DEF 14A 1 d301982ddef14a.htm DEF 14A DEF 14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.      )

Filed by the Registrant                                Filed by a Party other than the Registrant  

Check the appropriate box:

 

 

 

Preliminary Proxy Statement

 

 

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

 

 

Definitive Proxy Statement

 

 

 

Definitive Additional Materials

 

  Soliciting Material Pursuant to §240.14a-12

Nielsen Holdings plc

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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LOGO

 

NIELSEN HOLDINGS PLC

PROXY STATEMENT

Annual General Meeting of Shareholders

May 23, 2017 | 9:00 a.m. (Eastern Time)


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LOGO


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LOGO

(incorporated and registered in England and Wales with registered no. 09422989)

Registered Office:

AC Nielsen House

London Road

Oxford

Oxfordshire

OX3 9RX

United Kingdom

April 6, 2017

Dear Fellow Shareholders:

On behalf of the Board of Directors (the “Board”), I cordially invite you to attend the Annual General Meeting of Shareholders of Nielsen Holdings plc to be held at 9:00 a.m. (Eastern Time) on Tuesday, May 23, 2017 (the “Annual Meeting”). Once again this year you will be able to attend the Annual Meeting online, vote your shares electronically and ask questions during the meeting by visiting nielsen.onlineshareholdermeeting.com.

Our Board has fixed the close of business on March 24, 2017 as the record date for the determination of shareholders entitled to notice of and to vote at our Annual Meeting and any adjournments or postponements thereof.

Whether or not you plan to attend the Annual Meeting, it is important that your shares be represented and voted at the meeting. You may vote your shares by proxy on the Internet, by telephone or by completing, signing and promptly returning the proxy card (if you received one), or by attending the Annual Meeting online.

We are pleased to once again utilize the U.S. Securities and Exchange Commission (“SEC”) rule allowing companies to furnish proxy materials to their shareholders over the Internet rather than in paper form. We believe that this e-proxy process will expedite our shareholders’ receipt of proxy materials, lower the costs and reduce the environmental impact of our Annual Meeting. Accordingly, unless you have previously requested to receive proxy materials in paper form, you will receive a Notice of Internet Availability of Proxy Materials (the “Notice”). If you received a Notice by mail and did not receive, but would like to receive, a printed copy of our proxy materials, you should follow the instructions for requesting such materials included on page 77 of this proxy statement or in the Notice.

In accordance with the UK Companies Act 2006, the formal notice of the Annual Meeting is set out on the pages following the “Summary of Proxy Information,” which begins on the next page.

Our proxy materials are first being distributed or made available to shareholders on or about April 6, 2017.

Thank you for your continued support.

Sincerely,

 

LOGO

Mitch Barns

Chief Executive Officer

 

 

LOGO

  

2017 PROXY STATEMENT    LTR

 


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LOGO

This summary highlights certain information contained elsewhere in this proxy statement. You should read the complete proxy statement and annexes before voting.

 

 

2016 PERFORMANCE HIGHLIGHTS

We are dedicated to driving shareholder value by posting solid operating performance. The Company’s long-term business performance and progress against strategic initiatives form the context in which pay decisions are made. We have delivered resilient business performance with sustained growth over the last three years.

During 2016:

 

   

We made outstanding progress on the Nielsen Total Audience Measurement framework, with the syndication of Digital Content Ratings and the multi-phased syndication of Total Content Ratings.

 

   

We made good progress on our Connected System initiative. Several charter clients are participating in the development process for this unique and powerful data integration, analytics and activation system.

 

   

Emerging markets performed well, led by India, China, Turkey, Brazil, Mexico, Russia, Indonesia, and Argentina.

 

   

Slowing business growth in the third and fourth quarters along with lowered guidance ranges, driven by performance in our US Buy business, contributed to a decline in share price toward the end of the year versus the beginning of the year.

Further information about our 2016 performance can be found on pages 28-30.

 

 

COMPENSATION HIGHLIGHTS

 

   

Nielsen’s executive compensation programs are design to incent and reward our leadership team to deliver sustainable growth and financial performance while delivering long-term shareholder value.

 

   

A significant portion of each named executive officer’s compensation is at risk, dependent on the achievement of challenging annual and long-term performance goals and/or the performance of our share price.

 

   

In 2016, Nielsen’s variable performance-based compensation plans worked as intended and paid out below target levels due to slowing business growth in the third and fourth quarters, which also impacted our share price. (For further information, see “2014 LTPP Performance Payouts - 2014 LTPP Payouts” and “How Pay Decisions are Made - Annual Incentive Plan - 2016 Results”).

 

 

LOGO

  

2017 PROXY STATEMENT    SUMM1

 


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SUMMARY OF PROXY INFORMATION     

 

 

 

BOARD HIGHLIGHTS

Following the election and re-election of the Board nominees at our Annual Meeting, the Board will have the following characteristics:

 

LOGO

 

 

BOARD EXPERTISE AND SKILLS

Our directors are keenly focused on building a board that supports Nielsen’s strategic goals and evolving business priorities. In that regard, in addition to the areas of experience set forth below, the qualities that are of paramount importance for our director nominees include: a proven record of success and business judgment, innovative and strategic thinking, a commitment to corporate responsibility, appreciation of multiple cultures and perspectives, and adequate time to devote to their responsibilities.

 

                                     
                                                                     
    CEO/Executive Experience           Business and Operating Experience            

Consumer
Goods

Experience

          Innovation, Technology and Digital Experience           Global and Emerging Markets Experience    
                                                 
                                                 
                                                                     
                                     
                                                                     
   

Media Experience

         

Audit and
Risk Oversight Experience and

Financial Literacy

           

Research,

Analytics and

Data Science

Experience

         

Financial and M&A Experience

          Public Company Board and Governance Experience    
                                                 
                                                 
                                                                     

 

 

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2017 PROXY STATEMENT    SUMM2

 


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SUMMARY OF PROXY INFORMATION     

 

 

 

GOVERNANCE HIGHLIGHTS

 

Director

Independence

  

    8 out of 9 of our director nominees are independent

    All Board committees are fully independent

Board

Accountability

  

    All directors are elected annually

    Shareholder right to call special meetings or remove directors

    Simple majority vote standard for uncontested director elections

    No supermajority vote requirements in our articles of association

Board

Leadership

  

    Independent Chairman

Board Refreshment   

    Ongoing Board succession planning

    Average tenure of director nominees is 5.4 years

    4 new independent directors elected since 2013

Board Oversight   

    Ongoing focus on strategic matters, including through stand-alone strategy sessions

    Robust oversight of risk management

    Active engagement in talent management, leadership development and CEO succession planning

Director Engagement   

    All directors attended at least 90% of Board/committee meetings in 2016

    Governance guidelines restrict the number of other board memberships

    In connection with the nomination process, directors’ other responsibilities/obligations considered

Share Ownership   

    Five times their annual cash fees (with a transition period for new directors)

    Directors may not hedge their common stock

    No director has shares of common stock subject to a pledge

    All equity currently granted as director compensation must be held for the director’s entire tenure on the Board

Director Access   

    Independent Chairman actively involved in shareholder engagement

    Directors may contact any employee directly

    Board and its committees may engage independent advisors in their sole discretion

 

 

NOMINEES FOR BOARD OF DIRECTORS

 

Nominee    Age    Director Since   Principal Occupation   Committees
James A. Attwood, Jr.    58              2006   Managing Director, The Carlyle Group   Nomination and Corporate Governance
Mitch Barns    53              2014   Chief Executive Officer, Nielsen Holdings plc  
Karen M. Hoguet    60              2010   Chief Financial Officer of Macy’s Inc.   Audit
James M. Kilts    69              2006   Founding Partner of Centerview Capital   Nomination and Corporate Governance
Harish Manwani    63              2015   Former Chief Operating Officer of Unilever   Compensation
Robert C. Pozen    70              2010   Senior Lecturer at MIT   Audit, Nomination and Corporate Governance
David Rawlinson    41              2017   President of Online Business of W.W. Grainger, Inc.   Audit
Javier G. Teruel    66              2010   Partner of Spectron Desarrollo, SC   Audit
Lauren Zalaznick    54              2016   Former Executive Vice President of NBCUniversal   Compensation

 

 

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2017 PROXY STATEMENT    SUMM3

 


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NIELSEN HOLDINGS PLC

NOTICE OF THE 2017 ANNUAL MEETING

WHEN: May 23, 2017 at 9:00 a.m. (Eastern Time).

WHERE: Online via live webcast at nielsen.onlineshareholdermeeting.com. During the webcast you will be able to vote your shares electronically and ask questions during the meeting.

RECORD DATE: March 24, 2017

ITEMS OF BUSINESS:

At the Annual Meeting, you will be asked to consider and vote on the resolutions under Proposals 1 to 7 in the “Proposals to be Voted Upon” section below as well as such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. Explanations of the proposed resolutions together with the relevant information for each resolution are given on pages 1 to 64 and Annex A of this proxy statement.

The Company’s UK annual report and accounts for the year ended December 31, 2016, which consist of the UK statutory accounts, the UK statutory directors’ report, the UK statutory directors’ compensation report, the UK statutory strategic report and the UK statutory auditor’s report (the “UK Annual Report and Accounts”) has been made available to shareholders together with the other proxy materials. There will be an opportunity at the Annual Meeting for shareholders to ask questions or make comments on the UK Annual Report and Accounts and the other proxy materials.

For additional information about our Annual Meeting, shareholders’ rights, proxy voting and access to proxy materials, see the “General Information and Frequently Asked Questions About the Annual Meeting” section on pages 73 to 77 of this proxy statement.

 

 

PROPOSALS TO BE VOTED UPON1

The Board considers that all the Proposals to be put to the Annual Meeting are in the best interest of the Company and its shareholders as a whole.

 

Proposal        Board Recommendation    
Proposal No. 1   Election of Directors   LOGO   for each nominee        
Proposal No. 2   Ratification of Independent Registered Public Accounting Firm   LOGO    
Proposal No. 3   Reappointment of UK Statutory Auditor   LOGO    
Proposal No. 4   Authorization of the Audit Committee to Determine UK Statutory Auditor Compensation   LOGO    
Proposal No. 5   Non-Binding, Advisory Vote on Executive Compensation   LOGO    
Proposal No. 6   Non-Binding, Advisory Vote on the Frequency of the Vote on Executive Compensation   LOGO   for one year
Proposal No. 7   Non-Binding, Advisory Vote on Directors’ Compensation Report   LOGO    

 

1   

All resolutions above will be proposed as ordinary resolutions.

 

 

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2017 PROXY STATEMENT    NOT1

 


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NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS     

 

Notes:

 

  1. In accordance with the Company’s articles of association, all resolutions will be taken on a poll. Voting on a poll means that each share represented in person or by proxy will be counted in the vote. All resolutions will be proposed as ordinary resolutions, which under applicable law means that each resolution must be passed by a simple majority of the total voting rights of shareholders who vote on such resolution, whether in person or by proxy. Explanatory notes regarding each of the proposals (and related resolutions) are set out in the relevant sections of the accompanying proxy materials relating to such proposals.

 

  2. The results of the polls taken on the resolutions at the Annual Meeting and any other information required by the UK Companies Act 2006 will be made available on the Company’s website as soon as reasonably practicable following the Annual Meeting and for a period of two years thereafter.

 

  3. To be entitled to attend and vote at the Annual Meeting and any adjournment or postponement thereof, shareholders must be registered in the register of members of the Company at the close of business in New York on March 24, 2017. Changes to the Register of Members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the meeting. If you hold shares through a broker, bank or other nominee, you can attend the Annual Meeting and vote by following the instructions you receive from your bank, broker or other nominee.

 

  4. Shareholders are entitled to appoint a proxy to exercise all or any of their rights to attend and to speak and vote on their behalf at the meeting. A shareholder may appoint more than one proxy in relation to the meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder. A corporate shareholder may appoint one or more corporate representatives to attend and to speak and vote on their behalf at the meeting. A proxy need not be a shareholder of the Company.

 

  5. If you are a shareholder of record or hold shares through a broker, bank or other nominee and are voting by proxy through the Internet, by telephone or by mail, your vote must be received by 11:59 p.m. (Eastern Time) on May 22, 2017 to be counted. A shareholder of record who has returned a proxy instruction is not prevented from attending the Annual Meeting and voting in person if he/she wishes to do so. If you hold shares through Nielsen’s 401(k) plan, the plan trustee, Fidelity Management Trust Company, will vote according to the instructions received from you provided that your instructions are received by 11:59 p.m. Eastern Time on May 18, 2017. Your instructions cannot be changed or revoked after that time, and the shares you hold through the 401(k) plan cannot be voted online at the Annual Meeting.

 

  6. You may revoke a previously delivered proxy at any time prior to the Annual Meeting. Shareholders may vote online at the Annual Meeting, thereby cancelling any previous proxy. Shares held through Nielsen’s 401(k) plan cannot be voted online at the Annual Meeting.

 

  7. Shareholders meeting the threshold requirements set out in the UK Companies Act 2006 have the right to require the Company to publish on the Company’s website a statement setting out any matter relating to: (i) the audit of the Company’s accounts (including the auditor’s report and the conduct of the audit) that are to be presented before the Annual Meeting; or (ii) any circumstance connected with the auditor of the Company ceasing to hold office since the previous annual general meeting at which annual accounts and reports were presented in accordance with the UK Companies Act 2006. The Company may not require the shareholders requesting any such website publication to pay its expenses in complying with the UK Companies Act 2006. Where the Company is required to place a statement on a website under the UK Companies Act 2006, it must forward the statement to the Company’s auditor not later than the time when it makes the statement available on the website. The business which may be dealt with at the Annual Meeting includes any statement that the Company has been required under the UK Companies Act 2006 to publish on a website.

 

  8. Pursuant to SEC rules, the Company’s proxy statement (including this Notice of Annual General Meeting of Shareholders), the Company’s US annual report for the year ended December 31, 2016 (including the Annual Report on Form 10-K for the year ended December 31, 2016), the Company’s UK Annual Report and Accounts and related information prepared in connection with the Annual Meeting are available at: www.proxyvote.com and www.nielsen.com/investors. You will need the 16-digit control number included on your Notice or proxy card in order to access the proxy materials on www.proxyvote.com. These proxy materials will be available free of charge.

 

 

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2017 PROXY STATEMENT    NOT2

 


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NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS     

 

 

 

PROXY VOTING METHODS

Shareholders holding shares of Nielsen Holdings plc (“Nielsen”, “we”, “our” or the “Company”) at the close of business in New York on March 24, 2017 may vote their shares by proxy through the Internet, by telephone or by mail or by attending the Annual Meeting online. For shares held through a bank, broker or other nominee, shareholders may vote by submitting voting instructions to the bank, broker or other nominee. To reduce our administrative and postage costs, we ask that shareholders vote through the Internet or by telephone, both of which are available 24 hours a day, seven days a week. Shareholders may revoke their proxies at the times and in the manners described in the “Notes” section of this Notice of Annual Meeting of Shareholders and the “General Information and Frequently Asked Questions About the Annual Meeting” section on pages 73-77 of this proxy statement.

If you are a shareholder of record or hold shares through a broker, bank or other nominee and are voting by proxy through the Internet, by telephone or by mail, your vote must be received by 11:59 p.m. (Eastern Time) on May 22, 2017 to be counted.

If you hold shares through Nielsen’s 401(k) plan, the plan trustee, Fidelity Management Trust Company, will vote according to the instructions received from you provided that your instructions are received by 11:59 p.m. Eastern Time on May 18, 2017. Your instructions cannot be changed or revoked after that time, and the shares you hold through the 401(k) plan cannot be voted at the Annual Meeting.

TO VOTE BY PROXY:

 

 

 

         LOGO   BY INTERNET

       

 

     LOGO   BY TELEPHONE

       

 

     LOGO   BY MAIL

      Go to the website www.proxyvote.com 24 hours a day, seven days a week (before the meeting) or nielsen.onlineshareholdermeeting
.com (during the meeting) and follow the instructions.

 

     You will need the 16-digit control number included on your Notice or proxy card in order to vote online.

 

     

     From a touch-tone phone, dial
1-800-690-6903 and follow the recorded instructions, 24 hours a day, seven days a week.

 

     You will need the 16-digit control number included on your proxy card in order to vote by telephone.

     

     Mark your selections on your proxy card (if you received one).

 

     Date and sign your name exactly as it appears on your proxy card.

 

     Mail the proxy card in the postage-paid envelope that will be provided to you.

YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.

April 6, 2017

By Order of the Board of Directors,

LOGO

Emily Epstein

Company Secretary

Registered Office: AC Nielsen House, London Road, Oxford, Oxfordshire OX3 9RX, United Kingdom

Registered in England and Wales No. 09422989

 

 

LOGO

  

2017 PROXY STATEMENT    NOT3

 


Table of Contents

 

 

LOGO

 

1    Proposal No. 1 Election of Directors
1    Ongoing Board Succession Planning
2    Director Nomination Process
4    Nominees for Election to the Board of Directors
9    The Board of Directors and Certain Governance Matters
9    Director Independence and Independence Determinations
10    Leadership Structure
10    Board Committees and Meetings
11    Committee Membership and Responsibilities
13    Board and Committee Evaluations
14    Our Board’s Commitment to Shareholder Engagement
15    Communications with Directors
15    Corporate Citizenship and Sustainability
17    Risk Oversight
18    Succession Planning
18    Executive Sessions
18    Committee Charters and Corporate Governance Guidelines
18    Code of Conduct and Procedures for Reporting Concerns about Misconduct
19    Executive Officers of the Company
21    Proposal No. 2 Ratification of Independent Registered Public Accounting Firm
21    Audit and Non-Audit Fees
22    Audit Committee Pre-Approval Policies and Procedures
22    Audit Committee Report
23    Proposal No. 3 Reappointment of UK Statutory Auditor
24    Proposal No. 4 Authorization of the Audit Committee to Determine UK Statutory Auditor Compensation
25    Proposal No. 5 Non-Binding, Advisory Vote on Executive Compensation
26    Executive Compensation
27    Compensation Discussion and Analysis
49    Compensation Committee Report
50    Tables and Narrative Disclosure
63    Proposal No.  6 Non-Binding, Advisory Vote on the Frequency of the Vote on Executive Compensation
64    Proposal No.  7 Non-Binding, Advisory Vote on Directors’ Compensation Report
65    Director Compensation
65    Director Compensation for the 2016 Fiscal Year
67    Equity Compensation Plan Information
68    Ownership of Securities
70    Section 16(a) Beneficial Ownership Reporting Compliance
70    Certain Relationships and Related Party Transactions
70    Review, Approval or Ratification of Certain Transactions with Related Persons
71    Shareholder Proposals for the 2018 Annual General Meeting of Shareholders
71    Householding of Proxy Materials
71    Annual Reports and Proxy Materials
72    Form 10-K
72    Other Business
73    General Information and Frequently Asked Questions About the Annual Meeting
77    Company Information and Mailing Address
77    Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on May 23, 2017
A-1    Annex A – Directors’ Compensation Report
B-1    Annex B – Directors’ Compensation Policy (abridged)
 

 

 

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2017 PROXY STATEMENT    TOC

 


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LOGO

Acting upon the recommendation of its Nomination and Corporate Governance Committee, our Board has nominated the persons identified herein for election or re-election as directors. Directors will hold office until the end of the next annual general meeting of shareholders and the election and qualification of their successors or until resignation. On February 16, 2017, Messrs. Calhoun and Ranadivé each notified the Company that they did not intend to stand for re-election at the Annual Meeting. On April 5, 2017, Ms. Marinello also informed the Company that she did not intend to stand for re-election at the Annual Meeting. Messrs. Calhoun and Ranadivé and Ms. Marinello’s decisions are not due to any disagreement with the Company. We thank Messrs. Calhoun and Ranadivé and Ms. Marinello for their valuable contributions and dedicated service to Nielsen and the Board.

It is intended that the proxies delivered pursuant to this solicitation will be voted in favor of the election or re-election of these nominees, except in cases of proxies bearing contrary instructions. In the event that these nominees should become unavailable for election or re-election due to any presently unforeseen reason, the persons named in the proxy will have the right to use their discretion to vote for a substitute.

 

 

ONGOING BOARD SUCCESSION PLANNING

Our Nomination and Corporate Governance Committee seeks to ensure that our Board as a whole possesses the objectivity and the mix of skills and experiences to provide effective oversight and guidance to management to execute on the Company’s long-term strategy. The Committee assesses potential candidates based on their history of achievement, the breadth of their experiences, whether they bring specific skills or expertise in areas that the Committee has identified, and whether they possess personal attributes that will contribute to the effective functioning of the Board.

Ongoing Board refreshment provides fresh perspectives while leveraging the institutional knowledge and historical perspective of our longer-tenured directors. The Committee also considers succession planning for roles such as Board and committee chairs for purposes of continuity and to maintain relevant expertise and depth of experience.

 

 

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2017 PROXY STATEMENT    1

 


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ELECTION OF DIRECTORS     

 

 

 

DIRECTOR NOMINATION PROCESS

Our Nomination and Corporate Governance Committee uses the following process to identify and add new directors to the Board:

 

LOGO

 

 

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2017 PROXY STATEMENT    2

 


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ELECTION OF DIRECTORS

 

Our Nomination and Corporate Governance Committee is authorized to use an independent search firm to help identify, evaluate and conduct due diligence on potential director candidates. Ms. Zalaznick and Mr. Rawlinson were identified through the use of a search firm. Using a search firm helps the Committee ensure that it is conducting a broad search and helps it to consider a diverse slate of candidates with the qualifications and expertise that are needed to provide effective oversight of management and assist in long-term value creation.

Diversity Policy

The charter of our Nomination and Corporate Governance Committee requires the Committee to consider age, gender, nationality and ethnic and racial background in nominating directors and to review and make recommendations, as the Committee deems appropriate, regarding the composition and size of the Board to ensure the Board has the requisite expertise and its membership consists of persons with sufficiently diverse and independent backgrounds. Over time, the Nomination and Corporate Governance Committee and the Board as a whole will assess the effectiveness of this policy and determine, how, if at all, our implementation of the policy, or the policy itself, should be changed.

Nomination Process

In considering whether to recommend re-nomination of each of our directors for election at the Annual Meeting, our Nomination and Corporate Governance Committee reviews the experience, qualifications, attributes and skills of our current directors to determine the extent to which those qualities continue to enable our Board to satisfy its oversight responsibilities effectively in light of our evolving business. The Committee focused on our current directors’ valuable contributions in recent years, the criteria set forth in “Board Expertise and Skills” and the information discussed in the biographies set forth under “Proposal No. 1 – Election of Directors – Nominees for Election to the Board of Directors”. In addition, the Committee considered each director’s additional responsibilities and affiliations and the extent to which they could continue to contribute to the success of our Board.

In accordance with our articles of association, shareholders may request that director nominees submitted by such shareholders be included in the agenda of our annual general meeting of shareholders through the process described under “Shareholder Proposals for the 2018 Annual General Meeting of Shareholders.” The Nomination and Corporate Governance Committee considers shareholder recommendations for director candidates and evaluates such candidates with the same standards as it does for other Board candidates. The Nomination and Corporate Governance Committee will advise the Board whether to recommend shareholders to vote for or against such shareholder nominated candidates.

 

 

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2017 PROXY STATEMENT    3

 


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ELECTION OF DIRECTORS

 

 

 

NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS

The following information describes the names, ages as of March 31, 2017 and biographical information of each nominee. Beneficial ownership of equity securities of the nominees is shown under “Ownership of Securities.”

 

                                            

 

  James A. Attwood, Jr.

 

 

Director since  2006

 

  

Age  58    

 

 

 

 

LOGO


Nielsen

Committees:

Nomination and

Corporate

Governance

 

 

Other public company directorships:

  
 

   Current:

    Syniverse Holdings, Inc., Getty

    Images, Inc. and CoreSite

    Realty Corporation

 

   Past 5 years:

    None

  
 

 

Key Experience and Qualifications

 

   Financial expertise (mathematics and statistics)

 

   Media/telecommunications expertise and deep management experience at The Carlyle Group

 

   Public company board experience

 

Mr. Attwood has served as Chairman of the Board since January 1, 2016 and served as Lead Independent Director of the Board from January 1, 2015 through December 31, 2015. Mr. Attwood is a Managing Director of The Carlyle Group and Head of the Global Telecommunications, Media, and Technology Group. Prior to joining The Carlyle Group in 2000, Mr. Attwood was with Verizon Communications, Inc. and GTE Corporation. Prior to GTE, he was with Goldman, Sachs & Co.

      

 

  Mitch Barns

 

 

Director since  2014

 

  

Age  53    

 

 

LOGO

 


Nielsen

Committees:

None

 

 

Other public company directorships:

  
 

   Current:

    Monsanto Company

 

   Past 5 years:

    None

  
 

 

Key Experience and Qualifications

 

   Deep knowledge and incomparable insight about Nielsen as its Chief Executive Officer

 

   Extensive global consumer goods and media experience

 

   Public company board experience

 

Mr. Barns has been the Chief Executive Officer (“CEO”) of Nielsen since January 1, 2014. His prior roles with Nielsen include President, Global Client Service from February 2013 through December 2013, President of Nielsen’s US Watch business from June 2011 until February 2013, President of Nielsen Greater China from January 2008 until June 2011, President of Nielsen’s Consumer Panel Services from March 2007 until January 2008 and President of Nielsen’s BASES and Analytic Consulting units from July 2004 through February 2007. He joined Nielsen in March 1997 after 12 years with The Procter & Gamble Company.

 

 

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2017 PROXY STATEMENT    4

 


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ELECTION OF DIRECTORS

 

                                            

 

  Karen M. Hoguet

 

 

Director since  2010

 

  

Age  60    

 

 

 

LOGO


Nielsen

Committees:

Audit, Chair

 

 

Other public company directorships:

  
 

   Current:

None

 

   Past 5 years:

The Chubb Corporation

  
 

 

Key Experience and Qualifications

 

   Financial expertise and financial reporting expertise

 

   Senior management and public company experience at Macy’s

 

   Retail and commercial experience and insight

 

Ms. Hoguet has been the Chief Financial Officer of Macy’s, Inc. since February 2009; she previously served as Executive Vice President and Chief Financial Officer of Macy’s from June 2005 to February 2009. Ms. Hoguet served as Senior Vice President and Chief Financial Officer of Macy’s from October 1997 to June 2005.

      

 

  James M. Kilts

 

 

Director since  2006

 

  

Age  69    

 

 

 

LOGO


Nielsen

Committees:

Nomination and

Corporate

Governance

 

 

Other public company directorships:

  
 

   Current:

    Metropolitan Life Insurance

    Company, Pfizer Inc., Unifi, Inc.

    and Conyers Park Acquisition

    Corp.

 

   Past 5 years:

    MeadWestvaco Corporation

  
 

 

Key Experience and Qualifications

 

   Chief Executive Officer and senior management experience at The Gillette Company, Nabisco Inc., Philip Morris, and others

 

   Consumer packaged goods experience

 

   Public company board experience

 

Mr. Kilts served as Chairman of the Board of Nielsen until January 1, 2014. Mr. Kilts is a founding partner of Centerview Capital. Prior to joining Centerview Capital, Mr. Kilts was Vice Chairman of the Board of The Procter & Gamble Company. Mr. Kilts was formerly Chairman of the Board, Chief Executive Officer and President of The Gillette Company before its merger with Procter & Gamble in October 2005. Prior to Gillette, Mr. Kilts had served at different times as President and Chief Executive Officer of Nabisco, Executive Vice President of the Worldwide Food Group of Philip Morris, President of Kraft USA and Oscar Mayer, President of Kraft Limited in Canada, and Senior Vice President of Kraft International. He is a member of the Board of Overseers of Weill Cornell Medicine and is a Director of the Cato Institute. Mr. Kilts serves on the Board of Trustees of the University of Chicago, is a Life Trustee of Knox College and is a Life Member of the Advisory Council of the University of Chicago Booth School of Business (of which he served as Chairman from 2002 through 2009).

 

 

LOGO

  

2017 PROXY STATEMENT    5

 


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ELECTION OF DIRECTORS

 

                                            

 

  Harish Manwani

 

 

Director since  2015

 

  

Age  63    

 

 

 

LOGO


Nielsen

Committees:

Compensation

 

 

Other public company directorships:

  
 

   Current:

    Qualcomm Incorporated,

    Pearson plc, Whirlpool

    Corporation and Hindustan

    Unilever Limited

 

   Past 5 years:

    None

  
 

 

Key Experience and Qualifications

 

   International and emerging markets operating experience at Unilever

 

   Consumer packaged goods experience

 

   Public company board experience

 

Mr. Manwani has been Global Executive Advisor for Blackstone Private Equity Group since February 2015. He retired from Unilever, a leading global consumer products company, at the end of 2014, where he served as Chief Operating Officer since September 2011. Mr. Manwani joined Hindustan Unilever Limited (a majority-owned subsidiary of Unilever) in 1976, becoming a member of its Board in 1995, and since that time held positions of increasing responsibility at Unilever, which gave him wide ranging international marketing and general management experience. Mr. Manwani is a director of the Economic Development Board of Singapore and the Indian School of Business.

      

 

  Robert Pozen

 

 

Director since  2010

 

  

Age  70    

 

 

 

LOGO


Nielsen

Committees:

Nomination and

Corporate

Governance,

Chair; Audit

 

 

Other public company directorships:

  
 

   Current:

    Medtronic Public Limited

    Company

 

   Past 5 years:

    None

  
 

 

Key Experience and Qualifications

 

   Governance and public policy expertise

 

   Financial and financial reporting expertise

 

   Public company board experience

 

From July 1, 2010 through December 31, 2011, Mr. Pozen was Chairman Emeritus of MFS Investment Management. Prior to that, he was Chairman of MFS Investment Management since February 2004. He previously was Secretary of Economic Affairs for the Commonwealth of Massachusetts in 2003. Mr. Pozen was also the John Olin Visiting Professor, Harvard Law School from 2002 to 2004 and the Chairman of the SEC Advisory Committee on Improvements to Financial Reporting from 2007 to 2008. From 1987 through 2001, Mr. Pozen worked for Fidelity Investments in various jobs, serving as President of Fidelity Management and Research Co. from 1997 through 2001. He is currently a director of AMC, a subsidiary of the International Finance Corporation, a senior lecturer at MIT Sloan School of Management, a senior fellow of the Brookings Institution, a member of the Advisory Board of Perella Weinberg Partners and Chairman of the Leadership Council of the Tax Policy Committee.

