. The 2015 PSU
Awards have a one-year holding period following vesting, and dividends are not paid on unvested PSU awards.
Additionally,
if the executive dies or becomes disabled, the 2015 PSU Awards will vest based upon the Company's applicable performance through the last trading date prior to the executive's death or
disability. If there is a change in control of Janus, the performance criteria for the 2015 PSU Awards shall remain in effect and be measured at the end of the performance period on
December 31, 2018, subject to continued employment through such date. If, following the change in control and prior to December 31, 2018, the executive's employment is terminated by
Janus without cause or for "good reason" by the executive (material diminution in duties, reduction in compensation, or relocation of the principal place of employment), the 2015 PSU Awards will vest
based on achievement of the performance criteria measured as of the last trading date prior to the date of the termination (determined using the average closing stock price for the shares of Janus
common stock for the 90 trading day period immediately preceding the termination date).
The 2016 performance stock unit awards ("2016 PSU Awards"), which were only granted to the CEO, vest if the Company's 3-Year TSR (defined above on
page 36) is at or above the 10
th
percentile ranking among its Public Company Peer Group as of December 31, 2019. The potential payout ranges from zero to 200% of the
number of units initially granted. Target payout of 100% is earned at approximately the 50
th
percentile and a maximum payout is earned at a 90
th
percentile
ranking or above, provided that a payout cannot exceed 400% of the grant value. Even if the Company's 3-Year TSR on a relative basis is above the peer group median, if the Company's 3-Year TSR on an
absolute basis is negative, a payout cannot exceed 100% of the number of units initially granted. The 2017 PSU Awards have a one-year holding period following vesting, and dividends are not paid on
unvested PSU awards.
Additionally,
if the executive dies or becomes disabled, the 2016 PSU Awards will vest based upon the Company's applicable performance through the last trading date prior to the executive's death or
disability. If there is a change in control of Janus, the performance criteria for the 2016 PSU Awards shall remain in effect and be measured at the end of the performance period on
December 31, 2019, subject to continued employment through such date. If, following the change in control and prior to December 31, 2019, the executive's employment is terminated by
Janus without cause or for "good reason" by the executive (material diminution in duties, reduction in compensation, or
36
Table of Contents
relocation
of the principal place of employment), the 2016 PSU Awards will vest based on achievement of the performance criteria measured as of the last trading date prior to the date of the
termination (determined using the average closing stock price for the shares of Janus common stock for the 90 trading day period immediately preceding the termination date).
Stock Options
Janus
has significantly reduced the number of stock option grants made to its executives. Stock option awards granted since 2009 are subject to a four-year ratable vesting schedule.
The vesting of the stock option awards accelerates if the executive dies or becomes disabled. Additionally, the vesting of stock option awards granted prior to April 25, 2012 accelerates if the
executive meets the age and service or age requirement and terminates employment. Stock option grants made after April 25, 2012 continue to vest in accordance with the award's original vesting
schedule if the executive meets the age and service or age requirement upon termination of employment due to retirement.
Stock
options are subject to accelerated vesting if (i) there is a change in control of Janus
and
(ii) within two years of the change in
control, the executive's employment is terminated either by Janus without cause or for "good reason" by the executive (material diminution in duties, reduction in compensation or relocation of the
principal place of employment).
Mutual Fund Units
The
Mutual Fund Plan is designed to grant eligible employees LTI awards in the form of cash compensation that is subject to a vesting schedule and credited with income, gains and
losses based on the performance of the Janus mutual fund investments selected by the participant from a list of Janus-designated mutual funds. Once vested, the net cash proceeds are used to purchase
shares of the Janus mutual funds selected by the participant (or the Janus Money Market Fund if such mutual fund is not available). Awards under the Mutual Fund Plan granted to our NEOs are set forth
in the "Non-Equity Incentive Plan Compensation" column of the "
Summary Compensation Table
" on page 31 above. Awards made under the Mutual Fund
Plan have a four-year ratable vesting schedule. The vesting of all MFU awards will accelerate if the executive dies or becomes disabled. MFU awards continue to vest in accordance with the award's
original vesting schedule if the executive meets our service or age requirement upon termination of employment due to retirement. MFU awards are subject to accelerated vesting if (i) there is a
change in control of
Janus and (ii) within two years of the change in control, the executive's employment is terminated either by Janus without cause or for "good reason" by the executive (material diminution in
duties, reduction in compensation or relocation of the principal place of employment). Upon vesting, executives receive the cash value of the award adjusted for earnings or losses attributed to the
mutual funds to which the award was indexed, subject to legally required tax withholding.
37
Table of Contents
Outstanding Equity Awards at 2016 Year-End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
Name
(a)
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
(b)
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
(1)
(c)
|
|
Option
Exercise
Price ($)
(e)
|
|
Option
Expiration
Date
(f)
|
|
Number of
Shares or
Units of
Stock That
Have
Not Vested
(#)
(g)
|
|
Market
Value of
Shares or
Units of
Stock
That Have
Not Vested
($)
(h)
|
|
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have
Not Vested
(#)
(2)
(i)
|
|
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares,
Units or
Other
Rights That
Have
Not Vested
($)
(7)
(j)
|
|
|
Richard M. Weil
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
329,129
|
|
|
4,367,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
97,747
|
(3)
|
|
1,297,103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
137,178
|
(4)
|
|
1,820,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
138,901
|
(5)
|
|
1,843,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
134,666
|
(6)
|
|
1,787,018
|
|
|
Bruce L. Koepfgen
|
|
|
151,515
|
|
|
—
|
|
|
8.57
|
|
|
2/1/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,091
|
|
|
11,364
|
|
|
9.77
|
|
|
2/1/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
216,295
|
|
|
2,870,235
|
|
|
Enrique Chang
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
398,720
|
|
|
5,291,014
|
|
|
Jennifer J. McPeek
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
108,606
|
|
|
1,441,202
|
|
|
Augustus Cheh
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
194,109
|
|
|
2,575,826
|
|
-
(1)
-
Stock
options are subject to a four-year ratable vesting schedule.
-
(2)
-
Represents
total unvested restricted stock and restricted stock unit awards as of December 31, 2016 (except as described in footnotes 3, 4, and 5). The awards
are subject to a four-year ratable vesting schedule.
-
(3)
-
Represents
the 2013 PSU Awards as of December 31, 2016. The 2013 PSU Awards are subject to a three-year cliff vesting schedule. The award is subject to a
3-Year OIM performance metric as calculated at the end of the three-year performance period. Mr. Weil has 97,747 PSUs that were granted in 2013 which have the potential to be earned at 200%.
-
(4)
-
Represents
the 2014 PSU Awards as of December 31, 2016. The 2014 PSU Awards are subject to a three-year cliff vesting schedule. The award is subject to a
3-Year OIM performance hurdle as calculated at the end of the three-year performance period. Mr. Weil has 137,178 PSUs that were granted in 2014 which have the potential to be earned at 200%.
-
(5)
-
Represents
the 2015 PSU Awards as of December 31, 2016. The 2015 PSU Awards are subject to a three-year cliff vesting schedule. The award is subject to a
3-Year TSR performance metric as calculated at the end of the three-year performance period. Mr. Weil has 138,901 PSUs that were granted in 2015 which have the potential to be earned at 200%.
-
(6)
-
Represents
the 2016 PSU Awards as of December 31, 2016. The 2016 PSU Awards are subject to a three-year cliff vesting schedule. The award is subject to a
3-Year TSR performance metric as calculated at the end of the three-year performance period. Mr. Weil has 134,666 PSUs that were granted in 2016 which have the potential to be earned at 200%.
-
(7)
-
The
value of each award was calculated by multiplying the closing value of Janus common stock on December 30, 2016 ($13.27 per share) by the number of awards
outstanding as of December 31, 2016. Mr. Weil's 2013 PSU Awards, 2014 PSU Awards, 2015 PSU Awards and 2016 PSU Awards were valued assuming they are earned at 100%.