 

 

LOGO

  

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Table of Contents

 

ELECTION OF DIRECTORS

 

                                            

 

  David Rawlinson

 

 

Director since  2017

 

  

Age  41    

 

 

 

LOGO


Nielsen

Committees:

Audit

 

 

Other public company directorships:

  
 

   Current:

    MonotaRO Co., Ltd.

 

   Past 5 years:

    None

  
 

 

Key Experience and Qualifications

 

   Digital, innovation and technology experience

 

   E-commerce commercial, brand and marketing experience

 

   Global operating experience

 

Mr. Rawlinson is the President of the Online Business of W.W. Grainger, Inc. (“Grainger”), where he also previously served as the Vice President for Operations for the Online Business. Previously, from July 2012 until August 2015, he was Grainger’s Vice President, Deputy General Counsel and Corporate Secretary. From November 2009 until July 2012, Mr. Rawlinson was Vice President, General Counsel and Director of Corporate Responsibility of a division of ITT Exelis (“ITT”), formerly ITT Corporation. Prior to ITT, Mr. Rawlinson served as a White House Fellow and in appointed positions for the George W. Bush and Obama Administrations. In the Bush Administration, he was a leader of the outgoing transition. In the Obama Administration, he served as Senior Advisor for Economic Policy at the White House National Economic Council.

      

 

  Javier G. Teruel

 

 

Director since  2010

 

  

Age  66    

 

 

 

LOGO


Nielsen

Committees:

Audit

 

 

Other public company directorships:

  
 

   Current:

    Starbucks Corporation,

    J.C. Penney Company, Inc.

 

   Past 5 years:

    None

  
 

 

Key Experience and Qualifications

 

   Consumer packaged goods experience

 

   Global operating experience, including as Vice Chairman of Colgate-Palmolive Company

 

   Public company board experience

 

Mr. Teruel is a Partner of Spectron Desarrollo, SC, an investment management and consulting firm; Chairman of Alta Growth Capital, a private equity firm; and a majority owner of Mexican investment firm, Desarrolo Empressarial Seborn, SA de CV. Previously, Mr. Teruel served as Vice Chairman of Colgate-Palmolive Company, from July 2004 to April 2007. Prior to being appointed Vice Chairman, he served in positions of increasing importance at Colgate since 1971, including as Executive Vice President responsible for Asia, Central Europe, Africa and Hill’s Pet Nutrition, as Vice President of Body Care in Global Business Development in New York, as President and General Manager of Colgate-Mexico, as President of Colgate-Europe, and as Chief Growth Officer responsible for the company’s growth functions.

 

 

LOGO

  

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ELECTION OF DIRECTORS

 

                                            

 

  Lauren Zalaznick

 

 

Director since  2016

 

  

Age  54    

 

 

 

LOGO


Nielsen

Committees:

Compensation

 

 

Other public company directorships:

  
 

   Current:

    GoPro, Inc.

 

   Past 5 years:

    None

  
 

 

Key Experience and Qualifications

 

   Media expertise, including at NBCUniversal

 

   Digital, innovation and technology experience

 

   Commercial and management expertise

 

From 2004 through December 2013, Ms. Zalaznick held various roles of increasing responsibility within NBCUniversal. From December 2010 until February 2013, she was the Chairman, Entertainment & Digital Networks and Integrated Media where she had responsibility for the Bravo, Oxygen, Style, Telemundo and Mun2 networks and ran its digital portfolio. Most recently, she was Executive Vice President at NBCUniversal until departing the company in December 2013. Ms. Zalaznick is currently a member of the boards of directors of Shazam Entertainment and Penguin Random House. She is a senior advisor to various content and tech start-ups including Refinery29, Atlas Obscura and Medium.com.

The nominees for election to the Board of Directors named above are hereby proposed for reappointment by the shareholders.

 

LOGO    The Board of Directors recommends that shareholders vote “FOR” the election of each of the nominees named above.

 

 

LOGO

  

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LOGO

Pursuant to our articles of association and in accordance with the UK Companies Act 2006, our directors are responsible for the management of the Company’s business, for which purpose they may exercise all the powers of the Company.

Our Board conducts its business through meetings of the Board and three standing committees: Audit, Compensation and Nomination and Corporate Governance. In accordance with the New York Stock Exchange (“NYSE”) rules, a majority of our Board consists of independent directors, and our Audit, Compensation and Nomination and Corporate Governance Committees are fully independent.

Each director owes a duty to the Company to properly perform the duties assigned to him or her and to act in the best interest of the Company. Under English law, this requires each director to act in a way he or she considers, in good faith, would be most likely to promote the success of the Company for the benefit of its shareholders as a whole, and in doing so have regard (among other matters) for the likely consequences of any decision in the long-term, the interests of the Company’s employees, the Company’s business relationships with suppliers, customers and others, the impact of the Company’s operations on the community and the environment and the need to act fairly amongst shareholders. The Company’s directors are expected to be appointed for one year and will be re-electable each year at the annual general meeting of shareholders.

 

 

DIRECTOR INDEPENDENCE AND INDEPENDENCE DETERMINATIONS

Under the NYSE rules and our Corporate Governance Guidelines, a director is not independent unless the Board affirmatively determines that he or she does not have a direct or indirect material relationship with the Company or any of its subsidiaries. Heightened independence standards apply to members of the Audit Committee and Compensation Committee.

The NYSE independence definition includes a series of objective tests, such as that the director is not an employee of the Company and has not engaged in various types of business dealings with the Company. The Board is also responsible for determining affirmatively, as to each independent director, that no relationships exist which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, the Board will broadly consider all relevant facts and circumstances, including information provided by the directors and the Company with regard to each director’s business and personal activities as they may relate to the Company and the Company’s management. As the concern is independence from management, the Board does not view ownership of even a significant amount of stock, by itself, as a bar to an independence finding.

The categorical standards set forth in our Corporate Governance Guidelines are intended to assist the Board in determining whether or not certain relationships between our directors and us, either directly or as a partner, shareholder or officer of an organization that has a relationship with us, are “material relationships” for purposes of the NYSE independence standards. The categorical standards establish thresholds at which such relationships are deemed to be material.

The Board undertook its annual review of director independence and affirmatively determined that, except for Mr. Barns, each of our directors is independent under Section 303A.02 of the NYSE listing rules and under our Corporate Governance Guidelines for purposes of board service. In addition, the Board affirmatively determined that the Audit Committee, the Compensation Committee, and the Nomination and Corporate Governance Committee members are fully independent under the SEC and NYSE independence standards specifically applicable to such committees.

 

 

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THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS

 

In making the director independence determinations, the Board considered the following facts:

 

   

Mr. Teruel indirectly holds approximately 6% of the capital stock of, and until July 2015 served as a director of, a

private entity in which Nielsen invested $3.25 million, which represents approximately 15.6% of such entity’s capital stock. Nielsen has a board seat on, and a commercial arrangement with, this entity.

 

   

In 2016, Nielsen sold assets to a private entity controlled by a fund managed by The Carlyle Group, of which Mr. Attwood is a Managing Director. Mr. Attwood holds an indirect ownership interest in this entity having a value of less than $120,000. The purchase price to Nielsen from this sale of assets represents less than the greater of $1.0 million or 2% of Nielsen’s gross revenues in 2016. Neither this entity nor the fund is consolidated in the financial statements of The Carlyle Group.

 

   

Nielsen has an arrangement with the University of Chicago pursuant to which we license the use of certain of our market research data to the school for the purpose of academic research. Mr. Kilts is a member of the Board of Trustees of the University of Chicago. For 2016, the value of the market research data provided to the University of Chicago represented substantially less than 1% of either entity’s consolidated gross revenues.

 

 

LEADERSHIP STRUCTURE

Under our Corporate Governance Guidelines, the Board must select its chairperson from its members in any way it considers in the best interest of the Company. Effective January 1, 2016, Mr. Attwood, formerly the Board’s Lead Independent Director, began serving as the Board’s non-executive, independent Chairman (replacing Mr. Calhoun as Chairman who continued to serve as a Board member). In light of Mr. Attwood’s independence from the Company and his appointment as Chairman, the Company does not currently have a Lead Independent Director. As noted further below, each Board committee also has a non-executive, independent chairperson. Our Board believes our leadership structure best encourages the free and open dialogue of competing views and provides for strong checks and balances.

 

 

BOARD COMMITTEES AND MEETINGS

Our Board has established the following committees: an Audit Committee, a Compensation Committee and a Nomination and Corporate Governance Committee. The current composition and responsibilities of each committee are described below. Members serve on these committees until their resignation or until otherwise determined by our Board.

 

Name of Independent Director    Audit Committee    Compensation Committee    Nomination and Corporate
Governance Committee
James A. Attwood, Jr.             
David Calhoun1             
Karen M. Hoguet                Chair          
James M. Kilts             
Harish Manwani             
Kathryn V. Marinello1                     Chair     
Robert Pozen                        Chair
Vivek Ranadivé1             
David Rawlinson             
Javier G. Teruel             
Lauren Zalaznick             

 

1   Messrs. Calhoun and Ranadivé and Ms. Marinello will not stand for re-election at the Annual Meeting.

 

 

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THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS

 

Pursuant to our Corporate Governance Guidelines, all directors are expected to make every effort to attend all meetings of the Board and meetings of the committees of which they are members. All directors are also welcome to attend meetings and review materials of those committees of which they are not members. During 2016, the Board held six meetings. Each director attended 90% or more of the total number of 2016 meetings of the Board and of the committees on which each such director served and that were held during the period that such director served. All non-executive directors are encouraged (but not required) to attend the annual general meeting and each extraordinary general meeting of shareholders. Seven of our directors attended the annual general meeting held in 2016.

 

 

COMMITTEE MEMBERSHIP AND RESPONSIBILITIES

 

              
    

 

Members:

 Karen M. Hoguet (Chair)

 Robert Pozen

 David Rawlinson

 Javier G. Teruel

 

Independence:

All members are independent.

 

Audit Committee Financial Expert:

All members qualify as “audit committee financial experts” and meet NYSE financial literacy and expertise requirements.

 

Meetings in Fiscal Year 2016:

8

   

 

Audit Committee

 

Key Responsibilities:

 

   External auditor. Appointing our external auditors, subject to shareholder vote as may be required under English law, overseeing the external auditor’s qualifications, independence and performance, discussing relevant matters with the external auditor and providing preapproval of audit and permitted non-audit services to be provided by the external auditor and related fees;

 

   Financial reporting. Supervising and monitoring our financial reporting and reviewing with management and the external auditor Nielsen’s annual and quarterly financial statements;

 

    Internal audit function. Overseeing our internal audit process and our internal audit function; and

 

    Internal controls, risk management and compliance programs. Overseeing our system of internal controls, our enterprise risk management program and our compliance with relevant legislation and regulations.

              

 

 

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THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS

 

 

              
    

 

Members:

    Harish Manwani

    Kathryn Marinello (Chair) (will not stand for re-election)

    Vivek Ranadivé (will not stand for re-election)

    Lauren Zalaznick

 

Independence:

All members are independent.

 

Meetings in Fiscal Year 2016:

7

   

 

Compensation Committee

 

Key Responsibilities:

 

  Executive compensation. Setting, reviewing and evaluating compensation, and related performance and objectives, of our senior management team;

 

  Incentive and equity-based compensation plans. Reviewing and approving, or making recommendations to our Board with respect to, our incentive and equity-based compensation plans and equity-based awards;

 

  Compensation-related disclosure. Overseeing compliance with our compensation-related disclosure obligations under applicable laws; and

 

  Director compensation. Assisting our Board in deciding on the individual compensation applicable to our directors within the framework permitted by the general compensation policy approved by our shareholders.

 

Compensation Committee Interlocks and Insider Participation: None of the current members of the Compensation Committee is a former or current officer or employee of the Company or any of its subsidiaries. None of them has any relationship required to be disclosed under this caption under the rules of the SEC.

              

 

              
    

 

Members

    James A. Atwood, Jr.

    David Calhoun (will not stand for re-election)

    James M. Kitts

    Robert Pozen (Chair)

 

Independence:

All members are independent.

 

Meetings in Fiscal Year 2016:

5

   

 

Nomination and Corporate

Governance Committee

 

Key Responsibilities:

 

  Director nomination. Determining selection criteria and appointment procedures for our Board and committee members and making recommendations regarding nominations and committee appointments to the full Board;

 

  Board composition. Periodically assessing the scope and composition of our Board and its committees;

 

  Succession planning. Developing and overseeing succession planning and talent management for CEO and other senior leadership positions;

 

  Corporate governance. Advising the Board on corporate governance matters and overseeing the Company’s corporate citizenship and sustainability strategy; and

 

  Board and Committee evaluations. Overseeing the evaluation process for our Board and its committees.

              

 

 

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THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS

 

 

 

BOARD AND COMMITTEE EVALUATIONS

Our Board recognizes that a thorough, constructive evaluation process enhances our Board’s effectiveness and is an essential element of good corporate governance. Accordingly, every year, our Nomination and Corporate Governance Committee oversees the evaluation process to ensure that the full Board and each committee conduct an assessment of their performance and functioning and solicit feedback for enhancement and improvement.

 

LOGO

 

LOGO

 

5   

 

Actions

 

As an outcome of these discussions, the Board Chairman and each committee chairperson suggest changes for areas of improvement. Examples of changes made in response to the evaluation process include:

 

   Board refreshment, including adding directors with media and technology experience and increasing the Board’s diversity;

 

   Enhancement of the Board’s strategic planning process by establishing a separate Board meeting devoted to strategic matters; and

 

   Increased Board exposure both formally and informally to key executives and possible successor candidates.

 

 

 

LOGO

  

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THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS     

 

 

 

OUR BOARD’S COMMITMENT TO SHAREHOLDER ENGAGEMENT

Why We Engage

Our Board and management team recognize the benefits of regular engagement with our shareholders in order to remain attuned to their different perspectives on the matters affecting Nielsen.

Robust dialogue and engagement efforts allow our Board and management the opportunity to:

 

    consider the viewpoints of our shareholders in connection with their oversight of management and the Company;

 

    discuss developments in our business and provide transparency and insight about our strategy and performance; and

 

    assess issues that may affect our business, corporate responsibility and governance practices.

How We Engage

 

LOGO     

 

Outcomes from Investor Feedback

 

Some tangible examples of the results of our shareholder outreach activities include:

 

   Increased our financial disclosures to help investors better understand our business.

 

   Included a broader array of senior management and members of our Board in our engagement efforts.

 

   Enhanced our proxy statement disclosures to provide more detail about the assessments that factor into pay decisions for our Named Executive Officers.

 

   Imposed a cap on payouts under our Long-Term Performance Plan (“LTPP”) if the Company’s total shareholder return is negative over the applicable performance period.

 

 

 

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THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS     

 

 

COMMUNICATIONS WITH DIRECTORS

Any interested party who would like to communicate with, or otherwise make his or her concerns known directly to, the Chairman of the Board or the Chairperson of any of the Audit Committee, Nomination and Corporate Governance Committee and Compensation Committee or to other directors, including the non-management or independent directors, individually or as a group, may do so by addressing such communications or concerns to the Company Secretary, 40 Danbury Road, Wilton, Connecticut 06897. Such communications may be done confidentially or anonymously. The Company Secretary will forward communications received to the appropriate party. Additional contact information is available on our website, www.nielsen.com/investors, under Contact Us.

 

 

CORPORATE CITIZENSHIP AND SUSTAINABILITY

Nielsen is committed to strengthening the communities and markets in which we live and operate our business, recognizing how important this is to a sustainable future. The Nomination and Corporate Governance Committee oversees the Company’s strategy and initiatives to evaluate and measure our performance with respect to the advancement of environmental, social, and governance (“ESG”) issues. Highlights of our work in 2016 include:

Global Responsibility & Sustainability Strategy and Reporting:

 

   

We connect our business with relevant ESG issues through responsible policies and practices, evaluating and measuring performance on these issues, and external reporting and transparency.

 

   

During 2016, we published the first Nielsen Global Responsibility Report (http://sites.nielsen.com/globalresponsibilityreport/, which is not incorporated herein by reference), aligned with the Global Reporting Initiative G4.

Environmental and Supply Chain Sustainability:

 

   

We manage our impact on the environment through Nielsen Green, our employee engagement program. In 2016, more than 26,000 employees participated in Earth Week activities.

 

   

As part of our commitment to corporate leadership in supply chain sustainability, Nielsen joined the Sustainable Purchasing Leadership Council and the Electronic Industry Citizenship Coalition; is a founding member of the Global Impact Sourcing Coalition; and participated in the Technical Advisory Group for ISO 20400, a new ISO Sustainable Procurement Standard.

Nielsen Cares:

 

   

Our employees share skills, time, data, and insights through our volunteering and our in-kind giving programs.

 

   

In 2016 we had record participation of more than 23,000 employees on Nielsen Global Impact Day through 1,400 volunteer events for 900 nonprofits in 92 countries.

 

   

Nielsen donated a record $11.8 million of data, products and services in 2016, surpassing our $10 million annual commitment goal of pro-bono work and skills-based volunteering.

 

 

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THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS     

 

Data for Good:

 

   

We are committed to enhancing use of data in the social and civic sectors to increase impact through Data for Good initiatives such as Project 8, the data platform for forecasting development needs, and the UN Young Leaders for the Sustainable Development Goals.

 

   

We license the use of certain of our market research data to the University of Chicago. Through this arrangement, eligible academic researchers can apply to access a warehouse of Nielsen data to advance their academic and social research.

Diversity and Inclusion:

 

   

We launched an internal Global Inclusion Council with leaders committed to championing diversity and inclusion efforts across the business.

 

   

Nielsen was included on Fortune’s lists of “50 Best Workplaces for Diversity” and “100 Best Workplaces for Millennials,” and on DiversityInc.’s “Top 50 Companies for Diversity.”

 

 

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THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS

 

 

 

RISK OVERSIGHT

The Board is responsible for overseeing Nielsen’s risk and enterprise risk management practices and seeks to foster a risk-aware culture while encouraging appropriate and balanced risk-taking in pursuit of Company objectives. The Board exercises its oversight both directly and through its three committees, each of which has been delegated oversight responsibilities for specific risks. Each committee keeps the Board informed of its oversight efforts through regular reporting to the full Board by the committee chairs.

Management is accountable for day-to-day risk management efforts. The Board and committees’ risk oversight and management’s ownership of risk are foundational components of our Enterprise Risk Management program. This program is designed to provide comprehensive, integrated oversight and management of risk and to facilitate transparent identification and reporting of key business issues to senior management and the Board and its committees. The following are the key risk oversight and management responsibilities of our Board, committees and management:

 

LOGO

 

 

LOGO

  

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THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS

 

 

 

SUCCESSION PLANNING

One of the Board’s primary responsibilities is to ensure that Nielsen has the appropriate talent to accomplish our business strategies today and in the future. The Board plans for CEO succession by establishing selection criteria and identifying and evaluating potential internal candidates. This is accomplished by creating opportunities for the Board to meet with members of senior management, both formally and informally, to assess their qualifications and attributes as well as by engaging in discussion about potential successor candidates during executive session. The Board regularly discusses succession planning with the CEO and discusses development plans for potential successors. The Board annually conducts a detailed review of the Company’s talent management processes, strategies, retention efforts and pipeline for other leadership positions. The Board has also developed an emergency CEO succession plan.

 

 

EXECUTIVE SESSIONS

Pursuant to our Corporate Governance Guidelines, to ensure free and open discussion and communication, our independent directors meet in executive session, with no members of management present, at every regularly scheduled Board meeting. Our Chairman leads these meetings which enable our independent directors to discuss matters such as strategy, CEO and senior management performance and compensation, succession planning and board composition and effectiveness. During 2016, our non-management directors met five times in executive session and, in addition, the independent directors met twice.

 

 

COMMITTEE CHARTERS AND CORPORATE GOVERNANCE GUIDELINES

Our commitment to corporate governance is reflected in our Corporate Governance Guidelines, which describe the Board’s views on a wide range of governance topics. These Corporate Governance Guidelines are reviewed from time to time by the Board to ensure that they effectively comply with all applicable laws, regulations and stock exchange requirements, in addition to our articles of association. Additionally, the Board has adopted a written charter for each of the Audit Committee, the Compensation Committee and the Nomination and Corporate Governance Committee. Our Corporate Governance Guidelines, our committee charters and other corporate governance information are available on our website at www.nielsen.com/investors under Governance Documents.

 

 

CODE OF CONDUCT AND PROCEDURES FOR REPORTING CONCERNS ABOUT MISCONDUCT

We maintain a Code of Conduct and Procedures for Reporting Concerns about Misconduct (the “Code of Conduct”), which is applicable to all of our directors, officers and employees. The Code of Conduct sets forth our policies and expectations on a number of topics, including conflicts of interest, compliance with laws and ethical conduct. The Company will promptly disclose to our shareholders, if required by applicable laws, any amendments to, or waivers from the Code of Conduct applicable to our officers by posting such information on our website at www.nielsen.com/investors rather than by filing a Current Report on Form 8-K.

The Code of Conduct may be found on our website at www.nielsen.com/investors under Governance Documents.

 

 

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THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS

 

 

 

EXECUTIVE OFFICERS OF THE COMPANY

Set forth below is the name, age as of March 31, 2017 and biographical information of each of our current executive officers, other than Mr. Barns, whose information is presented under “Proposal No. 1 – Election of Directors – Nominees for Election to the Board of Directors.”

 

                             

 

  Jeffrey R. Charlton

 

  

Age  55     

 

 

LOGO

 

Senior Vice President and Corporate Controller (since June 2009)

 

Previous Nielsen Business Experience:

 

Before June 2009, Mr. Charlton served as Nielsen’s Senior Vice President of Corporate Audit since joining the Company in November 2007.

 

Previous Business Experience:

 

Prior to joining Nielsen, Mr. Charlton spent 11 years at General Electric Company in senior financial management positions, including Senior Vice President Corporate Finance and Controller of NBCUniversal. Prior to joining GE, Mr. Charlton was employed by PepsiCo and began his career in 1983 with the public accounting firm of KPMG.

    

 

  Eric J. Dale

 

  

Age  52     

 

 

LOGO

 

Chief Legal Officer (since August 2015)

 

Previous Business Experience:

 

Prior to joining Nielsen, Mr. Dale served for 13 years as a Partner at the law firm of Robinson & Cole LLP, where he chaired the firm’s Business Transactions Practice Group.

 

Public Company Directorship:

 

Mr. Dale is on the Board of Directors of Bankwell Financial Group, Inc. where he serves as the Chairperson of its Nominating and Governance Committee and as a member of its Audit, Asset Liability and Strategic Planning Committees.

    

 

  Steve Hasker

 

  

Age  47     

 

 

LOGO

 

 

Global President and Chief Operating Officer (since January 2016)

 

Previous Nielsen Business Experience:

 

Before 2016, Mr. Hasker was Global President of Nielsen from August through December 2015 and President, Global Product Leadership of Nielsen from February 2013 through August 2014. Mr. Hasker joined Nielsen in November 2009 and served as President, Global Media Products and Advertiser Solutions until February 2013 where he led Nielsen’s TV and digital audience measurement, advertising effectiveness and social media solutions.

 

Previous Business Experience:

 

Mr. Hasker was at McKinsey & Company from July 1998 through October 2009, and served as a partner of the firm in the Global Media, Entertainment and Information practice. Prior to McKinsey, Mr. Hasker spent five years in several financial roles in the U.S., Russia and Australia.

 

Public Company Directorship:

 

Mr. Hasker is on the Board of Directors of Global Eagle Entertainment, Inc.

 

 

 

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THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS

 

 

                             

 

  Jamere Jackson

 

  

Age  48     

 

 

LOGO

 

 

Chief Financial Officer (since March 2014)

 

Previous Business Experience:

 

Prior to joining Nielsen, Mr. Jackson was the Vice President & Chief Financial Officer of GE Oil & Gas – Drilling & Surface. He joined General Electric Company in 2004 and held a variety of leadership roles in GE Corporate and GE Aviation before joining GE Oil & Gas. In 2013, he was named a GE Vice President and Company Officer. Prior to joining GE, Mr. Jackson held several roles in finance, mergers and acquisitions and strategic planning at The Procter & Gamble Company, Yum! Brands, Inc., First Data Corporation and Total System Services.

 

Public Company Directorship:

 

Mr. Jackson is on the Board of Directors of Eli Lilly and Company where he serves as a member of its Audit and Finance Committees.

 

    

 

  Nancy Phillips

 

  

Age  49     

 

 

LOGO

 

Chief Human Resources Officer (since January 2017)

 

Previous Business Experience:

 

Prior to joining Nielsen, Ms. Phillips was Executive Vice President of Human Resources at Broadcom Corporation from September 2014 until February 2016. Previously, from February 2010 to June 2014, Ms. Phillips held various human resources positions at Hewlett-Packard Company, most recently as Senior Vice President, Human Resources, Enterprise Services. Prior to joining Hewlett-Packard Company, from April 2008 to February 2010, Ms. Phillips was employed by Fifth Third Bancorp as Executive Vice President and Chief Human Resources Officer. Prior to that, Ms. Phillips spent 11 years at General Electric Company, holding various human resources and legal positions.

 

    

 

  James Powell

 

  

Age  55     

 

 

LOGO

 

Chief Technology Officer (since July 2015)

 

Previous Business Experience:

 

Prior to joining Nielsen, Mr. Powell was Executive Vice President and Chief Technology Officer of Thomson Reuters Corporation from 2008 through June 2015 and, prior to that, he was Chief Technology Officer of various divisions of Thomson Reuters since 2007.

 

Public Company Directorships:

 

Mr. Powell is on the Board of Directors of TalkTalk Telecom Group plc.

    

 

  Giovanni Tavolieri

 

  

Age  48     

 

 

LOGO

 

Global President, Operations (since January 2016)

 

Previous Nielsen Business Experience:

 

Prior to his current role, Mr. Tavolieri was in various leadership roles of increasing responsibility at Nielsen since April 2007, including, most recently, Executive Vice President, Operations.

 

 

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LOGO

The Audit Committee has selected Ernst & Young LLP to serve as our independent registered public accounting firm for the year ending December 31, 2017.

Although ratification of the selection of Ernst & Young LLP is not required by U.S. federal laws, the Board is submitting the selection of Ernst & Young LLP to our shareholders for ratification because we value our shareholders’ views on the Company’s independent registered public accounting firm. If our shareholders fail to ratify the selection, it will be considered as notice to the Board and the Audit Committee to consider the selection of a different firm. Even if the selection is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interest of the Company and our shareholders.

A representative of Ernst & Young LLP is expected to be present at the Annual Meeting to answer appropriate questions and will have the opportunity to make a statement if he or she desires to do so.

 

 

AUDIT AND NON-AUDIT FEES

In connection with the audit of the Company’s annual financial statements for the year ended December 31, 2016, we entered into an agreement with Ernst & Young LLP which sets forth the terms by which Ernst & Young LLP performed audit services for the Company.

The following table presents fees for professional services rendered by Ernst & Young LLP and its affiliates for the audit of our financial statements for the years ended December 31, 2016 and 2015 and for other services rendered by them in those years:

 

       Year Ended December 31,  
        2016        2015  
Audit fees1      $ 8,311,500        $ 8,759,000  
Audit-related fees2        317,000          254,000  
Tax fees3        280,793          421,000  
All other fees4        9,000          358,000  
Total      $ 8,918,293        $ 9,792,000  

 

1   Fees for audit services billed or expected to be billed in relation to the years ended December 31, 2016 and 2015 consisted of the following: audit of the Company’s annual financial statements, reviews of the Company’s quarterly financial statements, statutory and regulatory audits and filings with the SEC relating to equity and debt offerings.

 

2   Fees for audit-related services in the years ended December 31, 2016 and 2015 included fees related to the audits of employee benefit plans and accounting consultations.

 

3   Fees for tax services billed in the years ended December 31, 2016 and 2015 consisted of tax compliance and tax planning and advice.

 

4   All other fees in the years ended December 31, 2016 and 2015 included specified transaction fees and certain other fees.

The Audit Committee considered whether providing the non-audit services shown in this table was compatible with maintaining Ernst & Young LLP’s independence and concluded that it was.

 

 

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RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES

Subject to shareholder approval as may be required under the laws of England and Wales, the Audit Committee is directly responsible for the appointment and termination of the independent registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company. Each year the Committee reviews the qualifications, performance and independence of our independent registered public accounting firm in accordance with regulatory requirements and guidelines. During 2016, in connection with the mandated rotation of the accounting firm’s lead engagement partner, the Committee was directly involved in the selection of the firm’s new lead engagement partner.

In addition, and also subject to shareholder approval as may be required under the laws of England and Wales, the Audit Committee is responsible for the compensation, retention and oversight of its independent registered public accounting firm, including the resolution of disagreements between management and such firm regarding financial reporting. In exercising this responsibility, the Audit Committee pre-approves all audit and permitted non-audit services provided by such firm, except that pre-approval is not necessary for minor non-audit services if: (i) the aggregate amount of all such non-audit services provided to the Company constitutes not more than 5% of the total amount of revenues paid by the Company to its auditor during the year in which the non-audit services are provided; (ii) such services were not recognized by the Company at the time of the engagement to be non-audit services; and (iii) such services are promptly brought to the attention of the Committee and approved prior to the completion of the audit by the Committee or by one or more members of the Committee who are members of the Board of Directors to whom authority to grant such approvals has been delegated by the Committee. All of the services covered under “– Audit and Non-Audit Fees” were pre-approved by the Audit Committee.

The Audit Committee may form and delegate to subcommittees consisting of one or more of its members, when appropriate, the authority to pre-approve services to be provided by the independent auditors so long as the pre-approvals are presented to the full Audit Committee at its next scheduled meeting.

 

LOGO   The Board of Directors recommends that shareholders vote “FOR” the ratification of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2017.

 

 

AUDIT COMMITTEE REPORT

The Audit Committee operates pursuant to a charter which is reviewed annually by the Audit Committee. Additionally, a brief description of the primary responsibilities of the Audit Committee is included in this proxy statement under “The Board of Directors and Certain Governance Matters – Committee Membership and Responsibilities – Audit Committee.”

In the performance of its oversight function, the Audit Committee reviewed and discussed the audited financial statements of the Company with management and with the independent registered public accounting firm. The Audit Committee also discussed with the independent registered public accounting firm the matters required to be discussed by applicable Public Company Accounting Oversight Board (“PCAOB”) standards. In addition, the Audit Committee received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and discussed with the independent registered public accounting firm their independence.

Based upon the review and discussions described in the preceding paragraph, the Audit Committee recommended to the Board that the audited financial statements of the Company be included in the Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission.