38
Table of Contents
2016 Options Exercised and Restricted Stock Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Restricted Stock Awards
|
|
|
Name
(a)
|
|
Number of
Shares
Acquired on
Exercise (#)
(b)
|
|
Value Realized
on Exercise ($)
(c)
|
|
Number of
Shares
Acquired on
Vesting (#)
(d)
|
|
Value Realized
on Vesting ($)
(1)
(e)
|
|
|
Richard M. Weil
|
|
|
468,750
|
|
|
1,195,313
|
|
|
177,658
|
|
|
2,377,064
|
|
|
Bruce L. Koepfgen
|
|
|
—
|
|
|
—
|
|
|
70,492
|
|
|
869,166
|
|
|
Enrique Chang
|
|
|
—
|
|
|
—
|
|
|
292,009
|
|
|
3,600,471
|
|
|
Jennifer J. McPeek
|
|
|
—
|
|
|
—
|
|
|
29,024
|
|
|
369,032
|
|
|
Augustus Cheh
|
|
|
—
|
|
|
—
|
|
|
79,215
|
|
|
976,721
|
|
-
(1)
-
The
value of each vested restricted stock award was calculated by multiplying the fair market value (the average of the high and low trading prices on the vesting
date) of Janus common stock on the vesting date by the number of shares that vested.
Pension Benefits
None of the NEOs participates in or has benefits accrued under any qualified or non-qualified defined benefit plan sponsored by Janus.
Non-Qualified Deferred Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Executive
Contributions
in Last FY
($)
|
|
Registrant
Contributions
in Last FY
($)
|
|
Aggregate
Earnings in
Last FY
($)
(2)
|
|
Aggregate
Withdrawals/
Distributions
($)
|
|
Aggregate
Balance at
Last FYE
($)
(3)
|
|
|
Richard M. Weil
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Bruce L. Koepfgen
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Enrique Chang
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Jennifer J. McPeek
(1)
|
|
|
152,000
|
|
|
—
|
|
|
4,333
|
|
|
—
|
|
|
301,626
|
|
|
Augustus Cheh
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
-
(1)
-
Ms. McPeek's
contributions in 2016 to the Amended and Restated Executive Income Deferral Program were reported in the "Salary" column of the
"
Summary Compensation Table
" for 2016 on page 31.
-
(2)
-
None
of the aggregate earnings reported in this column were determined to be above-market.
-
(3)
-
A
portion of the aggregate balance reported in this column equal to $145,293 was previously reported in the "Salary" column of the "
Summary
Compensation Table
" for 2015.
Under
the Amended and Restated Executive Income Deferral Program, the NEOs and other executives of the Company and its affiliates may elect to defer payment of up to 70% of their base salary, all or a
portion of their annual cash bonus, and all or a portion of their restricted stock awards. All compensation deferred under this program is credited during the deferred period with the gains and losses
of certain Janus-affiliated mutual funds selected by the participant, and all restricted stock awards deferred will convert into restricted stock units. A participant's interest in the deferred
compensation is payable in a single payment or in installments upon a specified date (at least two years after the deferral) following separation from service. In the event of a change in control,
each participant's account will be distributed in a lump sum payment following such change in control.
39
Table of Contents
Termination and Change in Control Arrangements with Named Executive Officers
The intent of this section is to isolate those payments and benefits for which the amount, vesting, or time of payment is altered by the termination of
employment in the described circumstances. We have not entered into employment agreements with our NEOs; however, we are party to change in control agreements with our CEO, our CFO, and our President,
Head of Investments covering certain terminations of his or her employment following a change in control, as described below. We have not entered into change in control agreements with our President
or our President of Janus International, and as a result, the post-termination benefits for Messrs. Koepfgen and Cheh are addressed by the plan or award agreement relating to each element of
compensation. In addition, we do not provide for "single trigger" vesting of awards upon a change in control. For purposes of estimating the payments and benefits that would apply, consistent with SEC
requirements, these amounts have been calculated as if each NEO's employment had been terminated as of December 31, 2016, using the closing value of our common stock on December 30, 2016
($13.27 per share).
Termination
Upon
a voluntary or involuntary termination, no NEO is entitled to any payment or benefit, the NEO will forfeit any unvested LTI awards and will have three months following
termination to exercise any unvested stock options, except as described below in connection with termination due to death, disability, retirement, or a change in control termination.
Elimination of Position
Based
on the Company's current severance guidelines, in the unlikely event that Janus eliminated the role of any NEO, he or she would be entitled to the
following:
-
•
-
A cash payment equal to a minimum of six and a maximum of 12 months of annual base salary (determined by tenure).
-
•
-
A pro-rata portion of cash bonus based on the previous year's actual bonus payment (assuming termination after July 1).
-
•
-
A minimum of six and a maximum of 12 months of health and welfare benefits (determined by tenure).
-
•
-
Any unvested LTI awards would be forfeited and he or she will have three months following termination of employment to exercise any vested
stock options.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Elimination of Position
|
|
Weil ($)
|
|
Koepfgen ($)
|
|
Chang ($)
|
|
McPeek ($)
|
|
Cheh ($)
|
|
|
Cash Severance
|
|
|
4,179,500
|
|
|
2,470,000
|
|
|
4,450,000
|
|
|
1,283,333
|
|
|
1,945,480
|
|
|
Long-term Incentive Vesting
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Benefits
(1)
|
|
|
19,816
|
|
|
13,999
|
|
|
13,999
|
|
|
9,573
|
|
|
21,470
|
|
|
Total
|
|
|
4,199,316
|
|
|
2,483,999
|
|
|
4,463,999
|
|
|
1,292,907
|
|
|
1,966,950
|
|
-
(1)
-
Benefits
include medical benefits, outplacement services, and any applicable retirement contributions.
Death, Disability, or Retirement
If
a NEO's employment is terminated due to death or disability, unvested LTI awards (other than Mr. Weil's PSU Awards) will immediately vest. In the case of
Mr. Koepfgen he (or his estate) will have one year to exercise any vested stock options following termination of employment. Mr. Weil's
40
Table of Contents
unvested
PSU Awards would vest as described beginning on page 35 under the section titled "
Equity and Other Incentive Compensation Arrangements with Named Executive
Officers
."
If
a NEO retires and meets the age and service or age requirements, as applicable, his or her unvested LTI awards (other than Mr. Weil's unvested PSU Awards and Mr. Chang's unvested
performance-based MFUs, which are not eligible for vesting upon retirement) shall continue to vest as described beginning on page 35 under the section titled "
Equity and
Other Incentive Compensation Arrangements with Named Executive Officers
." The NEO will have five years following retirement to exercise any vested stock options.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death, Disability or Retirement
|
|
Weil ($)
|
|
Koepfgen ($)
|
|
Chang ($)
|
|
McPeek ($)
|
|
Cheh ($)
|
|
|
Cash Severance
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Long-term Incentive Vesting
(1)
|
|
|
11,115,231
|
(2)
|
|
3,183,602
|
|
|
11,695,652
|
(3)
|
|
1,441,202
|
|
|
2,575,826
|
|
|
Benefits
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
|
11,115,231
|
|
|
3,183,602
|
|
|
11,695,652
|
|
|
1,441,202
|
|
|
2,575,826
|
|
-
(1)
-
Long-term
incentive award vesting reflects acceleration of restricted stock, options, performance-based restricted stock units, MFU awards , and performance-based
MFUs (as applicable to each participant). For performance-based restricted stock units and performance-based MFUs that have performance criteria applicable in these termination circumstances, we have
assumed that 100% of the performance criteria was met.
-
(2)
-
For
Mr. Weil, in the case of termination due to Retirement the amount would be $4,367,542 since his PSUs are not eligible for vesting upon Retirement.
-
(3)
-
For
Mr. Chang, in the case of termination due to Retirement the amount would be $8,446,008 since his performance-based MFUs are not eligible for vesting upon
Retirement.
Change in Control
If either of Messrs. Koepfgen or Cheh resign from Janus more than two years after a change in control or without good reason within two years after a
change in control, he is not entitled to any payment or benefit. In addition, upon any such resignation, outstanding unvested LTI awards for the relevant NEO will be forfeited and he will have three
months to exercise any vested stock options.
Janus has entered into change in control agreements with each of Ms. McPeek and Mr. Chang providing for severance payments and benefits in the
event of a qualifying termination of employment following the consummation of a change in control of Janus. The change in control agreements provide that, if, within two years following a change in
control, the executive officer's employment is terminated by Janus (other than for cause or due to death or disability) or by the
executive officer for "good reason" (as defined below), Janus will provide the following payments and benefits to the executive officer:
-
•
-
A lump sum severance payment equal to one and a half times his or her base salary plus one and a half times his or her annual cash bonus earned
with respect to the calendar year ending prior to the date of such termination.