Submitted by the Audit Committee of the Company’s Board of Directors:

Karen M. Hoguet (Chair)

Robert Pozen

David Rawlinson

Javier G. Teruel

 

 

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The Audit Committee has selected Ernst & Young LLP to serve as the Company’s UK statutory auditor who will audit the Company’s UK Annual Report and Accounts to be prepared in accordance with the International Financial Reporting Standards, as adopted by the European Union (“IFRS”), for the year ending December 31, 2017. As required by UK law, shareholder approval must be obtained for the selection of Ernst & Young LLP to serve as the Company’s UK statutory auditor and to hold office from the completion of the Annual Meeting until the end of the next general meeting of shareholders at which the Company’s UK statutory accounts will be presented.

Representatives of Ernst & Young LLP will attend the Annual Meeting to answer appropriate questions for the year ended December 31, 2016. They will also have the opportunity to address the Annual Meeting if they desire to do so.

The affirmative vote of a majority of the votes cast at the Annual Meeting is required to pass this resolution to reappoint Ernst & Young LLP as the Company’s UK statutory auditor until the next annual general meeting of shareholders.

 

LOGO   The Board of Directors recommends that the shareholders vote “FOR” the reappointment of Ernst & Young LLP as the Company’s UK statutory auditor who will audit the Company’s UK Annual Report and Accounts for the year ending December 31, 2017.

 

 

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LOGO

As required under UK law, the compensation of Ernst & Young LLP as the Company’s UK statutory auditors must be fixed by the shareholders or in such manner as the shareholders may determine. Subject to Ernst & Young LLP being reappointed as the Company’s UK statutory auditors pursuant to Proposal No. 3, it is therefore proposed that the Audit Committee be authorized to determine their compensation. Pursuant to Nielsen’s Audit Committee Charter, the Board has delegated this authority to the Audit Committee.

The affirmative vote of a majority of the votes cast at the Annual Meeting is required to approve this proposal.

 

LOGO    The Board of Directors recommends that the shareholders vote “FOR” the authorization of the Audit Committee to determine the compensation of Ernst & Young LLP in its capacity as the Company’s UK statutory auditors.

 

 

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LOGO

In accordance with the requirements of Section 14A of the Exchange Act (which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act) and the related rules of the SEC, at the 2011 annual general meeting of shareholders, we submitted to our shareholders a non-binding, advisory vote on executive compensation, as well as a non-binding, advisory vote on the frequency with which shareholders believed we should submit the non-binding, advisory vote on executive compensation. A majority of the shareholders voted that the non-binding, advisory vote on executive compensation should occur every three years. However, the Board subsequently decided to propose at each annual general meeting of shareholders the approval of the compensation of our named executive officers. We are including in the proxy materials a separate resolution regarding the compensation of our named executive officers as disclosed pursuant to the SEC rules. While the results of this vote are non-binding and advisory in nature, the Board intends to carefully consider them.

The language of the resolution is as follows:

“RESOLVED, THAT THE COMPENSATION PAID TO THE COMPANY’S NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THE PROXY STATEMENT PURSUANT TO THE SEC RULES, INCLUDING THE COMPENSATION DISCUSSION AND ANALYSIS, COMPENSATION TABLES AND ANY RELATED NARRATIVE DISCUSSION, IS HEREBY APPROVED.”

In considering their vote, shareholders may wish to review with care the information on the Company’s compensation policies and decisions regarding the named executive officers presented in “Executive Compensation – Compensation Discussion and Analysis.”

In particular, as discussed in “Executive Compensation – Compensation Discussion and Analysis,” shareholders should note the following:

 

   

Our executive compensation program is designed to incent and reward our leadership team for delivering sustained financial performance and long-term shareholder value.

 

   

A substantial portion of compensation for our senior executives is “at risk” by being subject to performance. The “at risk” component consists of annual cash incentives and long-term equity incentives, which play a significant role in aligning management’s interests with those of our shareholders.

 

   

Annual cash incentives for our senior executives are determined by a formula which provides initial payouts on the basis of our EBITDA growth over the prior year relative to plan objectives (as described under “Executive Compensation”), with consideration given to our cash flow performance. Final awards may then be adjusted based on individual performance against objectives and defined qualitative factors such as degree of difficulty and leadership impact.

 

   

A significant portion of the equity incentives for our senior executives are subject to long-term quantitative targets which provide a powerful incentive for executives to focus on long-term performance and shareholder return.

 

 

LOGO   The Board of Directors recommends that shareholders vote “FOR” approval of the compensation of the Company’s named executive officers.

 

 

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LOGO

 

 

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EXECUTIVE COMPENSATION     

 

 

COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

Executive Changes

Effective January 1, 2016, Mr. Hasker was appointed Global President and Chief Operating Officer with responsibility for global client service and product leadership across our Watch and Buy businesses.

Mr. Powell was appointed Chief Technology Officer on July 6, 2015.

Mr. Dale was appointed Chief Legal Officer on August 1, 2015.

Business Overview

Nielsen is a global performance management company that provides a comprehensive understanding of what consumers watch and buy. Nielsen’s Watch segment provides media and advertising clients with Total Audience measurement services for all devices on which content—video, audio and text—is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry’s only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen also provides its clients with analytics that help improve performance.

 

 

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EXECUTIVE COMPENSATION     

 

Business Performance

Nielsen is dedicated to driving shareholder value by posting solid operating performance for nearly 10 years. The Company’s long-term business performance and progress against strategic initiatives form the context in which pay decisions are made. We have delivered resilient business performance with sustained growth over the last three years, and notably sustained solid growth in 2016, Mitch Barns’ third year as CEO, as presented below:

For 2016:

 

   

Revenues up 4.1% over prior year on a constant currency1 basis (2.2% on a reported basis as shown below)

 

   

Adjusted EBITDA2 up 5.2% % over prior year on a constant currency1 basis (up 4.3% on a reported basis as shown below)

 

   

Normalized free cash flow3 up 16.5% over prior year

 

LOGO

The reconciliation of normalized free cash flow to net cash provided by operating activities in the last three years is provided below:

 

Free Cash Flow3 ($ in millions – as reported)    2014        2015        2016  
Net cash provided by operating activities    $ 1,093        $ 1,209        $ 1,296  
Capital expenditures      (412        (401        (391
Free Cash Flow    $ 681        $ 808        $ 905  
Non-recurring contribution to the Nielsen Foundation                        36  
Normalized Free Cash Flow    $ 681        $ 808        $ 941  

 

1   We calculate constant currency percentages by converting our prior-period local currency financial results using the current period foreign currency exchange rates and comparing these adjusted amounts to our current period reported results. See pages 43 and 44 of our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on February 17, 2017 for the reconciliation of the revenue and Adjusted EBITDA growth on a constant currency basis.

 

2   We define Adjusted EBITDA as net income or loss from our consolidated statements of operations before interest income and expense, income taxes, depreciation and amortization, restructuring charges, goodwill and intangible asset impairment charges, stock-based compensation expense, and other non-operating items from our consolidated statements of operations as well as certain other items considered unusual or non-recurring in nature. For a reconciliation of net income to Adjusted EBITDA, see pages 36 and 37 of our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on February 17, 2017.

 

3   We define normalized free cash flow as net cash provided by operating activities, plus contributions to the Nielsen Foundation less net capital expenditures.

 

 

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EXECUTIVE COMPENSATION     

 

Total Shareholder Return1

The chart below shows the value of a $100 investment in Nielsen stock over a 3-year period beginning December 31, 2013 and ending December 31, 2016. We have compared our performance to the S&P 500 and to a market cap-weighted composite of the peer group we use to measure relative total shareholder return in our Long-Term Performance Plan (“LTPP”) as described under “– How Pay Decisions are Made – Long-Term Performance Plan (LTPP).”

 

 

NIELSEN HOLDINGS plc—3-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN

 

LOGO

 

1   We define total shareholder return as the change in stock price over the 3-year period ended December 31, 2016, assuming monthly reinvestment of dividends.

 

 

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EXECUTIVE COMPENSATION     

 

Highlights for 2016:

 

   

We continued to make outstanding progress on the Nielsen Total Audience Measurement framework, with the syndication of Digital Content Ratings in September and the multi-phased syndication of Total Content Ratings. We also added more return path data and out of home viewing sources into our methodology. Additionally, we expanded our coverage of streaming video on demand (“SVOD”) with more than 20,000 SVOD program episodes now measured. While the work will continue well into 2017, our teams executed extraordinarily well, and client adoption is steadily growing. We believe our Total Audience Measurement solutions are poised to play a big role in the 2017 Advertising Upfronts. Our Digital Ad Ratings product is available in 25 markets. Nielsen’s Marketing Effectiveness business remains a strong growth engine, up approximately 20%, supported by our Nielsen Marketing Cloud.

 

 

   

We made good progress on our Connected System Initiative that will allow our clients to seamlessly connect vast amounts of data and analytics to help them understand what happened, why it happened, and what to do about it – faster than ever. Several charter consumer packaged goods manufacturer and retail clients are already participating in the development process for this unique and powerful data integration, analytics, and activation system.

 

 

   

Our Emerging Markets have performed well, led by India, China, Turkey, Brazil, Mexico, Russia, Indonesia and Argentina.

 

 

   

Recent acquisitions including Repucom and Gracenote are important to our strategy and position us well for continued growth.

 

 

   

Slowing growth in the third and fourth quarters along with lowered guidance ranges, driven by performance in our US Buy business, contributed to a decline in share price at the end of the year versus the beginning of the year.

 

Executive Compensation Overview

Nielsen’s executive compensation program is designed to incent and reward our leadership team to deliver sustainable growth and financial performance while delivering long-term shareholder value.

Key considerations in 2016 were:

2016 Advisory Vote on Executive Compensation

In 2016, our shareholders continued to show confidence in Nielsen’s executive compensation program with more than 98% of the votes cast at our shareholder meeting affirming our executive compensation program on an advisory basis. In 2016, we continued a robust outreach program to our shareholders to discuss topics including Company performance, our executive compensation program, and how we disclose information in our proxy statement. Each meeting, which was led by the Chairman of the Board, resulted in valuable feedback that we used to strengthen the disclosure of our compensation program. We continue to strive to keep our programs simple and focused on meaningful performance metrics. For more information on Nielsen’s shareholder outreach program, please refer to page 14.

Meritocracy

Nielsen has a strong culture of pay for performance which serves to align Company goals and performance with pay outcomes for executives. Nielsen conducts quantitative assessments of business financial performance and evaluates individual contributions towards key business objectives in order to differentiate rewards. NEOs participate in the same performance assessment process applicable to all managerial employees, including an annual performance appraisal and semi-annual individual peer rankings of performance and leadership impact.

Total Company Performance

Nielsen’s culture reflects our core values of Open, Connected, Useful, and Personal. Our compensation programs reinforce the values by connecting all of our employees to core business objectives. Our NEOs participate in the same annual incentive plan applicable to all managerial employees, which is funded based on Company EBITDA performance as described under “– How Pay Decisions are Made – Annual Incentive Plan.” Additionally, NEOs’

 

 

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EXECUTIVE COMPENSATION     

 

performance assessments and pay decisions are influenced by our total Company performance versus financial objectives (see “– 2016 Pay Decisions and Performance – Total Company Performance – Financial”) and specific individual business financial objectives.

Variable Pay at Risk

Nielsen’s compensation programs are designed so that a significant portion of each NEO’s compensation is at risk; dependent on the achievement of challenging annual and long-term performance goals and/or the performance of our share price as laid out in the charts and tables below. In 2016, short-term pay was delivered 100% in cash. The Compensation Committee noted that the proportion of equity provided by long-term incentive grants in the NEOs’ total annual pay mix had reached the targeted range in 2015. Therefore, for 2016, the Compensation Committee decided that annual incentive payouts would revert to being paid 100% in cash (versus 75% in cash and 25% in restricted stock units (“RSUs”) that had been our practice since 2013). Long-term pay is delivered exclusively in the form of equity to align the interests of the NEOs with the creation of value for our shareholders.

 

  CEO COMPENSATION STRUCTURE 2016

 

                         LOGO

 

     Elements of Total Direct Compensation    2016  
CEO   Proportion of pay subject to specific quantitative performance criteria      57%  
  Proportion of pay at risk      90%  
  Proportion of pay delivered in the form of equity      72%  

 

  OTHER NEOS COMPENSATION STRUCTURE 20161

 

                         LOGO

 

     Elements of Total Direct Compensation    2016  
NEOs   Proportion of pay subject to specific quantitative performance criteria      51%  
  Proportion of pay at risk      78%  
  Proportion of pay delivered in the form of equity      57%  

 

1   Excludes the $325,000 payment made to Mr. Jackson in February 2016 pursuant to the terms of his offer letter dated February 20, 2014 to compensate him for the loss of his unvested SERP benefit from his previous employer (see below under – “Summary Compensation Table, Footnote 1”)

 

 

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EXECUTIVE COMPENSATION     

 

Executive Compensation Elements

 

Element    Purpose       How Component Operates
Annual Base Salary    Attract and retain top talent  

  Reviewed in intervals of 24-36+ months

  When reviewing base salary levels, the Compensation Committee considers a variety of factors including: (1) our pay for performance philosophy, (2) market benchmark compensation data, (3) the NEO’s individual performance and contributions to the success of the business in the prior year, (4) Company performance, (5) current pay mix, and (6) role changes

Annual Incentive (“AIP”)    Motivate NEOs to accomplish short-term business performance goals that contribute to long-term business objectives  

  Annual incentive target opportunities are established each year with reference to (1) our pay for performance philosophy, (2) market benchmark compensation data, (3) the NEO’s individual performance and contributions to the success of the business in the prior year, (4) Company performance, (5) current pay mix, (6) role changes, and (7) prior year target

   The Compensation Committee determines individual payout using the annual incentive plan design applicable to all managerial employees

   The EBITDA performance formula determines incentive plan funding and the initial payout percentage for all participants

  100% EBITDA performance to target = 100% incentive pool funding and 100% initial individual payout (see “– How Pay Decisions are Made – Annual Incentive Plan” for the annual incentive plan performance-payout matrix)

  The initial payout percentage may be adjusted up or down based on a quantitative assessment of individual performance vs objectives

   Maximum payout opportunity is capped at 200% of individual target

  Threshold EBITDA performance results in an initial payout/funding of 70%

   Zero funding and zero initial payout if EBITDA performance is below threshold

  The Compensation Committee has discretion to reduce the fund by up to 30% if free cash flow results fall short of objectives

  In order to qualify AIP awards to NEOs under Section 162(m) of the Internal Revenue Code (the “Code”), which is explained in greater detail under “– How Pay Decisions are Made – Annual Incentive Plan”, NEO payouts are determined initially using the following formula:

  Adjusted EBITDA performance x 2% x executive allocation percentage

   Annual incentive plan payouts are then made according to the underlying EBITDA performance formula, subject to both the maximum of 2% of EBITDA and 200% of target cap on payouts

   The calculation of EBITDA performance for annual incentive funding purposes re-calculates reported Adjusted EBITDA to eliminate the impact of foreign currency on the year’s performance using a standard exchange rate established at the beginning of the year

  In 2016, payouts were delivered 100% in cash (versus 75% in cash and 25% in RSUs that had been our practice since 2013)

  Payouts are subject to recoupment under the terms of Nielsen’s clawback policy (see below under “– Other Policies and Guidelines – Clawback Policy”)

Long-Term Incentive (“LTI”)    Deliver long-term sustainable performance and align executive rewards with long-term returns delivered to shareholders  

  LTI award values are determined each year by reference to (1) our pay for performance philosophy, (2) market benchmark compensation data, (3) the NEO’s individual performance and contributions to the success of the business in the prior year, (4) Company performance, (5) current pay mix, (6) role changes, and (7) prior year award

 

Performance RSUs

   Alignment with long-term shareholder return  

   Subject to performance against two 3-year cumulative performance metrics, free cash flow and relative total shareholder return with assigned weighting of 60% and 40%, respectively

   Represents approximately 50% of the annual LTI value

            

  Specific threshold, target and maximum performance metrics for 3-year cumulative free cash flow performance will not be disclosed in advance for competitive reasons but targets are designed to be aggressive and achievable and are fully aligned with our approved 3-year strategic plan and guidance issued to investors at the beginning of the performance period

   The performance payout matrix is shown under “– How Pay Decisions are Made – Long-Term Performance Plan (LTPP)”

   Payouts are subject to recoupment under the terms of Nielsen’s clawback policy (see below under “– Other Policies and Guidelines – Clawback Policy”)

   Relative total shareholder return is measured against a peer group used solely for this purpose. Companies in this peer group are selected to represent a comparable investment profile to Nielsen by virtue of their being in comparable businesses or being representative of the markets we serve

  Performance metrics for the relative total shareholder return portion are described in more detail under “– How Pay Decisions are Made – Long-Term Performance Plan (LTPP)”

   Zero payout for performance below threshold

  Maximum payout opportunity is capped at 200% of target

   Payouts capped at target if absolute total shareholder return is negative

  No dividend equivalents on unearned performance RSUs

   

Stock Options

   Alignment with shareholder return and retention  

  Four-year time-vested

  Represents approximately 25% of LTI value

   

RSUs

   Alignment with shareholder return and retention  

  Four-year time-vested

  Represents approximately 25% of LTI value

   Dividend-equivalents on RSU awards are accrued and delivered as additional RSUs

Health and Welfare Plans, Perquisites    Promote overall wellbeing and avoid distractions caused by unforeseen health/financial issues  

  Health and Welfare plans generally available to other employees

   De minimis financial planning and wellness services allowances

 

 

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EXECUTIVE COMPENSATION     

 

Summary of NEO Pay Decisions

CEO

Mr. Barns has served as Chief Executive Officer since January 1, 2014. Each year the Compensation Committee reviews Mr. Barns’ compensation. In 2016, the Compensation Committee maintained his annual incentive target at $2,000,000 and increased his long-term incentive target from $6,000,000 to $7,000,000 in line with the median compensation level for CEOs in our executive compensation peer group. Details of Mr. Barns’ compensation are set out in the tables below.

 

   2015 Actual     2016 Target      2016 Actual     % Change from 2015     
  Base Salary    $ 1,000,000       N/A      $ 1,000,000     0%     
  Annual Incentive    $ 2.060,000 1    $ 2,000,000      $ 1,700,000 1    -17.5%     
  Long-Term Incentive    $ 6,000,000     $ 7,000,000      $ 6,500,000     8.3%     

 

1   Actual payout was based on the Compensation Committee’s full year performance assessment.

In 2016, Mr. Barns was granted the following long-term incentive equity. As a result of the Company’s third quarter announcement that earnings would be lower than guidance, the Compensation Committee reduced the value of Mr. Barns’ planned October grant of stock options and RSUs by $500,000 to $3,000,000, for an annual equity grant value of $6,500,000.

 

  Date    Grant Type    # RSUs/Options    Value1      Performance Period     
  February 18, 2016    Performance RSUs    73,146    $ 3,500,000      2016 - 2018     
  October 20, 2016    RSUs    27,752    $ 1,500,000      N/A     
  October 20, 2016    Stock Options    191,571    $ 1,500,000      N/A     

 

1   This is the grant date fair value intended by the Compensation Committee. Actual accounting values reported in “Tables and Narrative Disclosure” will differ slightly.

Other NEOs

Jamere Jackson

Mr. Jackson has served as Chief Financial Officer since March 10, 2014. Following a review of Mr. Jackson’s performance and noting that his base salary had not been reviewed since his start date, the Compensation Committee increased his base salary from $700,000 to $750,000 and his long-term equity target from $1,900,000 to $2,550,000. Details of Mr. Jackson’s compensation are set out in the tables below.

 

   2015 Actual     2016 Target      2016 Actual     % Change from 2015     
  Base Salary    $ 700,000       N/A      $ 750,000     7.1%     
  Annual Incentive    $ 875,000 1    $ 800,000      $ 680,000 1    -22.3%     
  Long-Term Incentive    $ 1,900,000     $ 2,550,000      $ 2,375,000     25.0%     

 

1   Actual payout was based on the Compensation Committee’s full year performance assessment.

In 2016, Mr. Jackson was granted the following long-term incentive equity. As a result of the Company’s third quarter announcement that earnings would be lower than guidance, the Compensation Committee reduced the value of Mr. Jackson’s planned October grant of stock options and RSUs by $175,000 to $1,100,000, for an annual equity grant value of $2,375,000.

 

  Date    Grant Type    # RSUs/Options    Value1      Performance Period     
  February 18, 2016    Performance RSUs    26,646    $ 1,275,000      2016 - 2018     
  October 20, 2016    RSUs    10,176    $ 550,000      N/A     
  October 20, 2016    Stock Options    70,243    $ 550,000      N/A     

 

1   This is the grant date fair value intended by the Compensation Committee. Actual accounting values reported in “Tables and Narrative Disclosure” will differ slightly.

 

 

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EXECUTIVE COMPENSATION     

 

Steve Hasker

Effective January 1, 2016, Mr. Hasker was appointed Global President and Chief Operating Officer, with expanded global leadership responsibility for global client service and product leadership across our Watch and Buy businesses. Commensurate with his promotion, the Compensation Committee approved an increase to his annual incentive target from $950,000 to $1,100,000 and his long-term equity target increased from $1,900,000 to $3,000,000. Details of Mr. Hasker’s compensation are set out in the tables below.

 

   2015 Actual     2016 Target      2016 Actual     % Change from 2015     
  Base Salary    $ 900,000       N/A      $ 900,000     0%     
  Annual Incentive    $ 1,000,000 1    $ 1,100,000      $ 935,000 1    -6.5%     
  Long-Term Incentive    $ 1,900,000     $ 3,000,000      $ 2,800,000     47.4%     

 

1   Actual payout was based on the Compensation Committee’s full year performance assessment.

In 2016, Mr. Hasker was granted the following long-term incentive equity. As a result of the Company’s third quarter announcement that earnings would be lower than guidance, the Compensation Committee reduced the value of Mr. Hasker’s planned October grant of stock options and RSUs by $200,000 to $1,300,000, for an annual equity grant value of $2,800,000.

 

  Date    Grant Type      # RSUs/Options      Value1      Performance Period     
  February 18, 2016      Performance RSUs        31,348      $ 1,500,000      2016 - 2018     
  October 20, 2016      RSUs        12,026      $ 650,000      N/A     
  October 20, 2016      Stock Options        83,014      $ 650,000      N/A     

 

1   This is the grant date fair value intended by the Compensation Committee. Actual accounting values reported in “Tables and Narrative Disclosure” will differ slightly.

James Powell

Details of Mr. Powell’s compensation are set out in the tables below.

 

   2015 Actual     2016 Target      2016 Actual     % Change from 2015     
  Base Salary    $ 360,577 1      N/A      $ 750,000     N/A     
  Annual Incentive    $ 750,000 2    $ 750,000      $ 623,000 2    -16.9%     
  Long-Term Incentive    $ 1,300,000     $ 1,300,000      $ 1,300,000     0%     

 

1   Amount reflects a partial year payment based on his start date. Mr. Powell has served as Chief Technology Officer since July 6, 2015.

 

2   Actual payout was based on the Compensation Committee’s full year performance assessment.

In 2016, Mr. Powell was granted the following long-term incentive equity in line with the target value approved by the Compensation Committee:

 

  Date    Grant Type    # RSUs/Options      Value1      Performance Period     
  February 18, 2016    Performance RSUs      13,585      $ 650,000      2016 - 2018     
  October 20, 2016    RSUs      6,013      $ 325,000      N/A     
  October 20, 2016    Stock Options      41,507      $ 325,000      N/A     

 

1   This is the grant date fair value intended by the Compensation Committee. Actual accounting values reported in “Tables and Narrative Disclosure” will differ slightly.

Eric J. Dale

Details of Mr. Dale’s compensation are set out in the tables below.

 

   2015 Actual     2016 Target      2016 Actual     % Change from 2015     
  Base Salary    $ 302,885 1      N/A      $ 750,000     N/A     
  Annual Incentive    $ 525,000 1,2    $ 750,000      $ 675,000 2    N/A     
  Long-Term Incentive    $ 1,200,000     $ 1,200,000      $ 1,200,000     0%     

 

 

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EXECUTIVE COMPENSATION

 

 

1   Amount reflects a partial year payment based on his start date. Mr. Dale has served as Chief Legal Officer since August 1, 2015.

 

2   Actual payout was based on the Compensation Committee’s full year performance assessment.

In 2016, Mr. Dale was granted the following long-term incentive equity in line with the target value approved by the Compensation Committee:

 

  Date    Grant Type   # RSUs/Options    Value1      Performance Period     
  February 18, 2016    Performance RSUs   12,540    $ 600,000      2016 - 2018     
  October 20, 2016    RSUs   5,550    $ 300,000      N/A     
  October 20, 2016    Stock Options   38,314    $ 300,000      N/A     

 

1   This is the grant date fair value intended by the Compensation Committee. Actual accounting values reported in “Tables and Narrative Disclosure” will differ slightly.

2014 LTPP Performance Payouts

The performance period for our 2014 LTPP ended on December 31, 2016. Long-term incentive grants under this plan were made in February 2014 and their grant date fair value was disclosed in our 2015 proxy statement. In February 2017, the Compensation Committee approved performance and payouts under this plan as outlined in the table below. The Committee noted that the plan had functioned as intended in aligning NEO pay to the cumulative performance of the business over the three-year period.

2014 LTPP Performance

 

Plan Metrics

Jan 1, 2014 – Dec 31, 2016

        

Final Results Based on

      Performance Jan 1, 2014 – Dec 31, 2016      

  Elements    Performance Target for
100% Payout
          Result    Weight   

Payout     

Percentage     

  Free Cash Flow1    $2.68 billion            $2.56 billion    60%    95.63%     
  Relative Total Shareholder Return    50th Percentile            5th Percentile    40%    0%     
  Total Shares    N/A            N/A    100%    57.37%     

 

1   Free cash flow performance is the sum of the reported free cash flow in each calendar year 2014-2016, adjusted to eliminate the impact of foreign exchange translation impacts which had the effect of adding $137,000,000 to the performance result.

 

2   Relative total shareholder return performance reflects the decline in share price in the final quarter of the year.

2014 LTPP Payouts1

 

      Target Performance
RSUs Awarded
     Payout
Percentage
  

Vested and     
Delivered in     

Shares     

 
  Mitch Barns      43,500      57.37%      24,960       
  Jamere Jackson      20,000      57.37%      11,476       
  Steve Hasker      20,100      57.37%      11,533       
  James Powell      N/A      N/A      N/A       
  Eric J. Dale      N/A      N/A      N/A       

 

1   Messrs. Powell and Dale were not hired until July and August 2015, respectively, and therefore were not participants in the 2014 LTPP.

Realizable Pay

A significant portion of executive pay is at risk depending on business performance and market conditions. The actual pay earned as cash or made available via the vesting of stock awards during the year is referred to as “realizable pay.” Realizable pay is different from the amounts reported in the Summary Compensation Table (as shown under “– Tables and Narrative Disclosure – Summary Compensation Table”), which uses the accounting grant date value of equity awards.

 

 

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EXECUTIVE COMPENSATION     

 

We define realizable pay as:

 

   

cash received as base salary in each year;

 

   

cash annual incentives and other bonuses earned in each year;

 

   

intrinsic value (share price minus exercise price) of stock option awards vesting in each year using the share price on December 31 of the respective year;

 

   

market value of restricted stock units vesting in each year using the share price on December 31 of the respective year; and

 

   

value of financial planning reimbursements and executive wellness reimbursements as outlined under “– Summary Compensation Table – All Other Compensation.”

The table below presents the realizable pay for each of our NEOs for 2015 and 2016 and shows the total amount of compensation reported for each of our NEOs in the Summary Compensation Table for 2016.

 

Realizable Pay            Total Compensation in Summary
Compensation Table
 
      2015      2016      Percentage
Increase/(Decrease)
            2016     

Percent Variance

to 2016 Realizable

Pay

 
Mitch Barns1    $ 4,698,766      $ 6,238,553        33%              $ 10,122,489        62%  
Jamere Jackson2    $ 2,848,486      $ 2,950,664        4%              $ 4,486,610        52%  
Steve Hasker1    $ 3,557,985      $ 4,740,829        33%              $ 5,074,867        7%  
James Powell3    $ 1,110,577      $ 2,525,852        127%              $ 2,771,222        10%  
Eric J. Dale3    $ 699,485      $ 1,506,575        115%              $ 2,848,807        89%  

 

1   The realizable pay growth for Messrs. Barns and Hasker was driven primarily by the vesting of the 2013 LTPP performance shares in February 2016. There was no similar vesting in prior years since the LTPP was introduced for the first time in 2013.

 

2   Both the realizable pay value for Mr. Jackson and the Summary Compensation Table value includes a special payment he received to cover the loss of his unvested SERP benefit at his prior employer (see “– Tables and Narrative Disclosure – Summary Compensation Table”, footnote 1).

 

3   Messrs. Powell and Dale were hired on 7/6/2015 and 8/1/2015, respectively. The 2015 values attributed to them are based on the portion of the year during which they were employed.

NEO Compensation Practices

What we do:

 

   

Emphasize long-term equity in prospective pay increases.

 

   

Require all executive officers to hold a significant amount of Nielsen stock (as outlined under “– Compensation Practices and Governance – Share Ownership Guidelines”).

 

   

Prohibit hedging of shares.

 

   

Prohibit pledging of share-based awards and shares subject to stock ownership guidelines.

 

   

Recoup incentive awards in the event of financial restatement as a result of intentional misconduct on the part of the executive, and where the award would have been lower as a result of the restatement. The policy is shown under “– Compensation Practices and Governance – Other Policies and Guidelines – Clawback Policy.”

 

   

Offer de-minimis perquisites.

What we don’t do:

 

   

No excise tax gross-up agreements.

 

   

No single trigger accelerated vesting of equity in the event of a change-in-control.

 

   

No dividend equivalents paid on unearned performance restricted stock units granted under the LTPP.

 

 

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EXECUTIVE COMPENSATION

 

2016 Pay Decisions and Performance

Total Company Performance – Financial

 

  Metric    Target    Result     
  Adjusted EBITDA growth % over prior year at constant currency    7%    5.2%     
  Revenue growth at constant currency1    4-6%    4.1%     
  Free Cash Flow growth as reported    18%    16.5%     

 

1   We calculate constant currency percentages by converting our prior-period local currency financial results using the current period foreign currency exchange rates and comparing these adjusted amounts to our current period reported results.

CEO Performance Assessment for Mitch Barns

Based on the Annual Incentive Plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”), the plan fund and initial payout were set at 87%.