-
•
-
Outplacement services for three months.
-
•
-
In addition, in the event that his or her employment is terminated for any reason within two years following a change in control, Janus will
pay him or her an amount equal to his or her regular
41
Table of Contents
annual
bonus compensation earned in respect of the calendar year ending prior to the date of such termination, pro-rated for the year of termination.
The
executive officers are not entitled to an excise tax gross-up payment. Any cash or non-cash payments will be reduced if such reduction results in a higher after-tax payment to the executive
officer than if the full amounts were paid.
For
purposes of these executive officers' change in control agreements, "good reason" means the occurrence of any one of the following events: (i) a material negative change in the nature,
status or scope of his or her responsibilities (other than specific changes agreed to in connection with the merger), (ii) a material negative change in his or her base salary, or
(iii) the relocation of his or her principal place of employment that results in an increase in his or her daily commute by more than
40 miles in one direction (other than as agreed to in connection with the merger, in the case of Mr. Chang).
The
executive officers' LTI awards are also subject to vesting if he or she is terminated by Janus without cause or he or she terminates for good reason, in each case within two years after a change
in control
Janus has entered into a change in control agreement with Mr. Weil providing for severance payments and benefits in the event of a qualifying
termination of employment following the consummation of a change in control of Janus. The change in control agreement provides that if Mr. Weil's employment is terminated by Janus without
cause, or if Mr. Weil resigns for "good reason" (as defined below), in each case, within two years following a change in control, Janus will provide the following payments and benefits to
Mr. Weil:
-
•
-
A lump sum severance payment equal to two times the annual target cash compensation in the calendar year immediately preceding the termination
of employment (or if higher, in the calendar year immediately preceding the change in control).
-
•
-
A lump sum severance payment equal to two times the value of Janus's contributions made on behalf of Mr. Weil to the Janus 401(k),
Profit Sharing and ESOP Plan in the four calendar quarters prior to termination of employment (or if higher, in the four calendar quarters prior to the change in control).
-
•
-
Continued medical, dental, and vision insurance benefits for 24 months for Mr. Weil and his dependents.
-
•
-
Outplacement services for three months.
Mr. Weil
is not entitled to an excise tax gross-up payment. Any cash or non-cash payments will be reduced if such reduction results in a higher after-tax payment to Mr. Weil than if the
full amounts were paid. In the event of any such termination, Mr. Weil may also exercise any vested stock option awards until the award's expiration date.
"Good
reason" arises in Mr. Weil's change in control agreement when there is (without his express written consent): (i) a material negative change in the nature or status of his
responsibilities; (ii) a material negative change to Mr. Weil's aggregate target compensation or an adverse change to the compensation calculation methodology; (iii) a relocation
of the principal place of employment to a location of more than 40 miles that results in a material negative change to the geographic location where Mr. Weil primarily performs services to
Janus (other than as agreed to in connection with the merger); or (iv) a failure to assign his employment-related agreements to a successor company.
42
Table of Contents
Under the terms of Mr. Weil's change in control agreement, Janus is responsible for paying all legal fees and expenses reasonably incurred by Mr. Weil arising
from any dispute concerning the interpretation or enforcement of the agreement plus interest (subject to reimbursement if he does not prevail).
Mr. Weil's
LTI awards are also subject to vesting if he is terminated by Janus without cause, or he terminates for good reason, in each case within two years after a change in control.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Control
|
|
Weil ($)
|
|
Koepfgen ($)
|
|
Chang ($)
|
|
McPeek ($)
|
|
Cheh ($)
|
|
|
Cash Severance
|
|
|
6,750,000
|
|
|
—
|
|
|
14,749,994
|
|
|
3,924,998
|
|
|
—
|
|
|
Long-term Incentive Vesting
(1)
|
|
|
11,115,231
|
|
|
3,183,602
|
|
|
11,695,652
|
|
|
1,441,202
|
|
|
2,575,826
|
|
|
Benefits
(2)
|
|
|
80,362
|
|
|
—
|
|
|
3,250
|
|
|
3,250
|
|
|
—
|
|
|
Total
|
|
|
17,945,593
|
|
|
3,183,602
|
|
|
26,448,896
|
|
|
5,369,450
|
|
|
2,575,826
|
|
-
(1)
-
Long-term
incentive vesting reflects accelerated vesting of restricted stock, options, performance-based restricted stock units and MFU awards (as applicable to each
participant) where the NEO is terminated by Janus without cause, or the NEO terminates for good reason, in each case within two years after a change in control. For performance-based restricted stock
units that have performance criteria applicable in these termination circumstances, we have assumed that 100% of the performance criteria was met.