The Compensation Committee considered total Company performance as presented above as well as Mr. Barns’ performance against the objectives presented below to arrive at his final performance assessment.

Objectives

 

 

KEY FINANCIAL TARGETS

 

Total Company growth

 

Reported revenues for the full year increased 2.2% to $6,309 million, 4.1% on a constant currency basis compared to 2015. The Company’s practice is to focus primarily on constant currency results which are a better reflection on the underlying operating performance of the business.

 

Adjusted EBITDA grew 5.2% on a constant currency basis compared to 2015.

 

Business segment growth

 

Revenues within the Buy segment decreased 0.7% on a reported basis but increased 2.3% on a constant currency basis, to $3,322 million. On a constant currency basis our Buy segment showed strong resilience in emerging markets with revenues increasing 8.6% but saw 0.4% decline in developed markets.

 

Revenues within the Watch segment increased 5.7% on a reported basis, or 6.3% on a constant currency basis, to $2,987 million. Growth was driven by strong performance in Audience Measurement (8.3% constant currency).

 

Capital allocation

 

The balanced capital allocation objectives to grow dividend in line with earnings, invest in tuck-in acquisitions, and execute share repurchases within authorization were accomplished.

 

  Increased quarterly dividend by 11%

 

  Acquisitions contributed approximately one point of revenue growth as planned (see below)

 

  Executed $418 million of stock buy-backs in line with the capital allocation plan

 

Productivity

 

  Regional restructuring plan exceeded its $40 million productivity goal.

 

Shareholder Return

 

  Slowing growth in third and fourth quarters along with lowered guidance ranges, driven by performance in our US Buy business, contributed to a decline in share price at the end of the year versus the beginning of the year.

 

 

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EXECUTIVE COMPENSATION   

 

 

 

STRATEGY & INITIATIVES

 

Total Audience

 

The continued rollout of Total Audience was accomplished on plan:

 

   Digital ad ratings were expanded to 25 markets and was adopted by a major client

 

   Content measurement objectives were accomplished

 

   SVOD measurement up to 20,000 program episodes

 

   syndicated reporting of digital content ratings launched on schedule; enables comparative measurements of viewing across all digital platforms; expanded relationship with Facebook

 

   commercial release of Total Content Ratings allowing content owners to use the data in-market

 

   Acquired access to set top box data from multiple Multi-Channel Video Programming Distributors

 

   Added out-of-home measurement using Nielsen Audio measurement capabilities

 

Connected System

 

The objectives to complete initial design architecture and sign on charter clients were completed on plan:

 

   User interface and initial applications were completed. Five pilot clients have been engaged to participate in the product development

 

   Expanded e-commerce capabilities to 11 markets on plan

 

Enterprise Marketing Platform (renamed “Nielsen Marketing Cloud”)

 

The objectives to complete the initial build of the infrastructure and increase client penetration to achieve 30% revenue growth were completed ahead of plan:

 

   Nielsen Marketing Cloud is fully operational in US and key Western European countries.

 

   Revenue growth in 2016 over 2015 was 38%

 

Acquisitions

 

The objective to pursue tuck-in acquisitions to complement strategy and add growth was accomplished on plan:

 

   Closed acquisitions including Repucom, Pointlogic, Informate, VisualDNA and Qterics collectively added providing approximately one point of revenue growth.

        

 

 

CULTURE AND EMPLOYEE ENGAGEMENT

 

Diversity & inclusion (“D&I”)

 

   Launched the Nielsen Global Inclusion Council, in which senior leaders champion D&I across the globe through mentoring programs, recruitment, and leadership development.

 

   Achieved listing on Fortune’s 50 Best Workplaces for Diversity list.

 

   Received a perfect score on the Human Rights Campaign’s Best Places to Work for LGBT Equality (fourth year in a row).

 

   Recognized by DiversityInc’s Top 50 Companies for Diversity (third year in a row) and ranked #4 on Diversity MBA’s Best Places for Women & Diverse Managers to Work.

 

Employee Engagement

 

   Doubled employee equity participation since 2013 and launched Employee Stock Purchase Plan in the US, Canada, Sweden, France, Singapore, Turkey and Germany.

        

 

 

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EXECUTIVE COMPENSATION

 

 

 

PERFORMANCE ASSESSMENT FOR CEO

 

 

The plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) provided Mr. Barns an initial payout of 87% of his target opportunity.

 

The Compensation Committee noted the Company’s continued commercial growth despite the challenging year for the US Buy business. Based on its full assessment the Compensation Committee approved a payout of $1,700,000 or 85% of his target opportunity.

        

Performance Assessments for Other NEOs

Based on the annual incentive plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) the initial incentive payout for each NEO was 87%.

NEOs were measured against the Company financial objectives as disclosed above (under “– 2016 Pay Decisions and Performance – Total Company Performance – Financial”).

Mr. Barns makes pay recommendations for his direct reports after quantifying their contributions to Nielsen’s financial performance and assessing performance against objectives set at the beginning of the year. He also considers the quality of the results delivered using a framework that quantifies the performance of each individual relative to his/her peers on factors such as leadership, Nielsen values, and degree of challenge. This qualitative assessment helps manage risk and better differentiates rewards for exceptional leaders.

Performance Assessment for Jamere Jackson

Financial

Mr. Jackson was assessed on total Company financial metrics (as described above under “– 2016 Pay Decisions and Performance – Total Company Performance – Financial”) and on his performance against objectives presented below.

Objectives

Strategic Planning

Mr. Jackson continued to drive our segments toward faster growing, higher margin businesses. This resulted in the divestiture of non-core assets, restructuring of certain business units, reinvesting in growth platforms and investing in faster growing tuck-in acquisitions including Repucom and Gracenote. Mr. Jackson’s tax team led the tax and financial aspects of the re-domiciling of the Company from the Netherlands to England and Wales and completed the project on plan.

Shareholder Relations

Mr. Jackson and his IR team continued to expand our shareholder outreach program and his IR team was once again recognized by institutional investors as one of the top teams in our industry sector.

Balanced Capital Allocation

Mr. Jackson fulfilled the Company’s balanced capital allocation objective. Under his leadership, Nielsen increased the quarterly dividend by 11% and executed $418 million of stock buy-backs in line with the capital allocation plan.

Performance Assessment

The plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) provided Mr. Jackson an initial payout of 87% of his target opportunity.

 

 

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EXECUTIVE COMPENSATION

 

The Compensation Committee considered Mr. Jackson’s stewardship of the Company’s financial results and his contribution in devising and executing the Company’s capital allocation plan. The Compensation Committee noted his leadership of the expanded investor relations and outreach programs. Based on its full performance assessment, the Compensation Committee approved a payout of $680,000, or 85% of his target opportunity.

Performance Assessment for Steve Hasker

Financial

Mr. Hasker was assessed on total Company financial metrics (as described above under “– 2016 Pay Decisions and Performance – Total Company Performance – Financial”), and his performance against the objectives presented below.

Objectives

Watch Business Growth

The Watch segment achieved on a constant currency basis, revenue growth of 6.3% and Adjusted EBITDA growth of 7.0% in line with objectives.

Marketing Cloud Growth

Mr. Hasker oversaw the development of the Marketing Cloud business (formerly known as Marketing Effectiveness), bringing together the full range of Nielsen assets to provide precision in advertising. This contributed to the roughly 20% revenue growth of the Marketing Effectiveness business in 2016.

Buy business Growth

Growth in emerging markets was on plan at 8.6% but developed markets saw a decline of 0.4% on a constant currency basis which was below plan.

Total Audience

Mr. Hasker’s team’s execution of Total Audience objectives was above expectations. The team made Digital Content Ratings available in full syndication and expanded subscription video on demand to track more than 20,000 program episodes. The team fulfilled its objective to expand Digital Ad Ratings internationally. The team launched Total Content Ratings syndication on schedule.

Connected System

Mr. Hasker’s team laid the foundation for our Connected System. Phase 1 is complete and five clients have been recruited as partners in the development of the system.

Strategy

Mr. Hasker led the global transformation of our global Buy business to a simpler structure that better aligns to our clients and their needs. The restructuring achieved its planned productivity savings.

Performance Assessment

The plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) provided Mr. Hasker an initial payout of 87% of his target opportunity.

The Compensation Committee assessed the Company’s total commercial growth and Mr. Hasker’s leadership of the Total Audience, Marketing Cloud and Connected System strategic initiatives.

 

 

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EXECUTIVE COMPENSATION

 

Based on its full performance assessment, the Compensation Committee approved a payout of $935,000, or 85% of Mr. Hasker’s target opportunity.

Performance Assessment for James Powell

Financial

Mr. Powell was assessed on total Company financial metrics (as described above under “– 2016 Pay Decisions and Performance – Total Company Performance – Financial”) and his performance against the objectives presented below.

Objectives

Technology

Mr. Powell’s team drove significant change and upgrade to internal technology systems and completed objectives on plan to switch enterprise systems from Microsoft to Google, improve management information systems and migrate internal systems to the Cloud.

Product Delivery

Mr. Powell’s team was instrumental in the phase 1 development of the Connected System. Mr. Powell’s team also executed key client migrations onto the Nielsen Marketing Cloud on schedule.

Organization

Mr. Powell restructured his organization and leadership team to better align with the Company’s strategic focus. Changes were completed on time and within plan.

Performance Assessment

The plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) provided Mr. Powell an initial payout of 87% of his target opportunity.

The Compensation Committee considered Mr. Powell’s leadership of the Company’s migration to the Cloud and his role in design of the technology platform underpinning the Connected System. The Committee noted that Mr. Powell’s restructuring activities had been effective in focusing resources on strategic priorities.

Based on its full performance assessment the Compensation Committee approved a payout of $623,000, or 83% of Mr. Powell’s opportunity.

Performance Assessment for Eric J. Dale

Financial

Mr. Dale was assessed on total Company financial metrics (as described above under “– 2016 Pay Decisions and Performance – Total Company Performance – Financial”) and his performance against the objectives presented below.

Objectives

Corporate Governance

Mr. Dale’s team continued to lead the governance aspects of the Company’s re-domiciling to the UK.

He worked on two successful new Board member searches and developed an enhanced director onboarding program.

 

 

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EXECUTIVE COMPENSATION

 

Acquisitions

Mr. Dale’s team was instrumental in the closing of several “tuck-in” acquisitions as contemplated in our strategic plan. All were closed on time and in alignment with expected financial parameters.

Compliance, Integrity, Enterprise Risk Management and Security

Mr. Dale fulfilled his objectives to establish robust governance protocols and embed risk management into strategic planning. He strengthened the compliance and integrity organization within budget, integrated global security operations, and instituted an enhanced Enterprise Risk Management process to provide both more robust periodic risk assessments, analysis and mitigation plans, as well as continuous risk assessment and alert notifications across our global operations.

Performance Assessment

The plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) provided Mr. Dale an initial payout of 87% of his target opportunity.

The Compensation Committee considered Mr. Dale’s influence and leadership in improving corporate governance and the Company’s management of enterprise risk.

Based on its full performance assessment the Compensation Committee approved a payout of $675,000, or 90% of Mr. Dale’s opportunity.

How Pay Decisions are Made

Annual Base Salaries

Base salary is the only fixed component of our executive officers’ compensation. The Compensation Committee considers market benchmarks supplied by its compensation consultant, Meridian Compensation Partners, LLC (“Meridian”), to ensure that base salaries are competitive in the marketplace and are serving their purpose to attract and retain top talent.

The Compensation Committee considers executive officers for salary increases generally in 24-36+ month intervals unless there is a change in role.

Executive officers are not involved in determining their own compensation.

Annual Incentive Plan

The purpose of the annual incentive plan is to motivate executives to accomplish short-term business performance goals that contribute to long-term business objectives. The Compensation Committee approves the applicable targets under the plan at the beginning of each year. NEOs participate in the same incentive plan as the Company’s senior managers (approximately 900 associates). Approximately 4% of the incentive fund was paid to NEOs in 2016.

In determining the target opportunity for each NEO, the Compensation Committee considered general industry market benchmarks and peer group data provided by Meridian; executives’ total direct compensation mix; changes in role and job responsibilities; and Company financial performance and individual performance.

162(m) Plan

Under Section 162(m) of the Code, expenses from compensation to covered employees in excess of $1 million (per employee) during a taxable year are only tax-deductible to the extent that the compensation is “performance-based” or otherwise qualifies as exempt from the deductible limit. Our annual incentive payments are intended to qualify as “performance-based compensation” under the Code. Our covered employees are our chief executive officer and the three other most highly-paid named executive officers, other than our chief financial officer. A maximum annual incentive payout fund for the NEOs is determined by a formula which calculates 2% of Adjusted EBITDA performance and allocates it to each executive officer in proportions ranging between 10% and 18% of the fund. This yields a maximum fund and the Compensation Committee exercises negative discretion to determine final payouts using the Annual Incentive Plan Payout Formula described below.

 

 

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EXECUTIVE COMPENSATION

 

Annual Incentive Plan Payout Formula

 

    A total payout fund is derived formulaically based on EBITDA performance against target and is expressed as a “funding percentage” (see – “Performance - Payout Formula” table below).

 

    To assess EBITDA performance for annual incentive funding we recalculate reported Adjusted EBITDA to eliminate the impact of foreign currency on the year’s result by using a standard exchange rate established at the beginning of the year. The Committee may adjust for other items including its assessment of Free Cash Flow performance.

 

    Initial individual payouts are determined by applying the “funding percentage” to the individual’s target opportunity.

 

    Final individual payouts are determined after a full assessment of:

 

    Each individual’s contribution to overall Company performance (see – “2016 Pay Decisions and Performance – Total Company Performance – Financial);

 

    Other quantitative objectives; and

 

    A qualitative assessment to take into account, as appropriate, degree of difficulty, extraordinary market circumstances, and leadership impact.

 

    Based on the full assessment, individual payouts may be adjusted up or down from the initial payout to ensure that total performance is reflected in the final payouts.

 

    Aggregate individual payouts may not exceed the total payout fund.

Performance targets are aggressive and achievable

 

    The Compensation Committee believes that EBITDA growth is highly correlated to the creation of value for our shareholders and is an effective measure of the NEOs’ contributions to short-term Company performance.

 

    In establishing the EBITDA growth target, the Compensation Committee considered the Company’s historical performance against prior year targets and concluded that the process had been effective in establishing targets that were both aggressive and achievable. It noted that over the prior five years, Adjusted EBITDA had grown at a challenging annual growth rate and in each year had been assessed as either on target or closely approaching target.

Funding formula and individual payouts

 

    The formula correlates levels of EBITDA performance as defined above to funding/initial payout percentages. A 100% funding percentage is achieved if EBITDA performance meets the target of 7% growth. If performance falls below the minimum threshold, no payouts are funded. Funding and payouts are capped at 200%.

Performance – Payout Formula

 

  Performance Milestones   

Growth vs Prior Year     

(index %)     

    

Funding/     

Initial Payout %     

 
  Maximum      160%             200%       
  Exceptional      115%             111%       
  Target      107%             100%       
  Minimum      97%             70%       
  < Minimum      <97%             Zero       

 

 

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2016 Results

 

   

The Compensation Committee assessed the EBITDA performance growth index at 101% yielding a funding percentage of 87% and the initial payout was set at 87% of each NEO’s target bonus opportunity.

 

   

Before approving the incentive plan funding, the Compensation Committee assessed the Company’s free cash flow performance against annual plan objectives. The Compensation Committee has discretion to reduce the fund by up to 30% if free cash flow falls short of objectives. There is no discretion to increase the fund in the event that free cash flow performance exceeds objectives.

 

   

We define free cash flow as net cash provided by operating activities less capital expenditure. For a reconciliation of free cash flow to net cash provided by operating activities, see “– Executive Summary – Business Performance.”

 

   

The Compensation Committee reviewed the Company’s free cash flow performance, which was within our target range at 16.5% growth over prior year (as shown under “– Executive Summary – Business Performance” and “– 2016 Pay Decisions and Performance – Total Company Performance – Financial”). Therefore, no reduction was made to the incentive funding.

Long-term Incentives (LTI)

The purposes of long-term incentive awards are to focus executives on long-term sustainable performance and to align executive rewards with long-term returns delivered to shareholders. Currently, all long-term incentives are delivered as equity-based awards.

 

 

LTI MIX – 50% IS SUBJECT TO QUANTIFIABLE LONG-TERM PERFORMANCE

 

LOGO

Equity-based awards are made to executives, other employees and directors pursuant to the Amended and Restated Nielsen 2010 Stock Incentive Plan (the “2010 Plan”). Our goal is to provide at least 50% of the NEO pay mix in long-term equity, progressing to 60% over time, and to have approximately 50% of the LTI subject to quantifiable long-term performance metrics. Prior to finalizing award sizes, the Compensation Committee considers:

 

   

current Company financial performance and individual performance

 

   

general industry market benchmarks and peer group data provided by its compensation consultant, Meridian;

 

   

executives’ total direct compensation mix and prior year award values; and

 

   

changes in role and job responsibilities.

Long-Term Performance Plan (LTPP)

2016 Plan

LTPP participants are awarded a target number of performance RSUs that are earned subject to the Company’s performance against two cumulative 3-year performance metrics, free cash flow and relative total shareholder return, with assigned weightings of 60% and 40%, respectively. At the beginning of the performance period, the Compensation Committee assigned more weight to the free cash flow metric over which executives have relatively

 

 

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more direct control. The performance period commenced on January 1, 2016 and ends on December 31, 2018. Grants are denominated in share units and settled in Nielsen shares. Based on the performance at the end of the three-year period, executives may earn less or more than the target performance RSUs granted. Relative total shareholder return below the 30th percentile of our performance peer group or free cash flow performance below 85% of the free cash flow target will result in 0% payout for each metric. Payouts for each metric are calculated independently of each other. The maximum payout for each metric is 200%. In the case of absolute negative total shareholder return of the Company over the performance period, payments under the relative total shareholder return component of the plan are capped at 100% of target.

The table below summarizes the plan performance-payout matrix, which is unchanged from 2015. The Compensation Committee re-affirmed its belief that this design provides appropriate rigor in the ratio of performance to reward, as well as the right balance between individual risk and motivation. The free cash flow targets are intended to be aggressive and achievable and are fully aligned with our three-year strategic plan objectives and long-term guidance issued to investors.

 

  Plan Design1                                
  Milestones   

Free Cash Flow

(% to target)

    

Free Cash Flow Payout

(60% weight)

    

Relative Total
Shareholder
Return

(percentile rank)

(40% weight)

     Relative Total
Shareholder
Return Payout
 
  Maximum      120%        200%        75th        200%  
  Target      100%        100%        50th        100%  
  Minimum      85%        50%        30th        50%  
  Below Minimum      <85%        0%        <30th        0%  

 

1   The performance metrics operate independently.

Each year, the Compensation Committee reviews the peer group used to measure our relative total shareholder return under LTPP. In their review the Compensation Committee considers the following:

 

    Companies in businesses similar to Nielsen and/or representative of the markets we serve;

 

    Companies with similar economic profiles to Nielsen; and

 

    Companies with historical stock price correlation

Based on this review, the Compensation Committee did not make changes to the peer group from 2015.

 

2016 LTPP Peer Group      
Accenture plc    Moody’s Corporation
Coca-Cola Company    MSCI Inc.
Colgate-Palmolive Company    Omnicom Group, Inc.
Dun and Bradstreet Corporation    The Procter & Gamble Company
Equifax Inc.    RELX (NV) (formerly Reed-Elsevier)
Experian plc    Thomson Reuters Corporation
FactSet Research Systems Inc.    Time Warner Inc.
GfK SE    Twenty-First Century Fox, Inc.
IHS Markit Ltd.    Unilever N.V. (ADR)
IMS Health Holdings, Inc. (now QuintilesIMS Holdings, Inc.)    Viacom Inc.
The Interpublic Group of Companies, Inc.    Wolters Kluwer (NV/ADR)
McGraw Hill Financial, Inc. (now S&P Global, Inc.)    WPP plc (ADR)

 

 

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Stock Options and Restricted Stock Units

Stock option and RSU awards are intended to enhance the retention value of the equity program and align with the creation of shareholder value. Both stock options and RSUs vest over four years in equal annual installments. In 2016, the Compensation Committee provided approximately 25% of the NEO LTI values in stock options and 25% in RSUs. The remaining 50% of the LTI is delivered through Performance RSUs, as discussed on pages 44-45.

Compensation Practices and Governance

Compensation Committee

The Compensation Committee regularly reviews the philosophy and goals of the executive compensation program and assesses the effectiveness of compensation practices and processes. The Compensation Committee sets performance goals and assesses performance against these goals. The Compensation Committee considers the recommendations and market data provided by its independent consultant as well as the judgment of the CEO on the performance of his direct reports. The CEO does not participate in the Compensation Committee discussion regarding his own compensation. The Compensation Committee makes its decisions based on its assessment of both Nielsen and individual performance against goals, as well as on its judgment as to what is in the best interests of Nielsen and its shareholders.

The responsibilities of the Compensation Committee are described more fully in its charter, which is available on the Corporate Governance page of our website at www.nielsen.com/investors under Corporate Governance: Governance Documents: Compensation Committee Charter. In fulfilling its responsibilities, the Compensation Committee is entitled to delegate any or all of its responsibilities to subcommittees of the Compensation Committee. The Compensation Committee may delegate to one or more officers of the Company the authority to make grants and awards of cash or options or other equity securities to any non-Section 16 officer of the Company under the Company’s incentive-compensation or other equity-based plans as the Compensation Committee deems appropriate and in accordance with the terms of such plan; so long as such delegation is in compliance with the relevant plan and subject to the laws of England and Wales and the Company’s articles of association.

Independent Compensation Consultant

The Compensation Committee retains Meridian as its compensation consultant. Meridian has provided market data and perspective on executive and independent director compensation and related governance. Meridian and its affiliates did not provide any services to Nielsen or its affiliates in 2016 other than executive and director compensation consulting to the Compensation Committee. Discussions between Meridian and Nielsen management are limited to those necessary to complete work on behalf of the Compensation Committee.

The Compensation Committee determined that Meridian and its lead consultant for Nielsen satisfy the independence factors described in the NYSE listing rules. The Compensation Committee also determined that the work performed by Meridian in 2016 did not raise any conflict of interest.

 

 

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Benchmarking

The Compensation Committee uses the executive compensation of a peer group of companies, selected for their business relevance and size appropriateness to Nielsen, as one of many considerations when making executive compensation pay decisions. To account for differences in the size of our peer group companies, the market data are statistically adjusted to allow for valid comparisons to similarly-sized companies. The peer group information may also be supplemented by general industry survey data selected by Meridian to provide reasonable benchmarks for a company of Nielsen’s size and business type. After a review by the Compensation Committee, IMS Health Holdings, Inc. (currently known as QuintilesIMS Health Holdings, Inc) was added and DirectTV Group Holdings, LLC was removed. McGraw-Hill Financial, Inc. was retained in the peer group and is now known as S&P Global, Inc.

 

2016 Peer Group      
Adobe Systems Incorporated    IMS Health Holdings, Inc (now QuintilesIMS Holdings, Inc.)
Alliance Data Systems Corporation    The Interpublic Group of Companies, Inc.
Automatic Data Processing, Inc.    McGraw Hill Financial, Inc. (now S&P Global, Inc.)
Cognizant Technology Solutions Corporation    Moody’s Corporation
Equifax Inc.    Omnicom Group, Inc.
Experian plc    salesforce.com, inc.
Fiserv, Inc.    Thomson Reuters Corporation
IHS Markit Ltd.    Verisk Analytics, Inc.

Consideration of Risk

The Compensation Committee conducted a risk assessment of Nielsen’s 2016 pay practices, which included the review of a report from Meridian. The Compensation Committee concluded that Nielsen’s pay programs are not reasonably likely to have a material adverse effect on Nielsen, its business and its value. Specifically, the Compensation Committee noted the following:

 

   

Good balance of fixed and at-risk compensation, including a good balance of performance in LTI plans.

 

   

Overlapping vesting periods that expose management, including the CEO, to consequences of their decision-making for the period during which the business risks are likely to materialize.

 

   

EBITDA performance, a Company-wide financial metric, funds annual incentives. The Compensation Committee has discretion to reduce payouts if free cash flow targets are not met which results in shared value with shareholders.

 

   

Annual incentive plan payout curve is reasonable, including a steeper slope in the payout curve for zero or negative EBITDA growth over prior year. Payouts are capped at 200%.

 

   

A small number of associates receive commission and sales incentive payments. Nielsen management completed a review of their commission and sales incentives to ensure that they do not provide employees with an incentive to take unexpected or higher levels of risk.

 

   

Nielsen introduced a share purchase plan in 2016 which provides employees with the opportunity to purchase shares through payroll deduction. The purchase of shares aligns the interests of employees with the interests of shareholders and increases employee focus on longer-term performance.

 

   

Executive compensation is benchmarked annually.

 

   

Compensation Committee retains an independent consultant.

 

   

Significant share ownership requirements for executives and independent directors.

 

   

Nielsen has a compensation clawback policy and anti-hedging policy.

 

   

Pledging of shares subject to share ownership requirements is prohibited.

 

   

Robust code of conduct and whistleblower policy.

 

 

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Share Ownership Guidelines

To ensure strong alignment of executive interests with the long-term interests of shareholders, executives are required to accumulate and maintain a meaningful level of stock ownership in the Company. The share ownership guideline policy was adopted in June 2011.

In 2016, after a market review of our share ownership guidelines, the Compensation Committee approved a change to our policy such that guidelines would be recalculated each year using the closing share price of Nielsen stock on December 31 regardless of whether the executive already met the ownership guideline. Previously, once an executive met the share ownership guideline, an annual recalculation was not performed unless there was a change in role or compensation. In addition, the Committee approved including unvested time-based RSUs in the calculation towards meeting the share ownership guidelines.

The table below presents the guidelines and actual share ownership as of March 1, 2017 for each of our NEOs.

 

Name    Guideline        Guideline Shares1      Share Ownership2  
Mr. Barns      6 x salary          143,000        233,193  
Mr. Jackson      3 x salary          53,600        107,213  
Mr. Hasker      3 x salary          64,400        106,052  
Mr. Powell      3 x salary          53,600        102,255  
Mr. Dale      3 x salary          53,600        13,752  

 

1   The guideline shares were reset using $41.95 share price at close of market on December 31, 2016.

 

2   Eligible shares include beneficially-owned shares held directly or indirectly, jointly-owned shares and unvested RSUs.

Other Policies and Guidelines

Perquisites

We provide our NEOs with limited perquisites, reflected in the “All Other Compensation” column of the Summary Compensation Table and described in the footnotes. NEOs may claim financial planning and executive wellness expenses capped each year at $15,000 and $2,500, respectively. In very limited circumstances, we may permit NEOs and their family members to access our contractual arrangement for private aircraft for their personal use. None of the NEOs used the aircraft for personal use in 2016. In certain circumstances, where necessary for business purposes, we also provide reimbursement for relocation expenses.

Severance

We believe that severance protections play a valuable role in attracting and retaining key executive officers. Between 2007 and 2010, we offered severance protections to executives pursuant to substantially identical severance agreements connected to awards granted under our 2006 Stock Acquisition and Option Plan for Key Employees, which required executives to make substantial personal investments in the Company. Both Messrs. Barns and Hasker have entered into one of these individual severance agreements. Pursuant to the terms of their offer letters, Messrs. Jackson, Powell and Dale are entitled to receive severance upon certain terminations of employment.

The relevant severance triggering events and amounts payable are described in further detail under “– Potential Payments Upon Termination or Change-in-Control.”

Change-in-Control

For equity awards made in 2011 or later, under the 2010 Plan, as amended, unvested options and RSUs do not vest automatically in the event of a change-in-control. The treatment of unvested equity is described in further detail under “– Potential Payments Upon Termination or Change-in-Control.”

 

 

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Clawback Policy

Our clawback policy requires the Chief Executive Officer and his executive direct reports, in all appropriate cases, to repay or forfeit any bonus, short-term incentive award or amount, or long-term incentive award or amount awarded to the executive, and any non-vested equity-based awards previously granted to the executive if:

 

     LOGO   The amount of the incentive compensation was calculated based upon the achievement of certain financial results that were subsequently the subject of a restatement or the correction of a material error; and
     LOGO   The executive engaged in intentional misconduct that caused or partially caused the need for the restatement or caused or partially caused the material error; and
     LOGO   The amount of the incentive compensation that would have been awarded to the executive, had the financial results been properly reported, would have been lower than the amount actually awarded.

Other Benefits

The CEO and each other NEO are eligible to participate in the health and welfare, defined contribution 401(k), and deferred compensation plans made available, per eligibility requirements, to all employees.

Tax Implications

Section 162(m) of the Code (as interpreted by IRS Notice 2007-49) denies a federal income tax deduction for certain compensation in excess of $1 million per year paid to the chief executive officer and the three other most highly-paid executive officers (other than the Company’s chief financial officer) of a publicly-traded corporation. Certain types of compensation, including compensation based on performance criteria that are approved in advance by stockholders, are excluded from the deduction limit. In addition, “grandfather” provisions may apply to certain compensation arrangements that were entered into by a corporation before it was publicly held. The Compensation Committee’s policy is to qualify compensation paid to our executive officers for deductibility for federal income tax purposes to the extent permitted. However, to retain highly skilled executives and remain competitive with other employers, the Compensation Committee will have the right to authorize compensation that would not otherwise be deductible under Section 162(m) and to pay bonuses in any amount, including discretionary bonuses or bonuses with performance goals that are different from those under our annual incentive plan.

The annual incentive plan has been designed to permit the Compensation Committee to grant awards thereunder which are intended to qualify as “qualified performance-based compensation” under Section 162(m) of the Code.

 

 

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based upon this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (or any amendment thereto).

Submitted by the Compensation Committee of the Company’s Board of Directors:

Kathryn Marinello (Chairperson)

Harish Manwani

Vivek Ranadivé

Lauren Zalaznick

 

 

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TABLES AND NARRATIVE DISCLOSURE

Summary Compensation Table

The following table presents information regarding compensation to our NEOs for the periods indicated.

 

Name and
Principal Position
  Year    

Salary

($)

   

Bonus1

($)

   

Stock
Awards2

($)

   

Option
Awards3

($)

   

Non-Equity
Incentive Plan
Compensation4

($)

   

Change in Pension
Value and
Nonqualified
Deferred
Compensation

Earnings5

($)

   

All Other

Compensation6

($)

   

Total

($)

 
(a)   (b)     (c)     (d)     (e)     (f)     (g)     (h)     (i)     (j)  

Mitch Barns

Chief Executive Officer

    2016       1,000,000             5,737,698       1,657,089       1,700,000       3,186       24,516       10,122,489  
    2015       1,000,000             4,937,630       1,500,002       1,545,000       3,316       116,837       9,102,785  
    2014       998,462             3,407,277       1,054,680       1,365,000       7,897       124,576       6,957,892  

Jamere Jackson

Chief Financial Officer

    2016       741,154       325,000       2,124,905       607,602       680,000             7,950       4,486,610  
    2015       700,000       325,000       1,607,214       496,644       656,250             10,425       3,795,533  
    2014       565,385       1,300,000       5,217,861       486,200       562,500             118,179       8,250,125  

Steve Hasker

Chief Operating Officer

    2016       900,000             2,495,447       718,071       935,000             26,349       5,074,867  
    2015       900,000             1,644,781       509,714       750,000             29,320       3,833,815  
    2014       882,692             1,695,105       486,200       712,500             22,493       3,798,990  

James Powell

Chief Technology Officer

    2016       750,000             1,016,398
      359,036       623,000             22,788       2,771,222  

Eric J. Dale

Chief Legal Officer

    2016       750,000             1,069,441       331,416       675,000             22,950       2,848,807  

 

1   Bonus
       For Mr. Jackson, the $1,300,000 amount shown in 2014 is the initial portion (paid in connection with his hire date of March 10, 2014) of the $2,600,000 payment meant to compensate him for the loss of his unvested SERP benefit from his previous employer, and the $325,000 amount shown in years 2015 and 2016 is the amount of the annual installments he received of the remaining $1,300,000 payment (over 4 years). Mr. Jackson is required to repay each payment in full if his employment terminates within one year following its receipt unless such termination is not for “cause” or is for “good reason.”

 

2   Stock Awards
       Represents the aggregate grant date fair value of RSUs, annual incentive RSUs and performance RSUs awarded to each NEOs calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation – Stock Compensation (the “FASB ASC Topic 718”). For a discussion of the assumptions and methodologies used to value the awards reported in column (e), please see Note 13 “Stock-Based Compensation” to our audited consolidated financial statements, included in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on February 17, 2017. All numbers exclude estimates of forfeitures. No awards were subject to re-pricing or material modifications.

 

       Values for awards made in 2016:
       Performance Restricted Stock Units – Target amounts granted on February 18, 2016 under the LTPP, based on the probable outcome of the relevant performance conditions – Messrs. Barns ($3,722,693), Jackson ($1,356,122), Hasker ($1,595,425), Powell ($691,395) and Dale ($638,211). The maximum awards at the date of grant are as follows: Messrs. Barns ($5,678,763), Jackson ($2,068,689), Hasker ($2,433,733), Powell ($1,054,685) and Dale ($973,555)
       Restricted Stock Units – RSUs were granted to the NEOs on October 20, 2016 as follows: Messrs. Barns ($1,499,996), Jackson ($550,013), Hasker ($650,005), Powell ($325,003) and Dale ($299,978).
       Annual Incentive RSUs – Values represent 25% of the 2015 plan year annual incentive awards granted on February 18, 2016: Messrs. Barns ($515,010), Jackson ($218,770), Hasker ($250,016) and Dale ($131,253).

 

3   Option Awards
       Represents the aggregate grant date fair value of stock options awarded to each NEO calculated in accordance with FASB ASC Topic 718. For a discussion of the assumptions and methodologies used to value the awards reported in column (f), please see Note 13 “Stock-Based Compensation” to our audited consolidated financial statements, included in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on February 17, 2017. All numbers exclude estimates of forfeitures. No awards were subject to repricing or material modifications and no awards were subject to performance conditions.

 

4   Annual incentive amounts for performance in 2016 were paid 100% in cash on February 24, 2017.

 

5   Change in Pension Value and Nonqualified Deferred Compensation Earnings
       The amount indicated for Mr. Barns represents the actuarial change in pension value during 2016, relating to the Nielsen qualified plan and non-qualified excess plan. See “– Pension Benefits for 2016.”

 

 

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6   All Other Compensation (2016 values)
       Mr. Barns: financial planning expenses: $14,138; executive wellness expenses: $62; retirement plan contributions: $7,950; and value of dividend equivalents accrued on unvested RSUs arising from the equity award granted on July 26, 2012 prior to the introduction of our dividend policy in 2013: $2,366.
       Mr. Jackson: retirement plan contributions: $7,950.
       Mr. Hasker: financial planning expenses: $15,000; executive wellness expenses: $1,033; retirement plan contributions: $7,950; and value of dividend equivalents accrued on unvested RSUs arising from the equity award granted on July 26, 2012 prior to the introduction of our dividend policy in 2013: $2,366.
       Mr. Powell: financial planning expenses: $15,000; and retirement plan contributions: $7,788.
       Mr. Dale: financial planning expenses: $15,000; and retirement plan contributions: $7,950.

Grants of Plan-Based Awards in 2016

The following table presents information regarding grants to our NEOs during the fiscal year ended December 31, 2016.

 

         

Estimated Future Payouts

Under Non-Equity Incentive Plan Awards

         

Estimated Future Payouts

Under Equity Incentive Plan Awards

                         

Name

(a)

  Grant Date
(b)
   

    Threshold1
($)

(c)

   

Target2

($)

(d)

   

Maximum3
($)

(e)

          

Threshold4
(#)

(c)

   

Target5
(#)

(d)

   

Maximum6
(#)

(e)

   

All Other
Stock
Awards:
Number of
Shares of
Stocks or
Units

(#)

(i)

   

All Other
Options
Awards:
Number of
Securities
Underlying
Options
(#)

(j)

   

Exercise

or Base
Price of
Option
Awards
($/Sh)
(k)

   

Grant

Date
Fair Value
of Stock

and
Option
Awards7
($)

(l)

 
Mitch Barns             1,400,000       2,000,000       4,000,000                                      
    2/18/2016                                         10,763               515,010  
    2/18/2016                             36,573       73,146       146,292                   3,722,693  
      10/20/2016                                         27,752       191,571     $ 54.05       3,157,085  
Jamere Jackson             560,000       800,000       1,600,000                                      
    2/18/2016                                         4,572               218,770  
    2/18/2016                             13,323       26,646       53,292                   1,356,122  
      10/20/2016                                         10,176       70,243     $ 54.05       1,157,615  
Steve Hasker             770,000       1,100,000       2,200,000                                      
    2/18/2016                                         5,225               250,016  
    2/18/2016                             15,674       31,348       62,696                   1,595,425  
      10/20/2016                                         12,026       83,014     $ 54.05       1,368,076  
James Powell             525,000       750,000       1,500,000                                      
    2/18/2016                             6,793       13,585       27,170                   691,395  
      10/20/2016                                         6,013       41,507     $ 54.05       684,038  
Eric J. Dale             525,000       750,000       1,500,000                                      
    2/18/2016                                         2,743               131,253  
    2/18/2016                             6,270       12,540       25,080                   638,211  
      10/20/2016                                         5,550       38,314     $ 54.05       631,394  

 

1   Represents 70% of the 2016 target award under the annual incentive plan.

 

2   Represents 100% of the 2016 target award under the annual incentive plan.

 

3   Represents 200% of the 2016 target award under the annual incentive plan.

 

4   Represents 50% of the number of performance restricted stock units awarded under the LTPP.

 

5   Represents the number of performance restricted stock units awarded under the LTPP.

 

6   Represents 200% of the number of performance restricted stock units awarded under the LTPP.

 

7   Represents the grant date fair values computed in accordance with FASB ASC Topic 718 of the following awards:

 

    RSUs granted to Messrs. Barns, Jackson, Hasker and Dale on February 18, 2016, which each correspond to a value of 25% of the respective executive’s 2015 annual incentive plan cash payout

 

    The target number of performance RSUs granted under the LTPP to all NEOs on February 18, 2016, based on the probable outcomes of the relevant performance conditions.

 

    Stock option awards granted to all NEOs on October 20, 2016

 

    RSUs granted to all NEOs on October 20, 2016

 

 

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Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards in 2016 Table

Summary Compensation Table

Mr. Barns’ base salary and annual incentive target were unchanged from 2015 at $1,000,000 and $2,000,000, respectively. Based on the Compensation Committee’s full year performance assessment, Mr. Barns was awarded an annual incentive payment of $1,700,000.

Mr. Jackson’s base salary was increased from $700,000 to $750,000. His annual incentive target for 2016 remained unchanged at $800,000. Based on the Compensation Committee’s full year performance assessment, Mr. Jackson was awarded an annual incentive payment of $680,000. Additionally, Mr. Jackson received the third of five installments of the payment authorized by the Compensation Committee upon hire to compensate him for the loss of unvested SERP at his prior employer. Mr. Jackson is required to reimburse each installment in full if his employment is terminated within one year of receipt of each installment unless such termination is not for “cause” or is for “good reason”.

Mr. Hasker’s base salary was unchanged at $900,000. His annual incentive target for 2016 was increased from $950,000 to $1,100,000. Based on the Compensation Committee’s full year performance assessment, Mr. Hasker was awarded an annual incentive payment of $935,000.

Mr. Powell’s base salary and annual incentive target remained unchanged in 2016 at $750,000 each. Based on the Compensation Committee’s full year performance assessment, Mr. Powell was awarded an annual incentive payment of $623,000.

Mr. Dale’s base salary and annual incentive target remained unchanged in 2016 at $750,000 each. Based on the Compensation Committee’s full year performance assessment, Mr. Dale was awarded an annual incentive payment of $675,000.

For each NEO, approximately 50% of long-term incentive value is delivered in performance RSUs and 50% is split equally between time-based stock options and RSUs.

Grants of Plan Based Awards in 2016

Each year, the Compensation Committee reviews target LTI opportunities considering general industry market benchmarks and peer group data provided by Meridian, executives’ total direct compensation mix and prior year award values, individual role and responsibilities, Company financial performance and an assessment of each NEO’s individual performance.

On February 18, 2016 Messrs. Barns, Jackson, Hasker, and Dale were granted RSUs having a value equal to 25% of their 2015 annual incentive cash payout. The awards vest in two equal installments commencing on the anniversary of the grant date.

Each NEO was awarded performance RSUs under the LTPP on February 18, 2016.

The performance RSUs will be earned at the end of the 3-year period (January 1, 2016 – December 31, 2018) based on the Company’s performance against the plan metrics (as described under “– Long-Term Incentives (LTI) – Long-Term Performance Plan (LTPP)”).

On October 20, 2016, each NEO was granted awards of RSUs and stock options. Both RSUs and stock options time-vest ratably over four years on each anniversary of the grant date.

 

 

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Outstanding Equity Awards at 2016 Fiscal Year-End

The following table presents information regarding the outstanding equity awards held by each of our NEOs as of December 31, 2016.

 

           Option Awards            Stock Awards  
  Name   Grant
Date
    

Number of

Securities

Underlying

Unexercised

Options

Exercisable1

    

Number of

Securities

Underlying

Unexercised

Options

Unexercisable1

     Option
Exercise
Price
    

Option
Expiration

Date

          

Number of

Shares or

Units of
Stock

That
Have Not

Vested2

    

Market Value of

Shares or

Units of Stock
That Have Not
Vested2

       
             (#)      (#)      ($)                     (#)      ($)         
  Mitch Barns     3/18/2010        62,500               18.40        3/18/2020                                
    7/26/2012        80,000               27.98        7/26/2019                                
    7/25/2013                                            16,237        681,142          
    9/25/2013        35,250        11,750        36.56        9/25/2020                2,423        101,645          
    2/20/2014                                            43,500        1,824,825          
    10/29/2014        70,500        70,500        41.92        10/29/2021                12,557        526,766          
    2/12/2015                                            5,480        229,886          
    2/19/2015                                            65,860        2,762,827          
    10/29/2015        44,378        133,137        47.95        10/29/2022                24,186        1,014,603          
    2/18/2016                                            11,027        462,583          
    2/18/2016                                            73,146        3,068,475          
      10/20/2016               191,571        54.05        10/20/2023                27,955        1,172,712          
  Jamere Jackson     3/10/2014                                            43,355        1,818,742          
    3/10/2014                                            20,000        839,000          
    10/29/2014        32,500        32,500        41.92        10/29/2021                5,804        243,478          
    2/12/2015                                            2,258        94,723          
    2/19/2015                                            20,860        875,077          
    10/28/2015        14,624        43,874        48.35        10/28/2022                7,595        318,610          
    2/18/2016                                            4,684        196,494          
    2/18/2016                                            26,646        1,117,800          
      10/20/2016               70,243        54.05        10/20/2023                10,250        429,988          
  Steve Hasker     12/21/2009        23,437               16.00        12/21/2019                                
    12/21/2009        19,531               32.00        12/21/2019                                
    5/11/2011        18,750               30.19        5/11/2018                                
    7/26/2012        40,000               27.98        7/26/2019                                
    7/25/2013                                            16,237        681,142          
    9/25/2013        33,000        11,000        36.56        9/25/2020                2,423        101,645          
    2/20/2014                                            20,100        843,195          
    10/29/2014        32,500        32,500        41.92        10/29/2021                5,804        243,478          
    2/12/2015                                            2,861        120,019          
    2/19/2015                                            20,310        852,005          
    10/28/2015        15,009        45,028        48.35        10/28/2022                7,797        327,084          
    2/18/2016                                            5,353        224,558          
    2/18/2016                                            31,348        1,315,049          
      10/20/2016               83,014        54.05        10/20/2023                12,114        508,182          
  James Powell     7/23/2015                                            77,231        3,239,840          
    7/23/2015                                            14,343        601,689          
    10/28/2015        10,006        30,019        48.35        10/28/2022                5,197        218,014          
    2/18/2016                                            13,585        569,891          
      10/20/2016               41,507        54.05        10/20/2023                6,057        254,091          
  Eric J. Dale     8/3/2015                                            12,513        524,920          
    10/28/2015        9,236        27,710        48.35        10/28/2022                4,797        201,234          
    2/18/2016                                            2,810        117,880          
    2/18/2016                                            12,540        526,053          
      10/20/2016               38,314        54.05        10/20/2023                5,591        234,542          

 

 

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1   The option awards are subject to vesting schedules as follows:

        Option awards with exercise prices of $16 and $32:

    For Mr. Hasker: 25% was scheduled to vest ratably on each of December 31, 2009, 2010, 2011 and 2012. 50% of the award was subject to performance vesting based on the achievement of pre-established EBITDA targets. Performance in 2010, 2011 and 2012 did not meet the pre-established targets. Performance-based options for these years converted to time-based options and vested on December 31, 2012, 2013 and 2014, respectively.

        Option awards with an exercise price of $18.40:

    For Mr. Barns: one-third vested on each of March 18, 2011, 2012 and 2013.

        Option awards with exercise prices of $30.19, $27.98, $36.56, $41.92, $48.35, $47.95 and $54.05:

    Vest ratably on each of the four anniversaries of the grant date.

 

2   The RSU awards are subject to vesting schedules as follows:

        The July 26, 2012, September 25, 2013, March 10, 2014 (Mr. Jackson only), October 29, 2014, October 28, 2015, October 29, 2015 (Mr. Barns only) and October 20, 2016 awards time-vest ratably on each of the four anniversaries of the grant date.

        The July 25, 2013 awards are special one-time RSU grants made to Messrs. Barns, and Hasker, and time-vest 20% on each of the anniversaries of the grant date in 2014 and 2015; and 30% on each subsequent grant date anniversary in 2016 and 2017.

        The February 10, 2014 awards made to Messrs. Barns, and Hasker are restricted shares awarded under the 2013 annual incentive plan that will time-vest 50% on each of the two anniversaries of the grant date in 2015 and 2016.

        The February 20, 2014 awards made to Messrs. Barns, and Hasker are performance RSUs, which were earned in accordance with the terms of the 2014 LTPP, in February 2017.

        The March 10, 2014 award of 20,000 performance RSUs made to Mr. Jackson upon his hire date were earned in accordance with the terms of the 2014 LTPP, in February 2017.

        The February 12, 2015 awards made to Messrs. Barns, Jackson, and Hasker are RSUs awarded under the 2014 annual incentive plan that will time-vest 50% on each of the two anniversaries of the grant date in 2016 and 2017.

        The February 19, 2015 awards made to Messrs. Barns, Jackson and Hasker are performance RSUs, which will vest, if earned in accordance with the terms of the 2015 LTPP, in February 2018.

        The July 13, 2015 award made to Mr. Powell vests ratably on each of the four anniversaries of the grant date. This grant was provided in accordance with his offer letter to compensate him for equity that Mr. Powell forfeited from his previous employer.

        The July 13, 2015 award made to Mr. Powell are performance RSUs, which will vest, if earned in accordance with the terms of the 2015 LTPP, in February 2018.

         The August 3, 2015 award made to Mr. Dale are performance RSUs, which will vest, if earned in accordance with the terms of the 2015 LTPP, in February 2018.

        The February 18, 2016 awards made to all NEOs are performance RSUs, which will vest, if earned in accordance with the terms of the 2016 LTPP, in February 2019.

        The February 18, 2016 awards made to Messrs. Barns, Jackson, Hasker and Dale are RSUs awarded under the 2015 annual incentive plan that will time-vest 50% on each of the two anniversaries of the grant date in 2017 and 2018.

 

3   Market value is based on the closing price of $41.95 per share on December 30, 2016.

 

 

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Option Exercises and Stock Vested in 2016

The following table presents information regarding the value realized by each of our NEOs upon the exercise of option awards or the vesting of stock awards during the fiscal year ended December 31, 2016.

 

     Option Awards      Stock Awards  
     Number of Shares
Acquired on Exercise
     Value Realized on
Exercise
     Number of Shares
Acquired on Vesting
     Value Realized on     
Vesting     
 
     (#)      ($)      (#)      ($)       
  Name (a)    (b)      (c)      (d)      (e)       
  Mitch Barns      75,000        1,772,012        75,818        3,730,410       
  Jamere Jackson                    28,701        1,408,520       
  Steve Hasker                    60,801        3,041,119       
  James Powell                    27,124        1,494,624       
  Eric J. Dale                    1,587        70,875       

Pension Benefits for 2016

The following table presents information regarding the pension arrangements with each of our NEOs during the fiscal year ended December 31, 2016.

 

  Name    Plan Name      Number of Years
Credited Service
     Present Value of
Accumulated Benefit
    

Payments During     

Last Fiscal Year     

 
      (#)      ($)      ($)       
  (a)    (b)      (c)      (d)      (e)       
  Mitch Barns      Qualified Plan        4.42        41,029        —       
       Excess Plan        4.42        31,103        —       
  Jamere Jackson                           —       
  Steve Hasker                           —       
  James Powell                           —       
  Eric J. Dale                           —       

Assumptions for Present Value of Accumulated Benefit

Present values at December 31, 2016 are the present value of accumulated benefits as used under ASC960 and were calculated using an interest rate of 4.39% for the Qualified Plan (as defined below) benefits and 4.22% for the Excess Plan (as defined below) benefits, an interest credit rate of 3.14% and the white collar retiree RP 2014 table backed off to 2007 mortality tables projected with mortality improvements based on the MMP2007 Scale. These assumptions are consistent with those used for the financial statements of the Company’s retirement plans.

United States Retirement Plans

Effective August 31, 2006, the Company froze its United States qualified and non-qualified defined benefit retirement plans. No participants may be added and no further basic credits (described below) may accrue after this date. The retirement plans, as in existence immediately prior to the freeze, are described below.

We maintain a tax-qualified retirement plan (the “Qualified Plan”), a cash-balance pension plan that covers eligible United States employees who have completed at least one year of service. Prior to the freeze, we added monthly basic and investment credits to each participant’s account. The basic credit equaled 3% of a participant’s eligible monthly compensation. At the point of freeze, all basic credits were stopped, but participants continue to receive investment credits.

Participants became fully vested in their accrued benefits after the earlier of five years of service or when the participant reached normal retirement age (which is the later of age 65 or the fifth anniversary of the date the participant first became eligible to participate in the plan). Unmarried participants receive retirement benefits as a

 

 

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single-life annuity, and married participants receive retirement benefits as a qualified joint-and-survivor annuity. Participants can elect an alternate form of payment such as a straight-life annuity, a joint-and-survivor annuity, years certain-and-life income annuity or a level income annuity option. Lump sum payment of accrued benefits is only available if the benefits do not exceed $5,000. Payment of benefits begins at the later of the participant’s termination of employment or reaching age 40. The definition of compensation includes W-2 earnings plus deferrals minus unusual payments (e.g., stock awards, relocation and tuition reimbursement).

We also maintain a non-qualified retirement plan (the “Excess Plan”) for certain of our management and highly compensated employees. Prior to the freeze, the Excess Plan provided supplemental benefits to individuals whose benefits under the Qualified Plan are limited by the provisions of Section 415 and/or Section 401(a)(17) of the Code. The benefit payable to a participant under the Excess Plan is equal to the difference between the benefit actually paid under the Qualified Plan and the amount that would have been payable had the applicable Code limitations not applied. Although the Excess Plan is considered an unfunded plan and there is no current trust agreement for the Excess Plan, assets have been set aside in a “rabbi trust” fund. It is intended that benefits due under the Excess Plan will be paid from this rabbi trust or from the general assets of the Nielsen entity that employs the participants.

Mr. Barns is the only NEO who participates in the Qualified Plan and the Excess Plan.

Reduced early retirement benefits are available once the participant has reached age 40 and completed five years of service. Mr. Barns is eligible for early retirement. The early retirement benefits payable under both plans are actuarially reduced to be equivalent to the benefit payable at normal retirement age.

Nonqualified Deferred Compensation for 2016

The Company offers a voluntary nonqualified deferred compensation plan in the United States, which allows selected executives the opportunity to defer a significant portion of their base salary and incentive payments to a future date. Earnings on deferred amounts are determined with reference to designated mutual funds. Mr. Dale is the only NEO with a balance under this plan. Eligible employees may contribute up to 75% of their base salary and up to 90% of their annual incentive award.

The following table presents information regarding non-qualified deferred compensation arrangements with each of our NEOs during the fiscal year ended December 31, 2016.

 

     Executive
Contributions
in Last FY1
     Registrant
Contributions
in Last FY
     Aggregate
Earnings
in Last
FY2
     Aggregate
Withdrawals/
Distributions
     Aggregate
Balance
at Last
FYE
 
     ($)      ($)      ($)      ($)      ($)  
Name (a)    (b)      (c)      (d)      (e)      (f)  
Mitch Barns                                   
Jamere Jackson                                   
Steve Hasker                                   
James Powell                                     
Eric J. Dale      6,500               197               7,115  

 

1   Mr. Dale’s 2016 contribution of $6,500 was made from salary and is included in the Salary and Non-Equity Incentive Plan Compensation columns in the Summary Compensation Table.

 

2   Interest payments have not been reported in the Summary Compensation Table. Therefore, no contributions are reflected in the Summary Compensation Table.

 

 

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Potential Payments Upon Termination or Change-in-Control

The following table summarizes the circumstances under which our NEOs receive severance benefits upon termination or a change in control.

Summary of Potential Payments Upon Termination or Change in Control

 

Compensation
Element
  Change in Control  

Termination due to

Death or Disability

  Termination by the Company without
Cause or by the NEO for Good  Reason
  Retirement
Base Salary   The NEO is only entitled to base salary continuation if the NEO is terminated without cause or resigns for good reason.   N/A   Base salary continuation for one year.   N/A
Annual Incentive   The NEO is only entitled to a pro-rata portion of his or her annual incentive award for the year of termination (based on actual performance) if the NEO is terminated without cause or resigns for good reason.   N/A   A pro-rata portion of his or her annual incentive award for the year of termination (based on actual performance).   N/A
Health & Welfare Benefits   The NEO is only entitled to his or her health and welfare benefits for the NEO and his or her covered family members for the duration of the one year severance period if the NEO is terminated without cause or resigns for good reason.   N/A   Continued health and welfare benefits for the NEO and his or her covered family members for the duration of the one year severance period.   N/A
Stock Options  

All unvested options will vest upon a change in control if the acquiring entity does not agree to assume such options.

 

If the options are assumed, they will continue to vest in accordance with their terms.

 

A pro-rata portion of the options that were granted before 2015 and that are scheduled to vest on the next vesting date following the NEO’s termination will vest upon the date of termination, with such pro-rata portion determined based on the number of days the NEO was employed from the immediately preceding vesting date through the date of termination, relative to 365 days.

 

All unvested options that were granted in 2015 or after vest on the date of termination.

  A pro-rata portion of the options that are scheduled to vest on the next vesting date following the NEO’s termination will vest upon the date of termination, with such pro-rata portion determined based on the number of days the NEO was employed from the immediately preceding vesting date through the date of termination, relative to 365 days.   N/A
RSUs  

All unvested RSUs will vest upon a change in control if the acquiring entity does not agree to assume such RSUs.

 

If the RSUs are assumed, they will continue to vest in accordance with their terms.

 

A pro-rata portion of the RSUs that were granted before 2015 and that are scheduled to vest on the next vesting date following the NEO’s termination will vest upon the date of termination, with such pro-rata portion determined based on the number of days the NEO was employed from the immediately preceding vesting date through the date of termination, relative to 365 days.

 

All unvested RSUs that were granted in 2015 or after vest on the date of termination.

  A pro-rata portion of the RSUs that are scheduled to vest on the next vesting date following the NEO’s termination will vest upon the date of termination, with such pro-rata portion determined based on the number of days the NEO was employed from the immediately preceding vesting date through the date of termination, relative to 365 days.   N/A

 

 

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Compensation
Element
  Change in Control  

Termination due to

Death or Disability

  Termination by the Company without
Cause or by the NEO for Good  Reason
  Retirement
Performance Restricted Stock Units (PRSUs)  

All unvested PRSUs will vest upon a change in control (based on the target number of PRSUs subject to each outstanding award) if the acquiring entity does not agree to assume such PRSUs.

 

If the PRSUs are assumed, then they will become vested at the target level of performance (without regard to the achievement of the applicable performance criteria) on the last day of the applicable 3-year performance period, if the NEO remains employed by the Company or its successor on such date, or, if earlier, upon the NEO’s termination of employment for any reason other than by the Company or its successor for Cause or by the NEO without Good Reason (and other than due to Retirement).

 

With respect to PRSUs granted before 2015, the NEO remains eligible to earn a number of PRSUs equal to the product of (i) the total number of PRSUs that would have become vested based on the level of attainment of the applicable performance goals if the NEO had remained employed through the end of the 3-year performance period, and (ii) a fraction, the numerator of which is the number of days in the performance period that have elapsed through the date of termination, and the denominator of which is 1095.

 

All unvested PRSUs that were granted in 2015 or after vest on the date of termination (based on the target number of PRSUs subject to each outstanding award).

 

The NEO remains eligible to earn a number of PRSUs equal to the product of (i) the total number of PRSUs that would have become vested based on the level of attainment of the applicable performance goals if the NEO had remained employed through the end of the 3-year performance period, and (ii) a fraction, the numerator of which is the number of days in the performance period that have elapsed through the date of termination, and the denominator of which is 1095.

 

As described under the column headed “Change in Control,” if the termination occurs following a change in control, then all PRSUs subject to the award will vest at the target level upon such termination.

 

The NEO remains eligible to earn a number of PRSUs equal to the product of (i) the total number of PRSUs that would have become vested based on the level of attainment of the applicable performance goals if the NEO had remained employed through the end of the 3-year performance period, and (ii) a fraction, the numerator of which is the number of days in the performance period that have elapsed through the date of termination, and the denominator of which is 1095.

 

As described under the column headed “Change in Control,” if the termination occurs following a change in control, then all PRSUs subject to the award will vest at the target level upon such termination.

 

1   “Retirement” means (i) any statutorily mandated retirement date required under applicable law or (ii) such other retirement date as may be approved by the Company. On a case by case basis, the Compensation Committee may approve the continuation of vesting of unvested equity awards upon an NEO’s retirement.

The severance payments and benefits consisting of base salary continuation, pro-rata annual incentive award and health and welfare benefits continuation for Mr. Barns and Mr. Hasker are provided in the form of a Severance Agreement and for Messrs. Jackson, Powell and Dale in terms substantially defined in their offer letters. Such payments and benefits are subject to their compliance with certain restrictive covenants (as described under “–Restrictive Covenants”) and their execution (without revocation) of a general waiver and release of claims.

 

 

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EXECUTIVE COMPENSATION     

 

If, on December 31, 2016, an NEO’s employment had been terminated without cause by the Company, or an NEO had resigned for good reason, each would have received total payments and benefits as shown in the following table:

Severance Payments and Benefits

 

      Multiple of
Base Salary
   Base
Salary x
Multiple
$
   Annual
Incentive
Award
$
    

Health & Welfare
Benefits

$

  

Total     

$     

  Mitch Barns    1x    1,000,000    $ 1,700,000      7,300    2,707,300     
  Jamere Jackson    1x   

750,000

   $ 680,000      7,300    1,437,300     
  Steve Hasker    1x    900,000    $ 935,000      7,300    1,842,300     
  James Powell    1x    750,000    $ 623,000      7,300    1,380,300     
  Eric J. Dale    1x    750,000    $ 675,000      7,300    1,432,300     

In addition, under the applicable form of award agreement under the 2010 Plan, as amended, if, on December 31, 2016, an NEO’s employment had been terminated for one of the reasons set forth in the table below, the NEO would have been entitled to receive accelerated vesting and/or post-termination continued vesting with respect to the long-term incentive awards granted to such NEO prior to such date as described in the table below and the corresponding footnotes:

 

   NEO   

Termination Due to
Death or Disability

$

   

Termination by
the Company
without Cause
or the NEO for
Good Reason

$

    Retirement    
$    
 
   Mitch Barns                         
   Stock Options      16,837 (1)      16,837 (1)      —      
   RSUs      3,246,114 (2)      1,173,269 (2)      —      
   PRSUs      5,831,302 (3,4)      (4)      (4)   
   Total      9,094,253       1,190,106       —      
   Jamere Jackson                         
   Stock Options      83 (1)      83 (1)      —      
   RSUs      1,793,529 (2)      1,084,191 (2)      —      
   PRSUs      1,992,877 (3,4)      (4)      (4 )  
   Total      3,786,488       1,084,274       —      
   Steve Hasker                         
   Stock Options      15,677 (1)      15,677 (1)      —      
   RSUs      1,522,112 (2)      730,366 (2)      —      
   PRSUs      2,167,053 (3,4)      (4)      (4 )  
   Total      3,704,842       746,043       —      
   James Powell                         
   Stock Options      (1)      (1)      —      
   RSUs      3,711,946 (2)      498,313 (2)      —      
   PRSUs      1,171,580 (3)      (4)      (4 )  
   Total      4,883,525       498,313       —      
   Eric J. Dale                         
   Stock Options      (1)      (1)      —      
   RSUs      553,656 (2)      140,867 (2)      —      
   PRSUs      1,050,973 (3)      (4)      (4)   
   Total      1,604,629       140,867       —      

 

 

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1   The amount shown is calculated by multiplying (a) the total number of unvested options held by the NEO on December 31, 2016 that would have been accelerated on that date, as described in the “Summary of Potential Payments Upon Termination or Change in Control” table by (b) the difference between (i) $41.95, which was the closing price of a common share of the Company on December 30, 2016 and (ii) the applicable exercise price of the unvested options.