-
(2)
-
Benefits
include medical benefits, outplacement services and any applicable retirement contributions
Director Compensation
Members of the Board of Directors who are employees of Janus or a designee of Dai-ichi Life do not receive any additional compensation for serving on the
Board. All other members of the Board received the director compensation described below in 2016.
2016
non-employee director compensation consisted of:
-
•
-
An annual restricted stock grant valued on the grant date at approximately $100,000, which vests over three years, subject to immediate
accelerated vesting upon voluntary separation from service, death, disability, or change in control of the Company;
-
•
-
An annual cash retainer of $100,000;
-
•
-
An additional cash retainer of $10,000 per committee;
-
•
-
An additional cash retainer of $25,000 to the Audit Committee chair;
-
•
-
An additional cash retainer of $15,000 if the director chairs the Compensation or Nominating Committee; and
-
•
-
An additional cash retainer of $125,000 to the non-executive Chairman of the Board.
All
members of the Board of Directors are reimbursed for reasonable travel and lodging expenses in connection with attending Board and committee meetings. Janus also offers a matching gift program
where every dollar contributed by a director to an eligible charity is matched dollar-for-dollar up to $2,500.
43
Table of Contents
2016 Director Compensation
The following chart shows the compensation that each non-employee director was paid for his or her services in calendar year 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
(a)
|
|
Fees Earned or
Paid in Cash
($)
(3)
(b)
|
|
Stock Awards
($)
(4)
(c)
|
|
All Other
Compensation
($)
(5)
(g)
|
|
Total
($)
(h)
|
|
|
Timothy K. Armour
(1)
|
|
|
—
|
|
|
—
|
|
|
3,966
|
|
|
3,966
|
|
|
G. Andrew Cox
(1)
|
|
|
—
|
|
|
—
|
|
|
9,396
|
|
|
9,396
|
|
|
Jeffrey J. Diermeier
|
|
|
135,000
|
|
|
100,008
|
|
|
11,891
|
|
|
246,899
|
|
|
Eugene Flood, Jr.
|
|
|
120,000
|
|
|
100,008
|
|
|
6,571
|
|
|
226,579
|
|
|
J. Richard Fredericks
|
|
|
110,000
|
|
|
100,008
|
|
|
32,781
|
|
|
242,789
|
|
|
Deborah R. Gatzek
|
|
|
135,000
|
|
|
100,008
|
|
|
39,716
|
|
|
274,724
|
|
|
Lawrence E. Kochard
|
|
|
125,000
|
|
|
100,008
|
|
|
30,039
|
|
|
255,047
|
|
|
Arnold A. Pinkston
(2)
|
|
|
152,400
|
|
|
127,007
|
|
|
4,377
|
|
|
283,784
|
|
|
Glenn S. Schafer
|
|
|
225,000
|
|
|
100,008
|
|
|
17,789
|
|
|
342,797
|
|
|
Billie I. Williamson
|
|
|
120,000
|
|
|
100,008
|
|
|
6,752
|
|
|
226,760
|
|
-
(1)
-
Retired
effective April 21, 2016.
-
(2)
-
Mr. Pinkston
was appointed an independent director effective January 21, 2016.
-
(3)
-
Amounts
represent the annual cash retainers for serving as members of the Board of Directors, including non-executive Chairman and committee membership retainers,
which are paid in a lump sum on May 1 of each year.