 

2   The amount shown is calculated by multiplying (a) the total number of unvested RSUs held by the NEO on December 31, 2016 that would have been accelerated on that date, as described in the “Summary of Potential Payments Upon Termination or Change in Control” table by (b) $41.95, which was the closing price of a common share of the Company on December 30, 2016.

 

3   The amount shown is calculated by multiplying (a) the total target number of unvested PRSUs that were granted in 2015 or after, held by the NEO on December 31, 2016 that would have been accelerated on that date, as described in the “Summary of Potential Payments Upon Termination or Change in Control” table by (b) $41.95, which was the closing price of a common share of the Company on December 30, 2016.

 

4   No amount has been included for the pro-rata portion of the PRSUs that continue to be eligible to vest because as of the date hereof, it is not known if, or at what level, the applicable performance metrics will be achieved. If such termination had occurred following a change in control the PRSUs would have vested at target. For these amounts, see table below “Accelerated Vesting of Equity Awards if Not Assumed in Change in Control”.

 

 

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In addition, on a change-in-control, if the acquiring entity does not assume the awards or provide for the issuance of substitute awards on an equitable basis, any unvested options or RSUs granted in 2013, 2014, 2015 and 2016 under the 2010 Plan, as amended, would become vested and exercisable in full, and any unearned, unvested performance RSUs under the LTPP would become vested at 100% of the target award. As of December 31, 2016, the value of any accelerated vesting of options and RSUs would be as set forth in the following table.

Accelerated Vesting of Equity Awards if Not Assumed in Change in Control

 

  Name   Grant
Date
    Unvested Options     Exercise Price     Unvested RSUs     LTPP    

Fair

Market

Value as of
12/30/2016

   

Value of     

Accelerated     
Unvested Options &     

RSUs & LTPP     

 
  Mitch Barns     7/25/2013                   16,237             $ 41.95     $ 681,142       
    9/25/2013       11,750       36.56                     $ 41.95     $ 63,333       
    9/25/2013                       2,423             $ 41.95     $ 101,645       
    2/20/2014                           43,500     $ 41.95     $ 1,824,825       
    10/29/2014       70,500       41.92                     $ 41.95     $ 2,115       
    10/29/2014                       12,557             $ 41.95     $ 526,766       
    2/12/2015                   5,480             $ 41.95     $ 229,886       
    2/19/2015                           65,860     $ 41.95     $ 2,762,827       
    10/29/2015       133,137       47.95                     $ 41.95     $ 0       
    10/29/2015                       24,186             $ 41.95     $ 1,014,603       
    2/18/2016                   11,027             $ 41.95     $ 462,583       
    2/18/2016                         73,146     $ 41.95     $ 3,068,475       
    10/20/2016       191,571       54.05                     $ 41.95     $ 0       
    10/20/2016                       27,955             $ 41.95     $ 1,172,712       
                                                    $ 11,910,911       
  Jamere Jackson     3/10/2014                   43,355             $ 41.95     $ 1,818,742       
    3/10/2014                           20,000     $ 41.95     $ 839,000       
    10/29/2014       32,500       41.92                     $ 41.95     $ 975       
    10/29/2014                       5,804             $ 41.95     $ 243,478       
    2/12/2015                   2,258             $ 41.95     $ 94,723       
    2/19/2015                           20,860     $ 41.95     $ 875,077       
    10/28/2015       43,874       48.35                     $ 41.95     $ 0       
    10/28/2015                       7,595             $ 41.95     $ 318,610       
    2/18/2016                   4,684             $ 41.95     $ 196,494       
    2/18/2016                           26,646     $ 41.95     $ 1,117,800       
    10/20/2016       70,243       54.05                     $ 41.95     $ 0       
    10/20/2016                       10,250             $ 41.95     $ 429,988       
                                                    $ 5,934,886       
  Steve Hasker     7/25/2013                   16,237             $ 41.95     $ 681,142       
    9/25/2013       11,000       36.56                     $ 41.95     $ 59,290       
    9/25/2013                       2,423             $ 41.95     $ 101,645       
    2/20/2014                           20,100     $ 41.95     $ 843,195       
    10/29/2014       32,500       41.92                     $ 41.95     $ 975       
    10/29/2014                       5,804             $ 41.95     $ 243,478       
    2/12/2015                   2,861             $ 41.95     $ 120,019       
    2/19/2015                           20,310     $ 41.95     $ 852,005       
    10/28/2015       45,028       48.35                     $ 41.95     $ 0       
    10/28/2015                       7,797             $ 41.95     $ 327,084       
    2/18/2016                   5,353             $ 41.95     $ 224,558       
    2/18/2016                           31,348     $ 41.95     $ 1,315,049       
    10/20/2016       83,014       54.05                     $ 41.95     $ 0       
    10/20/2016                       12,114             $ 41.95     $ 508,182       
                                                    $ 5,276,622       

 

 

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EXECUTIVE COMPENSATION

 

  Name   Grant
Date
    Unvested Options     Exercise Price     Unvested RSUs     LTPP    

Fair

Market

Value as of
12/30/2016

   

Value of     

Accelerated     
Unvested Options &     

RSUs & LTPP     

 
  James Powell     7/23/2015                   77,231             $ 41.95     $ 3,239,840       
    7/23/2015                           14,343     $ 41.95     $ 601,689       
    10/28/2015       30,019       48.35                     $ 41.95     $ 0       
    10/28/2015                       5,197             $ 41.95     $ 218,014       
    2/18/2016                           13,585     $ 41.95     $ 569,891       
    10/20/2016       41,507       54.05                     $ 41.95     $ 0       
    10/20/2016                       6,057             $ 41.95     $ 254,091       
                                                    $ 4,883,525       
  Eric J. Dale     8/3/2015                           12,513     $ 41.95     $ 524,920       
    10/28/2015       27,710       48.35                     $ 41.95     $ 0       
    10/28/2015                       4,797             $ 41.95     $ 201,234       
    2/18/2016                   2,810             $ 41.95       117,880       
    2/18/2016                           12,540     $ 41.95     $ 526,053       
    10/20/2016       38,314       54.05                     $ 41.95     $ 0       
    10/20/2016                       5,591             $ 41.95     $ 234,542       
                                                    $ 1,604,629       

Restrictive Covenants

Pursuant to the severance agreements of Messrs. Barns and Hasker, and in the case of Messrs. Jackson, Powell, and Dale pursuant to the terms of restrictive covenant agreements executed in conjunction with their offer letters, they have agreed not to disclose any Company confidential information at any time during or after their employment with Nielsen. In addition, they have agreed that, for the duration of their severance period following a termination of their employment with Nielsen, they will not solicit Nielsen’s employees or customers or materially interfere with any of Nielsen’s business relationships. They have also agreed not to act as an employee, investor or in another significant function in any business that directly or indirectly competes with any business of the Company.

 

 

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In accordance with the requirements of Section 14A of the Exchange Act (which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act) and the related rules of the SEC, we are submitting for shareholder consideration a separate resolution to determine, on a non-binding, advisory vote, whether a shareholder vote to approve the compensation of our named executive officers (that is, similar to Proposal No. 5 in this proxy statement) should occur every one, two or three years.

A non-binding, advisory vote to determine the frequency of the shareholder vote on executive compensation is required at least every six years. The last one occurred at the 2011 annual general meeting. At such time, a majority of the shareholders voted that the non-binding, advisory vote on executive compensation should occur every three years. However, the Board subsequently decided to propose, and has proposed, at each annual general meeting of shareholders the approval of the compensation of our named executive officers.

After careful consideration, our Board has determined that an advisory vote on executive compensation that occurs every year is the most appropriate policy for Nielsen at this time, and, therefore, our Board recommends that you vote for future advisory votes on executive compensation to occur each year.

In formulating its recommendation, our Board recognized that the Company’s executive compensation programs are designed to promote a long-term connection between pay and performance. However, because executive compensation disclosures are made annually, the Board considered that an annual advisory vote on executive compensation allows our shareholders to provide us with their direct input on our compensation philosophy, policies and practices as disclosed in the proxy statement every year. Additionally, an annual advisory vote on executive compensation is consistent with our policy of seeking input from, and engaging in discussions with, our shareholders on corporate governance matters and our executive compensation philosophy, policies and practices. We understand that our shareholders may have different views as to what is the best approach for Nielsen, and we look forward to hearing from our shareholders on this proposal. Finally, we recognize that the widely adopted standard among public companies listed in the United States is to adopt an annual advisory vote on executive compensation.

While the results of this vote are non-binding and advisory in nature, our Board intends to carefully consider them. You will have four options to vote: one year, two years, three years or abstain. In the event no option receives a majority of the votes cast, the Board intends to consider the option that receives the most votes. However, the Board may in the future decide to conduct a vote on executive compensation on a more or less frequent basis and may vary its practice based on factors such as discussions with shareholders and the adoption of material changes to the executive compensation programs.

The Board of Directors recommends that shareholders vote “ONE YEAR” with respect to how frequently a non-binding, advisory shareholder vote to approve the compensation of the Company’s named executive officers should occur.

 

 

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In accordance with the requirements of the UK Companies Act 2006, the UK Annual Report and Accounts contains:

 

1. a statement by the Chairperson of the Compensation Committee of the Board of Directors (the “Chairperson’s Statement”);

 

2. an abridged version of the directors’ compensation policy (the “Directors’ Compensation Policy”) approved by the shareholders at the Company’s 2016 annual general meeting of the shareholders; and

 

3. the annual report on directors’ compensation (the “Annual Report on Directors’ Compensation”), setting out directors’ compensation for the year ended December 31, 2016.

The Chairperson’s Statement and the Annual Report on Directors’ Compensation (collectively the “Directors’ Compensation Report”) is reproduced in Annex A to this proxy statement. An annual non-binding advisory shareholder vote is required on the Directors’ Compensation Report. While the results of this vote are non-binding and advisory in nature (which means the Director’s entitlements to compensation are not conditional upon the resolution being passed), the Board intends to carefully consider the results of this vote. The affirmative vote of a majority of the votes cast at the Annual Meeting is required to approve this proposal.

No vote is necessary at the Annual Meeting regarding the Directors’ Compensation Policy (which is reproduced in Annex B to this proxy statement and in the Directors’ Remuneration Report of the UK Annual Report and Accounts) as shareholders approved the Directors’ Compensation Policy at our 2016 annual general meeting and the policy is not proposed to be amended. In the absence of any changes to the Directors’ Compensation Policy, the prior approval of the Directors’ Compensation Policy is valid for three financial years (i.e., until December 31, 2019), which date is the latest by which the Company would be required to pass a further shareholder resolution to approve its Directors’ Compensation Policy. It is intended that, unless required earlier, the Company’s shareholders will next be asked to approve the Directors’ Compensation Policy at the 2019 annual meeting of shareholders.

 

LOGO   The Board of Directors recommends that the shareholders vote “FOR” the approval of the Directors’ Compensation Report (items 1 and 3 above).

 

 

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This section is provided in accordance with applicable SEC rules. The Compensation Committee reviews director compensation. The Committee’s objectives are to compensate our directors in a manner that attracts and retains highly qualified directors and aligns their interests with those of our long-term shareholders.

In 2016, the Committee engaged its independent compensation advisory firm, Meridian, to assist the Committee in its review of the competitiveness and structure of the Company’s compensation to independent directors. This review included a benchmark of our director compensation against 20 companies, including the companies that our Compensation Committee examines as a source of benchmarking data when examining the competitiveness of our executive compensation practices. The Compensation Committee did not recommend a change to the form or amount of director compensation at this time.

 

 

DIRECTOR COMPENSATION FOR THE 2016 FISCAL YEAR

The following table provides information on the 2016 compensation of non-management directors who served for all or a part of 2016. We also reimburse directors for reasonable out-of-pocket expenses attendant to their Board service.

 

  Name       

Fees Earned

or Paid in

Cash

($)

 

 

1 

 

      

Stock Awards

($)

1 

 

      

Total

($)

 

 

  James A. Attwood Jr.                 390,000          390,000  
  David L. Calhoun2                 284,753          284,753  
  Karen M. Hoguet                 265,000          265,000  
  James M. Kilts        80,000          160,000          240,000  
  Harish Manwani        80,000          160,000          240,000  
  Kathryn Marinello                 240,000          240,000  
  Alexander Navab3                           
  Robert C. Pozen                 255,000          255,000  
  Vivek Ranadivé                 240.000          240,000  
  Javier G. Teruel        100,000          160,000          260,000  
  Lauren Zalaznick                 220,000          220,000  

 

1   In 2016, each of our independent directors were entitled to receive an annual cash retainer of $80,000. Chairpersons of the Audit Committee, the Compensation Committee and the Nomination and Corporate Governance Committee were entitled to additional annual compensation of $25,000, $20,000 and $15,000, respectively. Commencing January 1, 2016, a Board Chairperson fee has been implemented in the amount of $150,000, with half that amount to be paid in quarterly installments in cash and the other half to be paid in quarterly installments in the form of Deferred Stock Units (“DSUs”).

 

     Also, in 2016, independent directors were entitled to annual equity grants in the form of DSUs with a fair market value of $160,000, A DSU represents an unfunded and unsecured right to receive one Nielsen share following the termination of the director’s service with Nielsen. DSUs are granted at fair market value on the grant date and vest in four substantially equal quarterly installments. DSUs accrue dividend equivalents (in the form of additional DSUs).

 

     All cash fees are payable quarterly unless the director elects to defer the receipt of their cash payments into DSUs.

 

    

Pursuant to the directors’ deferred compensation plan, Messrs. Attwood, Calhoun, Pozen and Ranadivé and Mses. Hoguet, Marinello and Zalaznick elected to defer 100% of their cash Board and committee fees in 2016 into DSUs. The number of DSUs credited to the director’s DSU account in lieu of his or her quarterly fees is based on the closing trading price of a Nielsen share on the date the cash fees would otherwise be payable. The dollar value of fees deferred into DSUs in 2016 for Mses. Hoguet, Marinello and Zalaznick and Messrs. Pozen, Calhoun, Ranadivé and Attwood was $105,000, $80,000, $60,000, $95,000, $80,000, $80,000 and $230,000, respectively. These amounts include regular Board and committee chairperson fees for

 

 

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each such director. Amounts in the “Stock Awards” column also include the dollar value of the annual DSU grant made to each director in May 2016 of $160,000 for services to be performed from May 2016 through April 2017. The dollar amount shown in the “Stock Awards” column represents the aggregate grant date fair value of DSUs calculated in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. Ms. Zalaznick commenced receiving fees on April 1, 2016. Mr. Calhoun received a prorated DSU grant reflecting service from January 1, 2016 to April 30, 2016.

 

2   In connection with his departure as the Company’s Chief Executive Officer and his appointment as the Executive Chairman of the Company’s Board of Directors effective January 1, 2014, the Company entered into a Transition Agreement with Mr. Calhoun, dated as of November 5, 2013, which provided for the right of Mr. Calhoun to earn certain compensation granted to him in his position as Chief Executive Officer. Mr. Calhoun stepped down as Chairman of the Company’s Board effective December 31, 2015, but he continued to serve as a director. He commenced receiving fees as a director effective January 1, 2016. He will not stand for re-election at the Annual Meeting.

 

3   Resigned from the Board effective January 11, 2016.

Each of Ms. Hoguet and Messrs. Calhoun, Pozen, Ranadivé and Teruel had an aggregate of 31,120, 600,000, 40,335, 4,941 and 34,172 options to acquire our shares, respectively, outstanding on December 31, 2016. Also on that date, each of Mses. Hoguet, Marinello and Zalaznick and Messrs. Attwood, Calhoun, Kilts, Manwani, Pozen, Ranadivé and Teruel had an aggregate of 22,474, 10,928, 3,572, 10,696, 4,914, 6,535, 6,348, 22,020, 21,518 and 17,094 DSUs, respectively, which comprise DSUs received in lieu of cash Board fees, DSUs awarded annually under the equity plan and dividend equivalents accrued in the form of DSUs (as described above). Of these DSU amounts, 776, 776, 776, 776, 1,015, 776, 776, 776, 776, and 776, respectively, were not vested as of December 31, 2016. Each of Ms. Hoguet and Messrs. Pozen and Teruel had on December 31, 2016 an aggregate of 4,000, 10,364 and 3,855 of our shares, respectively, received in lieu of cash Board fees or otherwise granted to them by the Company during their tenure as directors.

Share Ownership Guidelines

In June 2011, our Board adopted share ownership guidelines pursuant to which directors who receive fees for their service are required to maintain equity ownership in our Company equivalent to at least five times their annual cash fees. Shares beneficially owned by these directors, including vested and unvested DSUs and jointly-owned shares, are included in the calculation. Directors are expected to meet these guidelines within five years from the later of the adoption of the guidelines, their appointment as a director or the commencement of the receipt of director fees. The guidelines and share ownership for this purpose as of February 28, 2017 are set forth below.

 

        Guideline Shares        Share Ownership  
  Mr. Attwood        27,000          31,472  
  Mr. Calhoun        10,000          736,921  
  Ms. Hoguet        13,000          27,250  
  Mr. Kilts        10,000          7,311 1 
  Mr. Manwani        10,000          7,124 2 
  Ms. Marinello        12,000          11,704 3 
  Mr. Pozen        11,000          222,060  
  Mr. Ranadivé        10,000          22,294  
  Mr. Rawlinson        10,000          844 4 
  Mr. Teruel        10,000          21,725  
  Ms. Zalaznick        10,000          4,348 5 

 

1   Mr. Kilts has until 1/1/2020 to be in compliance with our stock ownership guidelines.

 

2   Mr. Manwani has until 1/22/2020 to be in compliance with our stock ownership guidelines.

 

3   Ms. Marinello has until 11/1/2019 to be in compliance with our stock ownership guidelines. Ms. Marinello will not stand for re-election.

 

4   Mr. Rawlinson has until 2/8/2022 to be in compliance with our stock ownership guidelines.

 

5   Ms. Zalaznick has until 4/28/2021 to be in compliance with our stock ownership guidelines.

 

 

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The following table sets forth equity compensation plan information regarding options to acquire the Company’s shares, restricted stock units, deferred stock units and performance restricted shares at December 31, 2016.

 

Plan category

 

   Number of securities to be
issued upon exercise of
outstanding options and
rights
    Weighted-average
exercise price of
outstanding options
and rights
    

Number of securities remaining
available for future

issuance under

equity compensation plans
(excluding securities reflected
in column (a))

 
   (a)     (b)      (c)  
Equity compensation plans approved by security holders1      10,613,165 2      40.19        8,726,779  
Equity compensation plans not approved by security holders      0       0        0  
Total      10,613,165 2      40.19        8,726,779  

 

1   These shares may be issued pursuant to the 2010 Plan, as it may be amended from time to time.

 

2   Includes 1,459,661 restricted stock units, 129,394 deferred stock units and 865,942 performance restricted shares.

 

 

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The following table sets forth certain information regarding beneficial ownership of Nielsen’s shares as of March 1, 2017 (except as indicated in the footnotes) with respect to:

 

   

each person or group of affiliated persons known by Nielsen to own beneficially more than 5% of our outstanding shares of any class, together with their addresses;

 

   

each of Nielsen’s directors;

 

   

each of Nielsen’s Named Executive Officers; and

 

   

all directors and nominees and executive officers as a group.

Percentage computations are based on 357,375,091 of our shares outstanding as of March 1, 2017.

 

                                                             
     Nielsen Shares Beneficially Owned  
Name of Beneficial Owner    Number      Percentage  
The Vanguard Group, Inc.1      32,811,710        9.2
BlackRock, Inc.2      28,932,128        8.1
Capital Research Global Investors3      27,723,831        7.8
GIC Private Limited4      20,589,362        5.8
James A. Attwood, Jr.5      30,696        *  
David L. Calhoun6      1,106,144        *  
Karen M. Hoguet7      57,594        *  
James M. Kilts8      6,536        *  
Harish Manwani9      6,348        *  
Kathryn V. Marinello10      10,928        *  
Robert Pozen11      261,620        *  
Vivek Ranadivé12      26,459        *  
David Rawlinson13      0           
Javier G. Teruel14      55,122        *  
Lauren Zalaznick15      3,572        *  
Mitch Barns16      436,947        *  
Jamere Jackson17      84,991        *  
Steve Hasker18      241,227        *  
Eric J. Dale19      11,194           
James Powell20      23,776           
All Directors and Executive Officers as a group (19 persons)21      2,394,895        .67

 

*   less than 1%

 

1   Based on the Schedule 13G filed by The Vanguard Group, Inc. on February 10, 2017, The Vanguard Group, Inc. has sole voting power with respect to 534,598 of our shares, shared voting power with respect to 60,729 of our shares, sole investment power with respect to 32,216,790 of our shares and shared investment power with respect to 594,920 of our shares, including 435,891 shares which are also beneficially owned by Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc., as a result of its serving as investment manager of collective trust accounts, and 257,736 shares beneficially owned by Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of The Vanguard Group, Inc., as a result of its serving as investment manager of Australian investment offerings. The address of The Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, PA 19355.

 

2   Based on the Schedule 13G filed by BlackRock, Inc. on January 25, 2017, BlackRock, Inc. has sole voting power with respect to 26,076,826 of our shares, sole investment power with respect to 28,904,863 of our shares, and shared voting power and shared investment power with respect to 27,265 of our shares. The address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.

 

3   Based on the Schedule 13G filed by Capital Research Global Investors on February 13, 2017, Capital Research Global Investors has sole voting power and sole investment power with respect to the shares it holds in Nielsen. The address of Capital Research Global Investors is 333 South Hope Street, Los Angeles, CA 90071.

 

 

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OWNERSHIP OF SECURITIES   

 

 

4   Based on the Schedule 13G filed by GIC Private Limited on January 25, 2017, GIC Private Limited has sole voting power and sole investment power with respect to 13,398,368 of our shares and shared voting power and shared investment power with respect to 7,190,994 of our shares. The address of GIC Private Limited is 168, Robinson Road #37-01, Capital Tower, Singapore 068912.

 

5   Of the shares shown as beneficially owned, 10,696 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 1, 2017 and amounts that vest within 60 days thereafter.

 

6   Of the shares shown as beneficially owned, 600,000 represent rights to acquire shares through the exercise of options and 4,913 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 1, 2017 and amounts that vest within 60 days thereafter.

 

7   Of the shares shown as beneficially owned, 31,120 represent rights to acquire shares through the exercise of options and 22,474 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 1, 2017 and amounts that vest within 60 days thereafter.

 

8   Of the shares shown as beneficially owned, 6,536 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 1, 2017 and amounts that vest within 60 days thereafter.

 

9   Of the shares shown as beneficially owned, 6,348 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 1, 2017 and amounts that vest within 60 days thereafter.

 

10   Of the shares shown as beneficially owned, 10,928 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 1, 2017 and amounts that vest within 60 days thereafter.

 

11   Of the shares shown as beneficially owned, (a) 40,335 represent rights to acquire shares through the exercise of options, (b) 22,021 represent rights to receive shares upon the payout of vested deferred stock units and (c) 18,600 shares are owned by a charitable foundation for which Mr. Pozen and his spouse are trustees with investment power. Includes amounts vested as of March 1, 2017 and amounts that vest within 60 days thereafter.

 

12   Of the shares shown as beneficially owned, 4,941 represent rights to acquire shares through the exercise of options and 21,518 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 1, 2017 and amounts that vest within 60 days thereafter.

 

13   Mr. Rawlinson became a director on February 8, 2017.

 

14   Of the shares shown as beneficially owned, 34,172 represent rights to acquire shares through the exercise of options and 17,095 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 1, 2017 and amounts that vest within 60 days thereafter.

 

15   Ms. Zalaznick became a director on April 28, 2016. Of the shares shown as beneficially owned, 3,572 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 1, 2017 and amounts that vest within 60 days thereafter.

 

16   Of the shares shown as beneficially owned, 292,628 represent rights to acquire shares through the exercise of options. Includes amounts vested as of March 1, 2017 and amounts that vest within 60 days thereafter.

 

17   Of the shares shown as beneficially owned, 47,124 represent rights to acquire shares through the exercise of options. Includes amounts vested as of March 1, 2017 and amounts that vest within 60 days thereafter.

 

18   Of the shares shown as beneficially owned, 182,227 represent rights to acquire shares through the exercise of options. Includes amounts vested as of March 1, 2017 and amounts that vest within 60 days thereafter.

 

19   Of the shares shown as beneficially owned, 9,236 represent rights to acquire shares through the exercise of options. Includes amounts vested as of March 1, 2017 and amounts that vest within 60 days thereafter.

 

20   Of the shares shown as beneficially owned, 10,006 represent rights to acquire shares through the exercise of options. Includes amounts vested as of March 1, 2017 and amounts that vest within 60 days thereafter.

 

21   Of the shares shown as beneficially owned, 1,263,216 represent rights to acquire shares through the exercise of options. Includes amounts vested as of March 1, 2017 and amounts that vest within 60 days thereafter.

 

 

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Section 16(a) of the Exchange Act requires our executive officers, directors, persons who own more than 10% of a registered class of our equity securities and certain entities associated with the foregoing (the “Reporting Persons”) to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC. Reporting Persons are required by SEC rules to furnish us with copies of all Forms 3, 4 and 5, and amendments thereto, that they file with the SEC.

Based solely on our review of copies of such reports and written representations from the Reporting Persons, we believe that the Reporting Persons complied with all Section 16(a) filing requirements during 2016, except that we failed to file on a timely basis one Form 4 for two transactions on behalf of Mr. Calhoun.

 

LOGO

 

 

REVIEW, APPROVAL OR RATIFICATION OF CERTAIN TRANSACTIONS WITH RELATED PERSONS

We have adopted a written Related Person Transaction Policy which requires that all Related Person Transactions (defined as all transactions that would be required to be disclosed pursuant to Item 404(a) of Regulation S-K in which the Company was or is to be a participant and the amount involved exceeds $120,000 and in which any Related Person (defined as any person described in paragraph (a) of Item 404 of Regulation S-K) will have a direct or indirect material interest) be approved or ratified by a committee of the Board composed solely of independent directors who are disinterested or by the disinterested members of the Board.

 

 

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If any shareholder wishes to propose a matter for consideration at our 2018 annual general meeting of shareholders under the SEC’s shareholder proposal rule (Rule 14a-8(e) of the Exchange Act), the proposal should be mailed by certified mail return receipt requested, to the Company Secretary, Nielsen Holdings plc, 40 Danbury Road, Wilton, Connecticut 06897. To be eligible under the SEC’s shareholder proposal rule for inclusion in our 2018 annual general meeting proxy statement and form of proxy, the proposal must be received by the Company Secretary on or before December 7, 2017.

Shareholder(s) meeting the requirements of the UK Companies Act 2006 and our articles of association are able to propose a resolution to be considered at the 2018 annual general meeting. In order to do so, the qualifying shareholder(s) must adhere to certain procedural requirements set out in the UK Companies Act 2006 and our articles of association, including notifying us in writing of such proposed resolution at least six weeks prior to the 2018 annual general meeting or, if later, the time the notice of the 2018 annual general meeting is given. Such written notification must identify the proposed resolution and must be authorized by the person(s) making it. The notification may be delivered in hard copy form to the Company Secretary at 40 Danbury Road, Wilton, Connecticut 06897 or in hard copy or electronically to our Investor Relations department, whose contact information is available on our website, www.nielsen.com/investors, under Contact Us. We may decide to include such proposed resolution in the proxy statement or circulate it separately. In addition, we may decide not to circulate a resolution proposed by shareholder(s) at the meeting that would be ineffective (whether by reason of inconsistency with any enactment or our articles of association) or is otherwise defamatory, frivolous or vexatious.

 

LOGO

SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and notices with respect to two or more shareholders sharing the same address by delivering a single proxy statement or a single notice addressed to those shareholders. This process, which is commonly referred to as “householding,” provides cost savings for companies. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, or if your household is receiving multiple copies of these documents and you wish to request that future deliveries be limited to a single copy, please notify your broker. You can also request, and the Company will promptly deliver, a separate copy of the notice or the proxy materials by contacting the Company Secretary, Nielsen Holdings plc, 40 Danbury Road, Wilton, Connecticut 06897; telephone number, (203) 563-3500.

 

 

LOGO

Available at www.proxyvote.com (use the 16-digit control number included on your Notice or proxy card) and at www.nielsen.com/investors.

 

 

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We filed our Annual Report on Form 10-K for the year ended December 31, 2016 with the SEC on February 17, 2017. All of our filings that are made electronically with the SEC, including Forms 10-K, 10-Q and 8-K, are available free of charge on our website, www.nielsen.com/investors under SEC Filings. Copies of our Annual Report on Form 10-K for the year ended December 31, 2016, including financial statements and schedules thereto, filed with the SEC, are also available without charge to shareholders upon written request addressed to:

Company Secretary

40 Danbury Road,

Wilton, Connecticut 06897

 

LOGO

The Board does not know of any other matters to be brought before the meeting. If other matters are presented, the proxy holders have discretionary authority to vote all proxies in accordance with their best judgment.

By Order of the Board of Directors,

LOGO

Emily Epstein

Company Secretary

 

 

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The following questions and answers are intended to address briefly some commonly asked questions regarding our Annual Meeting. They may not address all questions that may be important to you. Please refer to the more detailed information contained elsewhere in this proxy statement, its annexes and the documents referred to in this proxy statement for more information.

 

 

Q: WHY AM I BEING PROVIDED WITH THESE PROXY MATERIALS?

 

A: We are providing these proxy materials to you in connection with the solicitation by the Board of proxies to be voted at our Annual Meeting, and at any postponements or adjournments of the Annual Meeting. A Notice of Annual General Meeting of Shareholders required under the UK Companies Act 2006 is also included in this proxy statement. We have either (1) delivered to you a Notice and made these proxy materials available to you on the Internet or (2) delivered printed versions of these materials, including a proxy card, to you by mail. We encourage you to read the proxy statement carefully.

 

 

Q: WHY DID I RECEIVE A ONE-PAGE NOTICE IN THE MAIL REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS INSTEAD OF A FULL SET OF PROXY MATERIALS?

 

A: Pursuant to SEC rules, we have elected to provide shareholders access to our proxy materials over the Internet. We believe that this e-proxy process will expedite our shareholders’ receipt of proxy materials and lower the costs, and reduce the environmental impact, of our Annual Meeting. Accordingly, we sent a Notice on or about April 6, 2017 to shareholders of record entitled to vote at the Annual Meeting. All shareholders will have the ability to access the proxy materials on a website referred to in the Notice and to download printable versions of the proxy materials or to request and receive a printed set of the proxy materials from us. Instructions on how to access the proxy materials over the Internet or to request a printed copy from us may be found on the Notice. We encourage you to read the proxy statement carefully.

 

 

Q: WHAT WILL I NEED IN ORDER TO ATTEND THE ANNUAL MEETING?

 

A: We will be hosting the Annual Meeting live via the Internet. There is no physical meeting location for the Annual Meeting. Any shareholder can attend the Annual Meeting live via the Internet at nielsen.onlineshareholdermeeting.com. The webcast will start at 9:00 a.m. (Eastern Time) on May 23, 2017. You will need your 16-digit control number included on your Notice or proxy card in order to be able to enter the Annual Meeting. Instructions on how to attend and participate via the Internet are posted at www.proxyvote.com (before the meeting) and nielsen.onlineshareholdermeeting.com (during the meeting). Shareholders may vote and ask questions while attending the Annual Meeting via the Internet. However, shares held through Nielsen’s 401(k) plan cannot be voted online at the Annual Meeting.

 

 

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GENERAL INFORMATION AND FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING

 

 

 

Q: WHAT AM I VOTING ON?

 

A: You are being asked to vote on the following proposals scheduled to be voted on at the Annual Meeting:

 

  LOGO To elect or re-elect the Directors of the Board as listed herein;

 

  LOGO To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2017;

 

  LOGO To reappoint Ernst & Young LLP as the Company’s UK statutory auditor to audit the Company’s UK statutory annual accounts for the year ending December 31, 2017 and to hold office from the completion of this Annual Meeting until the completion of the next general meeting of the shareholders at which the UK statutory accounts are presented;

 

  LOGO To authorize the Audit Committee to determine the compensation of Ernst & Young LLP in its capacity as the Company’s UK statutory auditor;

 

  LOGO To approve on a non-binding, advisory basis the compensation of the Company’s named executive officers as disclosed in the proxy statement pursuant to the SEC rules;

 

  LOGO To determine on a non-binding, advisory basis whether a shareholder vote to approve the compensation paid to the Company’s named executive officers should occur every one, two or three years; and

 

  LOGO To approve on a non-binding, advisory basis the Directors’ Compensation Report for the year ended December 31, 2016, which is set out in the UK Annual Report and Accounts and this proxy statement.

Shareholders may also be asked to consider such other business as may properly come before the Annual Meeting or any adjournments or postponement thereof.

 

 

Q: WHO IS ENTITLED TO VOTE?

 

A: Holders of shares in the Company as of the close of business on March 24, 2017, the record date, may vote at the Annual Meeting.

 

 

Q: WHAT CONSTITUTES A QUORUM?

 

A: Generally, two shareholders present at the meeting and entitled to vote are a quorum.

 

 

Q: HOW MANY VOTES DO I HAVE?

 

A: You are entitled to one vote at our Annual Meeting for each share held by you at the close of business on March 24, 2017. As of March 24, 2017, the Company had 357,284,124 shares in issue.

 

 

Q: HOW MANY VOTES ARE REQUIRED TO APPROVE EACH PROPOSAL?

 

A: Each proposal scheduled to be voted on in the Annual Meeting will be proposed as an annual resolution and requires the affirmative vote of a simple majority of the votes cast at the Annual Meeting in person or by proxy. It is important to note that votes on Proposal nos. 2, 5, 6 and 7 are non-binding and advisory. Therefore, the Company and/or the Board of Directors may determine to act in a manner inconsistent with the outcomes of such votes. However, the Board values the opinions of the Company’s shareholders as expressed through their advisory votes and, accordingly, the Board intends to review and consider the voting results on such resolutions. In the case of Proposal no. 6, in the event no option receives a majority of the votes cast, the Board intends to consider the option that receives the most votes.

 

 

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GENERAL INFORMATION AND FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING

 

 

 

Q: HOW DOES THE BOARD OF DIRECTORS RECOMMEND THAT I VOTE?

 

A: Our Board recommends that you vote “For” Proposal Nos. 1, 2, 3, 4, 5 and 7 and for “One Year” with respect to Proposal No. 6.

 

 

Q: HOW DO I VOTE MY SHARES WITHOUT ATTENDING THE ANNUAL MEETING?

 

A: If you are a shareholder of record on March 24, 2017, you may vote by granting a proxy:

 

   

By Internet: You may submit your proxy by going to www.proxyvote.com (before the meeting) or at nielsen.onlineshareholdermeeting.com (during the meeting) and by following the instructions on how to complete an electronic proxy card. You will need the 16-digit control number included on your Notice or proxy card in order to vote by Internet.

 

   

By Telephone: You may submit your proxy by dialing 1-800-690-6903 and by following the recorded instructions. You will need the 16-digit control number included on your Notice or proxy card in order to vote by telephone.

 

   

By Mail: You may submit your proxy by completing, signing and dating your proxy card (if you received one) where indicated and by mailing. You should sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity (for example, as guardian, executor, trustee, custodian, attorney or officer of a corporation), indicate your name and title or capacity.

For shares held in “street name,” you may vote by submitting voting instructions to your bank, broker or nominee.

Internet and telephone voting facilities will close at 11:59 p.m. (Eastern Time) on May 22, 2017 for the voting of shares held by shareholders of record or held in “street name” and 11:59 p.m. (Eastern Time) on May 18, 2017 for the voting of shares held through Nielsen’s 401(k) plan.

Mailed proxy cards with respect to shares held by shareholders of record or in “street name” must be received no later than May 22, 2017. Mailed proxy cards with respect to shares held through Nielsen’s 401(k) plan must be received no later than May 18, 2017.

 

 

Q: MAY I VOTE AT THE ANNUAL MEETING RATHER THAN BY PROXY?

 

A: Although we encourage you to vote through the Internet or the telephone or to complete and return a proxy card (if you received one) prior to the Annual Meeting to ensure that your vote is counted, you can attend the Annual Meeting and vote your shares online, unless you hold your shares through Nielsen’s 401(k) plan, which cannot be voted online at the Annual Meeting.

You will need your 16-digit control number included on your Notice or proxy card in order to be able to enter the Annual Meeting online. If you vote by proxy and also attend the Annual Meeting, there is no need to vote again at the Annual Meeting unless you wish to change your vote.

 

 

Q: WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE NOTICE OR ONE SET OF PROXY MATERIALS ON OR ABOUT THE SAME TIME?

 

A: It generally means you hold shares registered in more than one account. To ensure that all your shares are voted, please sign and return each proxy card (if you received one) or, if you vote by Internet or telephone, vote once for each Notice or proxy card you receive.

 

 

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GENERAL INFORMATION AND FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING

 

 

 

Q: MAY I CHANGE MY VOTE OR REVOKE MY PROXY?

 

A: Yes. Whether you have voted by Internet, telephone or mail, if you are a shareholder of record, you may change your vote and revoke your proxy by:

 

   

Voting again by Internet or telephone at a later time before the closing of those voting facilities at 11:59 p.m. (Eastern Time) on May 22, 2017;

 

   

Submitting a properly signed proxy card (if you received one) with a later date that is received no later than May 22, 2017;

 

   

Sending a written statement to that effect to our Company Secretary, provided such statement is received no later than May 22, 2017; or

 

   

Attending the Annual Meeting, revoking your proxy and voting online.

If you hold shares through the Nielsen 401(k) plan, you may change your vote and revoke your proxy by any of the first three methods listed above if you do so no later than 11:59 p.m. (Eastern Time) on May 18, 2017. You cannot, however, revoke or change your proxy with respect to shares held through the Nielsen 401(k) plan after that date, and you cannot vote those shares at the Annual Meeting.

If you hold shares in “street name,” you may submit new voting instructions by contacting your bank, broker or other nominee. You may also change your vote or revoke your proxy by attending the Annual Meeting online.

We will honor the proxy with the latest date. However, no revocation will be effective unless we receive notice of such revocation at or prior to the deadlines mentioned above. For those shareholders who submit a proxy electronically or by telephone, the date on which the proxy is submitted in accordance with the instructions listed on the Notice or the proxy card is the date of the proxy.

 

 

Q: HOW ARE VOTES COUNTED?

 

A: Abstentions: Votes may be cast in favor of or against or you may abstain from voting. If you intend to abstain from voting for any director nominee or any other proposal, you will need to check the abstention box for such director nominee or proposal, in which case your vote will not have any effect on the outcome of the election of such director nominee or on the outcome of such proposal.

Broker Non-Votes: Broker non-votes occur when shares held by a bank, broker or other nominee are not voted with respect to a proposal because (1) the bank, broker or other nominee has not received voting instructions from the shareholder who beneficially owns the shares and (2) the bank, broker or other nominee lacks the authority to vote the shares at its/his/her discretion. Proposals Nos. 1, 5, 6 and 7 are considered to be non-routine matters under NYSE rules. Accordingly, any bank, broker or other nominee holding your shares will not be permitted to vote on those proposals at the meeting without receiving voting instructions from you.

If you just sign and submit your proxy card (if you received one) without giving specific voting instructions, this will be construed as an instruction to vote the shares as recommended by the Board of Directors, so your shares will be voted “FOR” each director nominee listed herein (Proposal No. 1), “FOR” Proposal Nos. 2, 3, 4, 5 and 7 and for “ONE YEAR” for Proposal No. 6 , and in accordance with the discretion of the holders of the proxy with respect to any other matters that may be voted on.

Abstentions and broker non-votes will not affect the voting results.

 

 

Q: WHO WILL COUNT THE VOTES?

 

A: Representatives of Broadridge Financial Solutions, Inc. will tabulate the votes and act as inspectors of election.

 

 

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GENERAL INFORMATION AND FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING

 

 

 

Q: COULD OTHER MATTERS BE DECIDED AT THE ANNUAL MEETING?

 

A: At the date this proxy statement went to press, we did not know of any matters to be raised at the Annual Meeting other than those referred to in this proxy statement.

If other matters are properly presented to be considered and voted on at the Annual Meeting for consideration and you are a shareholder of record and have submitted a proxy card (if you received one), the persons named in your proxy card will have the discretion to vote on those matters for you.

 

 

Q: WHO IS SOLICITING MY PROXY?

 

A: Proxies are being solicited by and on behalf of our Board of Directors. Proxies may be solicited by directors, officers or employees (for no additional compensation) in person or by telephone, internet and facsimile transmission. In addition, we have hired D.F. King & Co., Inc. to assist in soliciting proxies.

 

 

Q: WHO WILL PAY FOR THE COST OF THIS PROXY SOLICITATION?

 

A: We will pay the cost of soliciting proxies. We expect to pay approximately $10,000 plus reasonable out-of-pocket expenses for D.F. King & Co., Inc. to assist in soliciting proxies.

 

 

COMPANY INFORMATION AND MAILING ADDRESS

Nielsen Holdings plc is a public limited company incorporated under the laws of England and Wales.

Our shares trade in U.S. dollars on the NYSE under the symbol “NLSN.” Our principal executive offices in the United States are located at 85 Broad Street, New York, NY 10004. Our telephone number is 1 (646) 654-5000. Our website address is www.nielsen.com. Information on our website is not incorporated into this proxy statement.

 

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON MAY 23, 2017:

This proxy statement, our Annual Report for the year ended December 31, 2016 (including the Annual Report on Form 10-K for the year ended December 31, 2016), our UK Annual Report and Accounts for the year ended December 31, 2016, which consists of the UK statutory accounts, the UK statutory directors’ report, the UK statutory directors’ compensation report, the UK statutory strategic report and the UK statutory auditor’s report and related information prepared in connection with the Annual Meeting are available at www.proxyvote.com and www.nielsen.com/investors. You will need the 16-digit control number included on your Notice or proxy card in order to access the proxy materials on www.proxyvote.com. In addition, if you have not received a copy of our proxy materials and would like one, you may download an electronic copy of our proxy materials or request a paper copy at www.proxyvote.com, or by telephone at 1-800-579-1639 or by email to sendmaterial@proxyvote.com. If requesting materials by email, please send a blank email with the 16-digit control number included on your Notice. You will also have the opportunity to request paper or email copies of our proxy materials for all future shareholder meetings.

 

 

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Table of Contents

LOGO

This report sets out the relevant disclosures in relation to directors’ remuneration for the financial year ended 31 December 2016. The report has been prepared in accordance with the requirements of the U.K. Large and Medium sized Companies and Groups (Accounts & Reports) (Amendment) Regulations 2013 which apply to the Company. The relevant sections of the report have been audited by Ernst & Young LLP.

For avoidance of doubt please note that in the U.S. the term “Compensation” is used instead of “Remuneration”.

The Directors’ Compensation Report is divided into the following sections:

 

   

The Statement from the Compensation Committee (“Committee”) Chairperson; and

 

   

The Annual Report on Directors’ Compensation which sets out Director compensation for 2016. The Annual Report on Directors’ Compensation together with the Statement from the Compensation Committee Chairperson is subject to an advisory vote at the Annual Meeting.

 

 

STATEMENT FROM THE COMPENSATION COMMITTEE CHAIRPERSON

Compensation Philosophy

Executive Directors

Nielsen’s executive compensation program which applies to our Executive Director, Mitch Barns as Chief Executive Officer (“CEO”), is designed to incent and reward the executive team to deliver sustained financial performance and long-term value to shareholders. The primary objectives of Nielsen’s executive compensation program are to:

 

   

attract and retain top executive talent

 

   

motivate executives to accomplish short-term business performance goals that drive planned long-term business objectives and deliver long-term sustainable value to shareholders

 

   

align executive interests and rewards with long-term shareholder value

 

   

differentiate rewards based on quantitative assessments of business financial performance and individual contributions towards core objectives

Non-Executive Directors

Our compensation program for Non-Executive Directors is designed to attract and retain Directors who possess the requisite knowledge, skills, and experience to support and oversee the Company. Our policy is to deliver a substantial portion of Directors’ compensation in the form of Deferred Stock Units (“DSUs”) in order to align rewards to Nielsen’s long-term performance and create shareholder value. A DSU represents an unfunded and unsecured right to receive one Nielsen share following the termination of the Director’s services. Each Director is required to acquire and maintain a threshold level of share ownership. Our share ownership guidelines for Directors are described in more detail on page A-9 of this report

2016 Compensation Program Changes and Highlights

Executive Director Program

Our Directors’ Compensation Policy that was approved by shareholders at our Annual General Meeting on June 21, 2016 applies to our Executive Director, as CEO.

 

 

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DIRECTORS’ COMPENSATION REPORT

 

In 2016, our shareholders continued to show confidence in Nielsen’s executive compensation program with 98% of the votes cast at our shareholder meeting affirming our executive compensation program on an advisory basis and 98% approving our Directors’ Compensation Policy on a binding basis. In 2016, we continued a robust outreach program to our shareholders to discuss topics including Company performance, our executive compensation programs, and how we disclose information in our proxy statement. Each meeting, which was led by the Chairman of the Board, resulted in valuable feedback that we used to strengthen the disclosure of our compensation programs. We continue to strive to keep our programs simple and focused on meaningful performance metrics.

The Committee took actions consistent with the Company’s philosophy and commitment to align with shareholder value, promote meritocracy and ensure good corporate governance. Notable highlights and/or changes made by the Committee are set out in the following table.

 

Modifications to peer groups   

The Company uses two peer groups each of whose composition is reviewed annually by the Committee.

 

The Executive Compensation Peer Group is used as one of the factors in determining pay for Executive and Non-Executive Directors. The peer group companies are selected based on business relevance and size as measured by revenue and market capitalization. After a review by the Compensation Committee, IMS Health Holdings, Inc. (currently known as QuintilesIMS Health Holdings, Inc) was added and DirectTV Group Holdings, LLC was removed. McGraw-Hill Financial, Inc. was retained in the peer group and is now known as S&P Global, Inc. The full peer group is disclosed in our 2017 Proxy Statement under “Compensation Practices and Governance – Benchmarking.”

 

The Long Term Performance Plan (“LTPP”) Peer Group is used to benchmark our relative Total Shareholder Return performance pursuant to this plan. Companies in the peer group are selected to represent a comparable investment profile to Nielsen by virtue of their being in comparable businesses or being representative of the markets we serve. The Committee performed a detailed review of the peer group and decided that no changes were necessary for 2016. The full peer group is disclosed in our 2017 Proxy Statement under “How Pay Decision are Made – Long-Term Performance Plan (“LTPP”).”

   
Share Ownership Guidelines    After a market review of our share ownership guidelines, the Committee approved a change to our policy such that guidelines would be recalculated each year for Executive Directors (and non-Executive Directors) using the closing share price of Nielsen stock on December 31 regardless of whether the Director already met the ownership guideline. Previously, once a Director met the share ownership guideline an annual recalculation was not performed unless there was a change in role or compensation. In addition, the Committee approved including unvested time-based RSUs and DSUs in the calculation towards meeting the share ownership guidelines.    
Adjustments to Annual Incentive Plan payout policy    In 2016, the Committee noted that the proportion of equity in executives’ total annual pay mix had reached the targeted range. Therefore for the 2016 plan year the Committee decided that annual incentive payouts would revert to being paid 100% in cash (versus 75% cash and 25% in Restricted Stock Units that had been our practice since 2013).    
Equity Grants   

In 2016, the Committee delegated authority to Nielsen’s CEO and Executive Director Mitch Barns to make equity grants to employees (other than Section 16 Officers) in order to reward outstanding performance or to retain or attract critical talent. Individual awards may not exceed $300,000 and the total annual value of awards made by the CEO may not exceed $2,500,000.

   
Base Salary    The Committee re-affirmed its policy to review salaries in intervals of 24-36 months (except in the event of a role change or other special circumstances). Increases in compensation will be more heavily weighted to equity in order to further emphasize long-term equity in the executive pay mix.    

We believe that the individual components and levels of compensation paid to Nielsen’s Executive Director are consistent with our philosophy and are serving their purposes well – motivate accomplishment of annual performance goals that drive long-term business objectives and deliver sustainable long-term value to our shareholders. We will continue to monitor the design and effectiveness of our executive compensation programs as they apply to our Executive Director annually and make modifications as appropriate.

Non-Executive Director Program

Mr. Attwood was appointed Chairman of the Board effective January 1, 2016 having previously served as the Company’s Lead Independent Director during 2015. The Board approved fees and an annual DSU grant for Mr. Attwood within the terms of our policy. No other changes were made to Non-Executive Director compensation in 2016 other than the afore-mentioned change to our share ownership calculation methodology.

There were two new Non-Executive Directors added to the Board. Lauren Zalaznick joined the Board on April 28, 2016 and David Rawlinson joined the Board on February 8, 2017.

/s/ Kathryn Marinello

Chairperson of the Compensation Committee

 

 

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DIRECTORS’ COMPENSATION REPORT

 

 

ANNUAL REPORT ON DIRECTORS’ COMPENSATION

The following is provided on an audited basis.

Compensation of Executive Director

The following table sets forth the compensation of Mitch Barns, our CEO, who is our Executive Director, during 2015 and 2016:

 

      Base
Salary
     Benefits
and Other1
     Annual
Bonus
     Long  Term
Incentives2
     Pensions3      Total  
2016      1,000,000        24,327        1,700,000        4,548,242        7,950        7,280,519  
2015      1,000,000        111,902        1,545,000        2,109,268        7,950        4,774,121  

 

1   Taxable benefits paid to Mr. Barns include but are not limited to financial planning, healthcare benefits and Company paid life insurance benefits.

 

2   The amounts disclosed in this column represent the vesting date fair market value of awards and includes any dividend equivalents paid.

 

    Values for awards vested in 2016 were due to the CEO’s ongoing employment with the Company:

 

    Stock Options: 7/26/2016 ($524,200), 9/25/2016 ($197,048), 10/29/2016 ($96,585) and 10/29/2016 ($0)

 

    RSUs: 2/10/2016 ($111,867), 2/12/2016 ($252,907), 7/25/2016 ($884,845), 7/26/2016 ($219,144), 9/25/2016 ($128,205), 10/29/2016 ($278,366) and 10/29/2016 ($357,369)

 

    Performance Restricted Shares: 2/18/2016 ($1,497,705)

 

3   The amounts indicated for Mr. Barns represent 401(k) employer matching contributions.

 

 

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DIRECTORS’ COMPENSATION REPORT

 

Compensation of Non-Executive Directors

The following table sets forth the compensation of our Non-Executive Directors during 2015 and 2016:

 

      Board
Fees
     Board
Chairman
Fee
     Committee
Chair Fees
     Equity
Vesting
     Total  
James Attwood1                                             

2016

     80,000        150,000                 167,891        397,891  

2015

     40,000        15,000               28,112        83,112  
David Calhoun2                                             

2016

     80,000                          7,584,715        7,664,715  

2015

                          7,534,051        7,534,051  
Karen Hoguet                                             

2016

     80,000                 25,000        152,891        257,891  

2015

     80,000               20,000        137,418        237,418  
James Kilts3                                             

2016

     80,000                          165,378        245,378  

2015

     80,000                      109,063        189,063  
Harish Manwani4                                             

2016

     80,000                          163,176        243,176  

2015

     80,000                      102,691        182,691  
Kathryn Marinello5                                             

2016

     80,000                          152,891        232,891  

2015

     80,000                      74,478        154,478  
Robert Pozen                                             

2016

     80,000                 15,000        152,891        247,891  

2015

     80,000               15,000        137,418        232,418  
Vivek Ranadivé                                             

2016

     80,000                          152,891        232,891  

2015

     80,000                      137,418        217,418  
Javier Teruel                                             

2016

     80,000                 20,000        152,891        252,891  

2015

     80,000               15,000        137,418        232,418  
Lauren Zalaznick6                                             

2016

     60,000                        75,893        135,893  

 

1   Mr. Attwood received a prorata equity grant for the period beginning July 1, 2015 to May 1, 2016. He was appointed Chairman of the Board on January 1, 2016. 2015 Board Chairman fees paid to Mr. Attwood were paid in his capacity of Lead Independent Director.

 

2   Mr. Calhoun became an independent director as of January 1, 2016.

 

3   Mr. Kilts received a prorata equity grant for the period beginning January 1, 2015 to May 1, 2015.

 

4   Mr. Manwani received a prorata equity grant for the period beginning January 22, 2015 to May 1, 2015.

 

5   Ms. Marinello’s received a prorata equity grant for the period beginning November 3, 2014 to May 1, 2015.

 

6   Ms. Zalaznick was appointed to the Board on April 28, 2016.

 

 

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DIRECTORS’ COMPENSATION REPORT

 

Following its annual review of Non-Executive Director compensation the Board concurred that no adjustments to Non-Executive Director compensation were appropriate. Changes previously approved by the Board and disclosed in the 2015 report went into effect on January 1, 2016 and are expected to be in force until December 31, 2018.

 

Compensation Component (Annual)    2016        Future  

Board Fees1

     $  80,000          $  80,000  

Board Chair Fee2

     150,000          $150,000  

Committee Chair Fee

    

Governance: $  15,000

Compensation: $  20,000

Audit: $  25,000

 

 

 

      

Governance: $  15,000

Compensation: $  20,000

Audit: $  25,000

 

 

 

Equity Grant3

     $160,000          $160,000  

 

1   Directors may elect to receive Board fees in cash or in DSUs.

 

2   Board Chair fees are paid 50% in cash and 50% in DSUs. The Board Chair may elect to receive the cash portion in DSUs.

 

3   The annual equity grant is delivered in DSUs and vests in equal installments each quarter over 1 year.

Mr. Attwood was appointed Chairman of the Board effective January 1, 2016 having previously served as the Company’s Lead Independent Director during 2015. In addition, there were two new Non-Executive Directors added to the Board. Ms. Zalaznick joined the Board on April 28, 2016 and Mr. Rawlinson joined the Board on February 8, 2017.

Performance Against Performance Targets for Annual Incentive for our Executive Director

A maximum annual incentive payout fund for the CEO is determined by a formula which calculates 2% of Adjusted EBITDA performance and allocates it to each executive officer in proportions ranging between 10% and 18% of the fund. This yielded a maximum fund of $6,977,000 for the CEO. The Committee exercises negative discretion to determine final payouts using the Annual Incentive Plan Formula (described below). This qualifies payouts under the plan as tax deductible under US tax code Section 162(m).

Annual Incentive Plan Formula

The funding/initial payout formula (shown below) correlates EBITDA (as defined on page B-2 of the Directors’ Compensation Policy) growth from the prior year with payout percentages indexed to target opportunities. For 2016, a funding/initial payout of 100% is achieved when EBITDA performance meets the target of 7% growth. Maximum funding and individual payouts are capped at 200% of target. Threshold performance yields a payout/initial funding of 70%. If performance falls below the threshold – no payouts are funded.

2016 Performance-Payout Formula

 

  Performance Milestones    Growth vs Prior Year
(index %)
      

Funding/

Initial Payout %

 
  Maximum      160%          200%  
  Exceptional      115%          111%  
  Target      107%          100%  
  Minimum      97%          70%  
  < Minimum      <97%          Zero  

Additionally, the Committee considers total company financial performance and the Executive Director’s contribution to that performance. Performance against objectives is assessed and consideration given to qualitative factors such as degree of difficulty, extraordinary market circumstances and leadership impact. As a result, the initial payout may be adjusted up or down to ensure that total performance is reflected in the final payout.

 

 

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DIRECTORS’ COMPENSATION REPORT

 

2016 Results

 

   

The Committee assessed the EBITDA performance growth index at 101% yielding a funding percentage of 87% and the initial payout was set at 87% of our Executive Director’s target bonus opportunity.

 

   

Before approving the incentive plan funding, the Committee assessed the Company’s free cash flow performance against annual plan objectives. The Committee has discretion to reduce the fund by up to 30% if free cash flow falls short of objectives. There is no discretion to increase the fund in the event that free cash flow performance exceeds objectives.

 

   

We define free cash flow as net cash provided by operating activities less capital expenditure. For a reconciliation of free cash flow to net cash provided by operating activities, see “Executive Compensation – Compensation Discussion and Analysis – Executive Summary” in the 2017 Proxy Statement.

 

   

The Committee reviewed the Company’s free cash flow performance, which was within our target range at 16.5% growth over prior year (as shown under “Executive Compensation – Compensation Discussion and Analysis – Executive Summary – Business Performance” and “Executive Compensation – Compensation Discussion and Analysis – 2016 Pay Decisions and Performance – Total Company Performance – Financial” in the 2017 Proxy Statement). Therefore, no reduction was made to the incentive funding.

Performance Against Performance Targets for Long-Term Incentive Vesting for our Executive Director

2016 Awards

The following table shows the aggregate grant date fair value (based on the share price and Black-Scholes values on the grant date) and the number of the restricted stock units and stock options granted in 2016 to our Executive Director under the Nielsen 2010 Stock Incentive Plan.

 

  Year            Time Vested RSUs      Performance Vested RSUs     Options              Vesting
Date 1
     Total
Value
 
      Share
price
on
grant
date
     Grant
Date Fair
Value
     # of
RSUs
     Grant
Date Fair
Value
     # of
RSUs
    

%

Receivable if
minimum
performance
achieved

    Grant
Date Fair
Value
     # of
Options
     Exercise
price
                 
  2016    $ 54.05        1,499,996        27,752        3,722,693        73,146        50     1,657,089        191,571      $ 54.05        10/20/2020        6,879,778  

 

1   RSU and stock option awards vest over four years in equal annual installments on the anniversary of the grant date. Performance RSUs will be earned and vested in February 2019.

Time-Vested Restricted Stock Unit Awards

The following table provides information regarding the time-vested restricted stock units outstanding at the beginning and end of the year ended December 31, 2016 for our Executive Director:

 

Award Date    End of
Vesting
Period
     Unvested
RSUs
Outstanding
at 1/1/20161
     RSUs
Granted
     RSUs
Vested1
     Unvested
RSUs
Outstanding
at
12/31/20161
     Market Price
Per Share on
Award Date
     Market Price
Per Share on
Vesting Date
 
7/26/2012      7/26/2016        3,999               4,044             $ 27.98      $ 54.19  
7/25/2013      7/25/2017        31,697               16,024        16,237      $ 33.25      $ 55.22  
9/25/2013      9/25/2017        4,728               2,404        2,423      $ 36.56      $ 53.33  
2/10/2014      2/10/2016        2,463               2,463             $ 45.13      $ 45.42  
10/29/2014      10/29/2018        18,385               6,233        12,557      $ 41.92      $ 44.66  
2/12/2015      2/12/2017        10,697               5,348        5,480      $ 43.57      $ 47.29  
10/29/2015      10/29/2019        31,475               8,002        24,186      $ 47.95      $ 44.66  
2/18/2016      2/18/2020               10,763               11,027      $ 47.85        N/A  
10/20/2016      10/20/2020               27,752               27,955      $ 54.05        N/A  

 

1   Amounts include additional shares acquired from dividend equivalents

 

 

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DIRECTORS’ COMPENSATION REPORT

 

Performance-Vested Restricted Stock Unit Awards

The following provides information regarding the performance-vested restricted stock units outstanding at the beginning and end of the year ended December 31, 2016 for our Executive Director:

 

Award
Date
   Vest Date      Measurement
Period
     Unvested
RSUs
Outstanding
at 1/1/2016
     RSUs
Granted
     RSUs
Vested
     RSUs
Forfeited
     Unvested
RSUs
Outstanding
at
12/31/2016
     Fair
Value
Per
Share
on
Grant
Date
     Market
Price
Per
Share
on
Vesting
Date
    

Value

on

Vesting
Date

 
2/20/2013      February 2016        2013-2015        50,000               31,300        18,700             $ 32.25      $ 47.85      $ 1,497,705  
2/20/2014      February 2017        2014-2016        43,500                             43,500      $ 46.40        N/A        N/A  
2/19/2015      February 2018        2015-2017        65,860                             65,860      $ 45.55        N/A        N/A  
2/18/2016      February 2019        2016-2018               73,146                      73,146      $ 47.85        N/A        N/A  

 

1.   The target number of shares granted was 25,000. The 2013 award was made in the form of restricted shares. We were required to issue the maximum number of shares that may have become payable under the plan (200%). Actual payout was 125% of target (31,300).