-
(4)
-
The
value of each restricted stock and restricted stock unit award is determined pursuant to FASB Accounting Standards Codification ("ASC") Topic 718 by multiplying
the fair market value of our common stock (the average of the high and low trading prices) on the grant date by the number of shares granted. Amounts represent restricted stock and restricted stock
units granted in 2016 for the 2016-2017 annual stock retainer, including restricted stock units received in connection with the Director Deferred Fee Plan (described below). The restricted stock and
restricted stock units held by each independent director as of December 31, 2016, are as follows: Mr. Armour holds 3,484 restricted stock units; Mr. Cox holds 9,904 restricted
stock units; Mr. Diermeier holds 12,795 shares of restricted stock and 15,696 restricted stock units; Mr. Flood holds 15,663 shares of restricted stock; Mr. Fredericks holds 2,241
shares of restricted stock and 72,679 restricted stock units; Ms. Gatzek holds 96,524 restricted stock units; Mr. Kochard holds 74,307 restricted stock units; Mr. Pinkston holds
8,717 shares of restricted stock; Mr. Schafer holds 5,931 shares of restricted stock and 29,635 restricted stock units; and Ms. Williamson holds 11,144 shares of restricted stock.
44
Table of Contents
-
(5)
-
"All
Other Compensation" includes the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Other
(a)
|
|
Dividends on
Unvested Restricted
Stock ($)
|
|
Dividends on
Unvested Restricted
Stock Units ($)
(b)
|
|
Total ($)
|
|
|
Timothy K. Armour
|
|
|
—
|
|
|
1,173
|
|
|
2,793
|
|
|
3,966
|
|
|
G. Andrew Cox
|
|
|
510
|
|
|
—
|
|
|
8,886
|
|
|
9,396
|
|
|
Jeffrey J. Diermeier
|
|
|
—
|
|
|
5,395
|
|
|
6,496
|
|
|
11,891
|
|
|
Eugene Flood, Jr.
|
|
|
—
|
|
|
6,571
|
|
|
—
|
|
|
6,571
|
|
|
J. Richard Fredericks
|
|
|
2,500
|
|
|
1,137
|
|
|
29,144
|
|
|
32,781
|
|
|
Deborah R. Gatzek
|
|
|
510
|
|
|
—
|
|
|
39,206
|
|
|
39,716
|
|
|
Lawrence E. Kochard
|
|
|
—
|
|
|
—
|
|
|
30,039
|
|
|
30,039
|
|
|
Arnold A. Pinkston
|
|
|
1,500
|
|
|
2,877
|
|
|
—
|
|
|
4,377
|
|
|
Glenn S. Schafer
|
|
|
3,010
|
|
|
3,130
|
|
|
11,649
|
|
|
17,789
|
|
|
Billie I. Williamson
|
|
|
2,500
|
|
|
4,252
|
|
|
—
|
|
|
6,752
|
|
-
(a)
-
The
amount represents Janus's matching gift in respect of a director's charitable contribution during 2016 under the Janus Matching Gift Program and includes Janus's
match for director contributions made in 2015 but not matched until 2016. The amount also includes the membership fees for identity theft protection services (generally available to all employees)
paid by the Company on behalf of the director.
-
(b)
-
This
amount represents the value of dividend equivalents awarded in the form of Restricted Stock Units in 2016 on all grants deferred under the Director Deferred Fee
Plan.
Director Deferred Fee Plan
Under our Amended and Restated Director Deferred Fee Plan ("Director Deferred Fee Plan"), a non-employee director may elect to defer payment of all or any
part of the above director monetary or stock fees until his or her service as a director is terminated. All monetary fees deferred under this plan are credited during the deferral period with the
gains and losses of certain Janus mutual funds or Janus stock, as elected by the director. All Janus stock awards deferred under this plan are converted into restricted stock units at the time of
grant. A director's interest in the deferred monetary fees is generally payable only in cash in a single payment or in installments upon termination of service as a director. Any restricted stock
units granted in connection with the deferral of stock are paid in the form of Janus common stock in a single payment or in installments upon termination of service as a director. The Director
Deferred
Fee Plan is intended to comply with Section 409A of the Internal Revenue Code (the "Code"). Messrs. Fredericks, Kochard, and Schafer and Ms. Gatzek elected to participate in this
plan to defer monetary fees, stock fees, or a combination of both during the 2016 calendar year.
Notwithstanding anything to the contrary set forth in any of Janus's previous filings under the Securities Act of 1933, as amended, or the Exchange Act, as amended, that
incorporated future filings, including this Amendment, the section titled "Compensation Committee Report on Executive Compensation" (on page 31) is not incorporated by reference into any such
filings, except to the extent Janus specifically incorporates any of the reports by reference therein.
45
Table of Contents