LTPP participants are awarded a target number of performance RSUs that are earned subject to the Company’s performance against two cumulative three-year performance metrics, Relative Total Shareholder Return (“Relative TSR”) and Free Cash Flow (“FCF”), with assigned ratings of 40% and 60% respectively. The Committee decided to assign more weight to the FCF metric over which executives have relatively more direct control. Our Committee has decided not to disclose the actual FCF targets because it is commercially sensitive information.

The following sets forth the LTPP performance thresholds for LTPP grants made in 2014, 2015 and 2016.

 

 Relative TSR    Weighting      Performance      30th Percentile Relative
to Peers (Threshold)
     50th Percentile Relative
to Peers (Target)
     75th Percentile Relative
to Peers (Maximum)
 
     40%        Payout        50%        100%        200%  
              
 Free Cash Flow    Weighting      Performance      85% of target      100% of target      120% of target  
     60%        Payout        50%        100%        200%  

Time-Vested Stock Option Awards

The following provides information regarding the time-vested stock options outstanding at the beginning and end of the year ended December 31, 2016 for our Executive Director:

 

Award Date    Outstanding
at 1/1/16
     Granted
During
2016
     Exercised
During
2016
     Outstanding
at
12/31/2016
     # of
Securities
Underlying
Unexercised
Options (#)
Exercisable
     # of Securities
Underlying
Unexercised
Options (#)
Unexercisable
     Exercise
price
     Expiration
Date
 
3/5/20071      6,235                                         $ 16.00        3/5/2017  
3/5/20071      1,039                                         $ 32.00        3/5/2017  
3/18/2010      62,500                      62,500        62,500             $ 18.40        3/18/2020  
5/11/2011      75,000               75,000                           $ 30.19        5/11/2018  
7/26/2012      80,000                      80,000        80,000             $ 27.98        7/26/2019  
9/25/2013      47,000                      47,000        35,250        11,750      $ 36.56        9/25/2020  
10/29/2014      141,000                      141,000        70,500        70,500      $ 41.92        10/29/2021  
10/29/2015      177,515                      177,515        44,378        133,137      $ 47.95        10/29/2022  
10/20/2016      N/A        191,571               191,571               191,571      $ 54.05        10/20/2023  

 

1   The awards were cancelled on February 16, 2016 as they did not meet performance criteria and never vested.

 

 

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DIRECTORS’ COMPENSATION REPORT

 

Pensions

Pension Benefits for 2016

The following table presents information regarding the pension benefits for our Executive Director during the fiscal year ended December 31, 2016.

 

Name    Plan Name     

Number of
Years

Credited Service

(#)

    

Present Value of

Accumulated Benefit

($)

    

Payments
During

Last Fiscal
Year

($)

 

Mitch Barns

     Qualified Plan        4.42        41,029         
       Excess Plan        4.42        31,103         

For details on the assumptions used to determine the present value of the accumulated benefit and on our US Retirement Plans, please refer to the 2017 Proxy Statement under “Pension Benefits for 2016.”

Participants in the Qualified Plan become fully vested in their accrued benefits after the earlier of five years of service or when the participant reaches normal retirement age (which is the later of age 65 or the fifth anniversary of the date the participant first became eligible to participate in the plan).

Reduced early retirement benefits are available to Mr. Barns under the Excess Plan once he reached age 40 and completed 5 years of service. Mr. Barns is eligible for early retirement. The early retirement benefits payable are actuarially reduced to be equivalent to the benefit payable at normal retirement age for Mr. Barns.

Non-Executive Directors do not receive pension benefits.

Effective August 31, 2006, the Company froze its United States qualified and non-qualified defined benefit retirement plans.

Payments to Past/Former Directors

There were no payments to past/former Directors for the year ended December 31, 2016.

Payments for Loss of Office

There were no payments for loss of office for the year ended December 31, 2016.

 

 

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DIRECTORS’ COMPENSATION REPORT

 

Statement of the Directors Shareholding and Share Interests

In 2011, our Board adopted share ownership guidelines, pursuant to which our Directors who receive fees for their services are required to maintain equity ownership in our Company. The share ownership guideline for our Executive Director is six times his base salary and for our Non-Executive Directors is five times their annual cash fees (including Board Retainer, Board Chair, and Committee Chair Fees). Shares beneficially owned by these Directors, including vested DSUs and jointly-owned shares, unvested DSUs, and unvested RSUs in the case of our Executive Director, are included in the calculation. These Directors are expected to meet the guidelines within five years from the later of the adoption of the guidelines or their appointments as a Director or the commencement of the receipt of Director fees. A Director may not sell or dispose of shares for cash unless the share ownership policy is satisfied. The share ownership guidelines are reviewed annually generally in the first Compensation Committee meeting of the year. As of December 31, 2016, seven of the Directors have met the guidelines and four of the Directors were still working toward meeting their guideline. The following table provides details on the Directors’ shareholdings as at December 31, 2016:

 

Director    Beneficially
Owned
Shares
     %
Shareholding
Guidelines
Achieved
     Vested but
Unexercised
options
     Exercised
Options
     RSU Awards
Subject to
Performance
     RSU Awards
Not Subject to
Performance
     Weighted
Average
Exercise
Price of
Vested
Options
 
James Attwood      30,696        100%                                     
Mitch Barns1      222,202        100%        292,628        75,000        182,506        99,865        34.56  
Dave Calhoun      736,145        100%        600,000        1,043,750                      27.98  
Karen Hoguet      26,474        100%        31,120                             27.13  
James Kilts      6,535        65%                                     
Harish Manwani      6,348        63%                                     
Kathryn Marinello      10,928        91%                                     
Robert Pozen      221,284        100%        40,335                             25.87  
Vivek Ranadivé      21,518        100%        4,941                             28.53  
Javier Teruel      20,949        100%        34,172                             27.13  
Lauren Zalaznick      3,572        36%        0                              

 

1   Beneficially owned shares includes 122,337 of shares owned at December 31, 2016 and 99,865 unvested RSUs as of March 1, 2017.

The following information is unaudited.

 

 

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DIRECTORS’ COMPENSATION REPORT

 

Performance Graph

The chart below shows the cumulative total shareholder return of Nielsen stock assuming an initial $100 investment over the period beginning on January 26, 2011 and ending December 31, 2016. In 2013, we introduced our dividend policy and share repurchase program. We have compared our performance to the S&P 500 and to a market cap-weighted composite of the peer group we use to measure total shareholder return in our LTPP. We believe these two indices are key to measuring our performance in our industry.

 

 

NIELSEN HOLDINGS PLC—CUMULATIVE TOTAL SHAREHOLDER RETURN SINCE IPO (as of December 31, 2016)

 

 

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Chief Executive Officer’s Compensation in the Past Six Years4

 

      2011      2012      2013      2014      2015      2016  
CEO Single Figure1,2    $ 10,871,106      $ 11,139,245      $ 18,270,945      $ 4,071,634      $ 4,774,121      $ 7,280,519  
Bonus (% of maximum awarded)3      56%        49%        53%        51%        52%        43%  
Performance based LTI (% of maximum vesting)      0%        0%        0%        0%        0%        125%  

 

1   Includes data for former CEO David Calhoun for 2011, 2012 and 2013 and current CEO Mitch Barns for 2014, 2015 and 2016.

 

2   Includes the value of all stock and option awards that vested in the respective year.

 

3   Annual incentive maximum payout is 200% of opportunity. In 2013, 2014 and 2015, 75% was paid in cash and 25% was paid in incentive restricted stock units. The calculation of the Bonus (% of maximum award), used the combined value of the cash and restricted unit awards.

 

4   There was a minor error in the calculation of the figures for this table in the Director’s Compensation Report for 2015 which resulted in these figures being overstated. This has now been rectified and the figures above are correctly calculated.

Percentage Change in the Chief Executive Officer’s Compensation Compared to Employees

The table below shows the percentage year-on-year change in salary and bonus earned by the CEO between the year ended December 31, 2016 and the year ended December 31, 2015 compared to the average salary and bonus for senior participants in our global annual incentive plan. This comparative employee group was chosen as the make-up and calculation of their compensation for the categories in the table below most closely resemble that of our CEO. Due to a restructuring of our plans in 2016, the comparator group is not identical to the comparator group used in 2015.

 

% change    Base Salary      Bonus      Total Cash
Compensation
 
CEO      0%        -17%        -12%  
Employee Comparator      3%        -19%        -4%  

 

 

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DIRECTORS’ COMPENSATION REPORT

 

Relative Importance of Spend on Pay

The table below shows the total pay for all employees compared to other key financial metrics and indicators:

 

($ in millions1)    Year Ended:  
      December 31, 2015      December 31, 2016      % Change2  
Personnel Costs    $ 2,513      $ 2,520        2.8%  
Dividends paid    $ 408      $ 434        6.4%  
Share Buybacks    $ 667      $ 418        -37.3%  
Average number of employees      41,914        43,003        2.6%  
Revenues    $ 6,172      $ 6,309        4.1%  
EBITDA    $ 1,853      $ 1,921        4.6%  

 

1   Average number of employees is not provided in millions.

 

2   % change is provided on a constant currency basis. We calculate constant currency by converting 2015 local currency values to 2016 period foreign currency exchange rates (only for personnel costs, revenue & EBITDA).

The numbers presented above were selected to provide a broad but reasonable context against which to compare the growth of value provided to the CEO, all employees and shareholders. The figures are reported in our 2016 UK Annual Report and Accounts.

Consideration by the Directors of Matters Relating to Directors’ Compensation

In 2016, the Committee consisted of the following members:

 

    Kathryn Marinello (Chairperson)

 

    Harish Manwani

 

    Vivek Ranadivé

 

    Lauren Zalaznick

The Committee and the Board are responsible for determining the compensation of our Directors and regularly review the philosophy and goals of the Director compensation program and assesses the effectiveness of compensation practices and processes. The Committee sets performance goals and assesses performance against these goals. The Committee and the Board operate independently of management and consider the recommendations and market data provided by its independent consultant when reviewing and making compensation decisions. The CEO does not participate in the Committee and Board discussions regarding his own compensation. The Committee and the Board make their decisions based on their assessment of both Nielsen and individual performance against goals, market data provided by their independent compensation consultant, and on their judgment as to what is in the best interests of Nielsen and its shareholders.

The Committee is empowered to study or investigate any matter of interest or concern that the Committee deems appropriate and shall have the sole authority to retain, oversee the work of, obtain advice from and terminate any compensation consultant, independent legal counsel or other adviser. The Company shall provide appropriate funding, as determined by the Committee, for payment of reasonable compensation to any compensation consultant, independent legal counsel or other advisers retained by the Committee, as well as funding for the payment of ordinary administration expenses of the Committee that are necessary or appropriate in carrying out its duties.

The Committee undertakes an independence assessment prior to selecting any compensation consultant, legal counsel or other advisors that will provide advice to the Committee (other than in-house legal counsel) taking into account such factors as may be required by the New York Stock Exchange, the UK Companies Act 2006 and any other relevant legislation or regulation from time to time.

 

 

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DIRECTORS’ COMPENSATION REPORT

 

Any compensation consultant retained by the Committee to assist it in connection with setting the amount or form of Director compensation (other than any role limited to consulting on any broad-based plan that does not discriminate in scope, terms, or operation, in favor of executive officers or Directors of the Company, and that is available generally to all salaried employees; or providing information that either is not customized for the Company or that is customized based on parameters that are not developed by the compensation consultant, and about which the compensation consultant does not provide advice) shall not provide any other services to the Company or its subsidiaries, unless such services are pre-approved by the Committee. The Committee shall evaluate, on at least an annual basis, whether any work provided by the Committee’s compensation consultant raised any conflict of interest.

The Committee retains Meridian Compensation Partners, LLC (Meridian) as its compensation consultant. Meridian has provided market data and perspective on Executive and Non-Executive Director compensation and related governance. Meridian and its affiliates did not provide any services to Nielsen or its affiliates in 2016 other than executive and Director compensation consulting to the Committee. Discussions between Meridian and Nielsen management are limited to those necessary to complete work on behalf of the Committee.

The Committee determined that Meridian and its lead consultant for Nielsen satisfy the independence factors described in the NYSE listing rules. The Committee also determined that the work performed by Meridian in 2016 did not raise any conflict of interest issues.

In 2016, Nielsen paid $264,325 to Meridian for services rendered.

Implementation of Policy in 2016

Our 2016 Directors’ Compensation Policy has been implemented and remains unchanged from 2015. All Executive and Non-Executive compensation complies with this policy. The Directors’ Compensation Policy is subject to approval by shareholders every three years. It is intended that, unless required earlier, the Company’s shareholders will next be asked to approve the Directors’ Compensation Policy at the 2019 annual meeting of shareholders.

Statement of Voting at General Meeting

At the Annual General Meeting on June 21, 2016, the shareholder advisory vote on the Directors’ Compensation Report received the following votes:

 

        Votes        % of Total Votes       
Votes Cast in Favor        307,845,927          98.5%       
Votes Cast Against        4,740,232          1.5%       
Total Votes Cast        312,586,159          100%       
Votes Withheld1        12,153,074          N/A       

 

1   For purposes of calculating our overall voter approval, we have excluded votes withheld.

At the Annual General Meeting on June 21, 2016, the shareholder binding vote on the Directors’ Compensation Policy received the following votes:

 

        Votes        % of Total Votes       
Votes Cast in Favor        308,584,537          98.6%       
Votes Cast Against        4,247,470          1.4%       
Total Votes Cast        312,832,007          100%       
Votes Withheld1        11,907,226          N/A       

 

1   For purposes of calculating our overall voter approval, we have excluded votes withheld.

 

 

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LOGO

Our Directors’ Compensation Policy applies to our Executive Director, as CEO (as well as any individual who may become an Executive Director while this policy is in effect) and our Non-Executive Directors. Below is an abridged version of the approved policy which is provided for information only.

 

 

COMPENSATION POLICY FOR EXECUTIVE DIRECTORS

Philosophy

Foster meritocracy

 

   

Our pay-for-performance philosophy differentiates rewards based on business performance and individual contributions toward core objectives.

Pay competitively

 

   

The Committee reviews compensation annually and considers peer group and general industry benchmarks among several factors when making decisions on pay. Other factors include the mix of pay components in total direct compensation, prior year awards, changes in role or responsibilities, company financial performance, and individual performance.

Emphasize variable, at risk pay subject to performance – the executive compensation framework

 

   

As outlined below in the Executive Compensation Framework, a significant portion of our Executive Director’s compensation is at risk; dependent on the achievement of challenging annual and long-term performance targets and/or the performance of our share price.

 

Target Compensation Framework  
  Pay Component   

Target Range

(Total Pay)

       Guaranteed/At Risk  
  Base Salary      Up to 20%        Guaranteed  
  Target Annual Incentive      Up to 30%        At Risk  
  Total Cash      Not to exceed 50%           
  Target LTI Performance Awards      25 - 40%        At Risk  
  Target LTI Time-Vested Awards      20 - 35%        At Risk  
  Total Equity      No less than 50%           

 

 

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DIRECTORS’ COMPENSATION POLICY

 

Compensation Policy for Executive Directors

 

  Element    Purpose    How Component Operates
  Annual Base Salary    Attract and retain top talent   

   Reviewed in intervals of 24-36+ months

   When reviewing base salary levels and determining increases, the Compensation Committee and the Board consider a variety of factors including: (1) our pay for performance philosophy, (2) market benchmark compensation data, (3) the Director’s individual performance and contributions to the success of the business in the prior year, (4) company performance, (5) current pay mix, and (6) role changes

  Annual Incentive (“AIP”)

   Motivate Directors to accomplish short-term business performance goals that contribute to long-term business objectives   

   Annual incentive target opportunities are established each year with reference to (1) our pay for performance philosophy, (2) market benchmark compensation data, (3) the Director’s individual performance and contributions to the success of the business in the prior year, (4) company performance, (5) current pay mix, (6) role changes, and (7) prior year target

   The Compensation Committee determines individual payout using the annual incentive plan design applicable to all managerial employees

   The EBITDA performance formula determines incentive plan funding and the initial payout percentage for all participants

   100% EBITDA performance to target = 100% incentive pool funding and 100% initial individual payout

   The initial payout percentage may be adjusted up or down based on a quantitative assessment of individual performance vs objectives

   Maximum payout opportunity is capped at 200% of individual target

   Threshold EBITDA performance will result in an initial payout/funding of 70%

   Zero funding and zero initial payout if EBITDA performance is below threshold

   The Compensation Committee has discretion to reduce the fund by up to 30% if free cash flow falls short of objectives

   In order to satisfy the performance-based pay exception of Section 162(m) of the U.S. Internal Revenue Code (the “Code”), Director payouts are determined initially using the following formula:

   Actual EBITDA performance x 2% x executive allocation percentage

   Annual incentive plan payouts are then made according to the underlying EBITDA performance formula and individual payout percentage, subject to the maximum 200% of target cap on payouts

   Actual payouts and the performance metrics used to determine them will be disclosed in the Directors’ Compensation Report in the year payouts are made

   The calculation of EBITDA performance for annual incentive plan purposes differs from reported Adjusted EBITDA because it is calculated using a standard foreign currency exchange rate established at the beginning of the year in order to eliminate the impact of currency exchange volatility on the performance assessment

   Payout is intended to be delivered 100% in cash but may be delivered in a mixture of cash and restricted stock units at the Committee’s discretion

   Payouts are subject to recoupment under the terms of Nielsen’s Clawback policy

  Long-Term Incentive (“LTI”)    Deliver long-term sustainable performance and align Executive Director rewards with long-term returns delivered to shareholders   

   LTI award values are determined each year by reference to (1) our pay for performance philosophy, (2) market benchmark compensation data, (3) the Director’s individual performance and contributions to the success of the business in the prior year, (4) company performance, (5) current pay mix, (6) role changes, and (7) prior year award

   

Performance Restricted Stock Units
(“Performance RSUs”)

   Alignment with long-term shareholder return   

   Subject to performance against two three-year cumulative performance metrics, free cash flow and relative total shareholder return with assigned weighting of 60% and 40%, respectively

   Specific threshold, target and maximum performance metrics for three-year cumulative free cash flow performance will not be disclosed for competitive reasons but targets are designed to be aggressive and achievable and are fully aligned with our approved three-year strategic plan and long-term guidance issued to investors at the beginning of the performance period

   Targets and actual results used to determine payouts will be disclosed in the Director’s Compensation Report in the year that payouts are approved

   Subject to recoupment under the terms of Nielsen’s Clawback Policy

 

 

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DIRECTORS’ COMPENSATION POLICY

 

  Element    Purpose    How Component Operates
             

   Relative total shareholder return is measured against a peer group used solely for this purpose. Companies in this peer group are selected to represent a comparable investment profile to Nielsen by virtue of their being in comparable businesses or being representative of the markets we serve

   Represents approximately 50% of the annual LTI value

   Zero payout for performance below threshold

   For performance at threshold, the payout opportunity is 50% and 100% for performance at target

   Maximum payout opportunity is capped at 200% of target

   Payouts capped at target if absolute total shareholder return is negative

   No dividend equivalents on unearned performance RSUs

   

Stock Options

   Alignment with shareholder return and retention   

   Four-year time-vested

   Represents approximately 25% of LTI value

   Maximum payout not to exceed 100% of the options at the end of the vesting period

   

Restricted Stock Units (“RSUs”)

   Alignment with shareholder return and retention   

   Four-year time-vested

   Represents approximately 25% of LTI value

   Dividend-equivalents on RSU awards are accrued and delivered as additional RSUs

   Maximum payout not to exceed 100% of shares at the end of the vesting period, plus any earned dividends equivalents (if applicable, whether on vested or unvested)

  Health And Welfare Plans,

  Perquisites

   Promote overall well-being and avoid distractions caused by unforeseen health/financial issues   

   Health and Welfare plans generally available to other employees, including medical insurance and savings accounts

   De minimis financial planning and wellness allowances

   Other benefits may include provision of transport

The cost of the Health and Welfare plans and perquisites provided changes in accordance with market conditions and will, therefore, determine the maximum amount that would be paid in the form of benefits during the period of this policy

  Pension    Provide additional income in retirement and promote overall financial wellbeing   

Qualified Cash Balance Pension Plan (the “Qualified Plan”)

   Plan frozen on August 31, 2006

   Prior to the freeze we added monthly basic and investment credits to each participants account

   The basic credit equaled 3% of a participants eligible monthly compensation

   At the point of freeze, all basic credits were stopped, but participants continue to receive investment credits

   Participants became vested in the accrued benefits on the earlier of five years of service or when the participant reached normal retirement age (which is the later of age 65 or the fifth anniversary of the date the participant first became eligible to participate in the plan)

Non-qualified Retirement Plan (the “Excess Plan”)

   Plan frozen on August 31, 2006

   Available to certain management and highly compensated individuals

   Prior to the freeze, the plan provided supplemental benefits to individuals whose benefits under the qualified plan are limited by the provisions of Section 415 and/or Section 401(a)(17) of the US tax code

   The amount payable under the Excess Plan is equal to the difference between the benefit actually paid under the qualified plan and the amount that would have been payable had the applicable US tax code limitations not applied

  Other Retirement    Attract and retain top talent   

401(k) Savings Plan

   Qualified plan available to all eligible employees, enables participants to save for retirement through tax-advantaged combination of employee contributions and a company matching contribution

   The company matching contribution matches $.50 per $1.00 of employee contribution up to 6% of pay and subject to IRS annual limits. Full vesting occurs after 2 years of service

 

 

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DIRECTORS’ COMPENSATION POLICY

 

  Element    Purpose    How Component Operates
  Relocation/Expat Assistance    Attract top talent and provide career enhancing and personal development opportunities   

   Expatriate and relocation benefits are regularly benchmarked against other companies. Current benefits offered include, but are not limited to:

   Shipment of goods and services

  Home sale/lease termination

   House hunting trips

  Temporary housing

   Housing allowance

  Automobile disposition

   Goods and services differential allowance

   Car/driver allowance

  Education fees and expenses for dependent children to age 19

  Home leave

   Tax equalization

  Tax preparation

   Language and cultural training

  Destination acclimation services

Performance Measure Selection

The measures used under the AIP and the LTPP are reviewed and approved by the Committee annually. The other elements in the table above are not subject to the accomplishment of specific performance targets.

Nielsen’s culture reflects our core values of Open, Connected, Useful, and Personal. Our compensation programs re-inforce the values by connecting all of our employees to core business objectives. To that end, the CEO and other executives participate in the same annual incentive plan applicable to managerial employees. The plan is currently funded based on company EBITDA performance. The EBITDA target for incentive plan funding purposes is the equivalent of the EBITDA target approved in our annual operating plan. The target is intended to deliver aggressive EBITDA growth over the prior year and offer a challenging yet achievable goal for participants. Nielsen’s business EBITDA growth is highly correlated to the creation of shareholder value and is an effective measure of Executive Director’s contributions to short-term company performance. Before approving the incentive funding the Committee reviews the Company’s annual free cash flow (“FCF”) performance and has the discretion to reduce the fund by up to 30% if performance falls short of objectives. There is no discretion to increase the incentive fund in the event that FCF exceeds objectives.

Two cumulative three-year performance metrics measure performance under the LTPP. FCF and relative total shareholder return (“RTSR”) were chosen due to their strong alignment with the long-term returns experienced by our shareholders. FCF is assigned a weighting of 60% to reflect the fact that executives have relatively more direct control over this metric. Specific FCF targets cannot be disclosed for competitive reasons but are aligned with the aggressive targets approved in the 3-year strategic plan and with our long-term guidance issued to investors. RTSR was assigned a weighting of 40%.

Under the rules governing the design and operation of the AIP and LTPP, the Committee has the discretion to select other performance metrics as business conditions may dictate in the future.

Remuneration Policy for Other Employees

The remuneration policy for other employees is based on the same philosophy and principles that govern the remuneration policy for Executive Directors. Annual salary reviews take into account company and individual performance, local pay and market conditions, and salary levels for similar roles in the relevant geographies. Senior executives are eligible to participate in the AIP and in LTI programs on similar terms as the Executive Directors. Managerial and professional employees are eligible to participate in the AIP provided for executives; opportunities vary by organizational level and an individual’s role. Some employees below executive level are eligible to participate in the Stock Option and RSU components of the LTI program; opportunity levels are commensurate with organizational level.

 

 

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DIRECTORS’ COMPENSATION POLICY

 

Loss of Office and Service Agreements

In general we do not provide employment agreements for Executive Directors. The principal terms of employment for Executive Directors are as provided to other eligible employees with the exception of certain de minimis benefits (described within) and certain payments provided in the event the Executive Director is terminated not for cause or resigns for good reason (as defined in the documents referenced below under “Potential Payments Upon Termination or Change-In-Control”). In certain circumstances the Committee may provide employment agreements for Executive Directors where it is essential for continued sound governance.

Potential Payments Upon Termination or Change-In-Control

Severance terms for Executive Directors are defined, depending on the Executive Director’s prior service and eligibility, in either The Management Stockholder’s agreement connected with our former 2006 Stock Incentive Plan or the Executive Director’s offer of employment letter or where applicable, the Executive Director’s employment agreement.

In the event of termination of the Executive Director not for cause or his/her resignation for “good reason” as defined in the above documents, our severance policy provides for:

 

   

Base salary continuation of up to 24 months

 

   

Continuation of health benefits at active employee rates for the same period as salary continuation

 

   

Annual incentive payment for the year of termination in accordance with the plan rules paid pro-rata based on service performed in the year of termination.

 

   

Executive outplacement services

Additionally, under the terms of the 2010 Nielsen Holdings Stock Incentive Plan (“2010 Plan”) if the Executive Director is terminated by the Company without “cause” or the Executive Director resigns for “good reason” (as those terms are defined in the plan document) they will forfeit all unvested equity as of the date of termination with the following exceptions:

 

   

LTPP: Executive Directors will receive a payout on the regularly scheduled payout date reduced pro-rata to their service through the performance period, calculated as number of days between the beginning of the performance period and the termination date divided by 1095.

 

   

Option and RSU Awards: Pro-rata vesting of the equity tranche that would have vested, but for the termination, in the 12 months following the termination date calculated by the number of days between the most recent vesting and the termination date divided by 365.

The Committee has the discretion to adjust the above payments in the event of extraordinary circumstances including but not limited to approved retirements, death, and permanent disability.

Change-In-Control Policy

For equity awards made in 2011 or later, under the 2010 Plan, as amended, unvested options and RSUs do not vest automatically in the event of a change-in-control.

Clawback Policy

Our clawback policy requires the Executive Director, in all appropriate cases, to repay or forfeit any bonus, short-term incentive award or amount, or long-term incentive award or amount awarded to the Executive Director, and any non-vested equity-based awards previously granted to the Executive Director if:

 

LOGO   The amount of the incentive compensation was calculated based upon the achievement of certain financial results that were subsequently the subject of a restatement or the correction of a material error; and
LOGO   The Executive Director engaged in intentional misconduct that caused or partially caused the need for the restatement or caused or partially caused the material error, and
LOGO   The amount of the incentive compensation that would have been awarded to the Executive Director, had the financial results been properly reported, would have been lower than the amount actually awarded.

 

 

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DIRECTORS’ COMPENSATION POLICY

 

Recruitment of Executive Directors

The compensation package for a new Executive Director will be set in accordance with the terms of the Directors’ Compensation Policy as set forth above or in force at the time of appointment or hiring. In determining the appropriate remuneration structure and levels, the Committee will take into consideration all relevant factors to ensure that arrangements are in the best interests of the Company and its shareholders.

In addition, to facilitate the recruitment of an individual to an Executive Director position, the Committee can use cash and/or LTI awards to buy-out previously-granted incentive awards and no limits will apply under this policy.

For external hires and internal appointments we may provide certain relocation reimbursements or allowances including expatriate benefits within limits set by the Committee that fairly reimburse Executive Directors for expenses incurred and provide for a smooth transition free of unnecessary distractions.

Consideration of Conditions Elsewhere in the Company

The Committee does not consult with employees specifically on its Executive Director compensation policy and framework however, when determining pay for Executive Directors, the Committee takes into account several data elements including but not limited to:

 

   

company and individual performance

 

   

salary increase budgets provided for other employees

 

   

annual incentive plan funding levels

 

   

local pay and market conditions

 

   

market data provided by independent compensation consultant

Consideration of Shareholder Views

On a regular basis, the Committee engages with shareholders to solicit direct input regarding its Executive Director compensation programs. Input provided during these meetings and from shareholder advisory firms is used to shape our compensation programs. The majority of shareholders continue to express support for our compensation programs.

Compensation Policy for Non-Executive Directors

As of the effective date of this Policy, all of our Directors, with the exception of Mitch Barns, our CEO, are Non-Executive Directors.

Purpose

Nielsen’s Compensation Policy for our Non-Executive Directors is designed to:

 

   

attract and retain talented individuals to help oversee the Company as members of the Board of Directors

 

   

align with the market value of the role and,

 

   

align with long-term shareholder returns.

Practice

The Committee reviews the Non-Executive Director compensation program annually but generally intends to make adjustments every three years unless special circumstances, such as market changes, require otherwise. The values quoted in each category are fixed (i.e., do not vary subject to a performance condition) and therefore represent the current maximum payout opportunity.

The Committee reviews market benchmarking data provided by its independent compensation consultant including information from the Company’s Executive Compensation Peer Group, as well as from general industry benchmarks to establish compensation levels that are competitive and serve the stated purpose.

 

 

 

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DIRECTORS’ COMPENSATION POLICY

 

Compensation Element    How Component Operates    Current Fee Structure (per annum)
Board Fees   

    Annual retainer paid on a quarterly basis

    Director may elect to receive fees in cash or in DSUs

    DSUs accrue dividend equivalents in the form of additional DSUs

  

$80,000

Board Chair Fee   

    Annual retainer payable on a quarterly basis 50% in DSUs and 50% in cash

    Director may elect to receive cash fees in DSUs

    DSUs accrue dividend equivalents in the form of additional DSUs

  

$150,000

Committee Chair Fees   

    Annual retainer payable on a quarterly basis

    Director may elect to receive fees in cash or in DSUs

    DSUs accrue dividend equivalents in the form of additional DSUs

  

    Audit Committee: $25,000

    Compensation Committee: $20,000

     Nomination and Corporate Governance Committee: $15,000

Lead Independent Director Fee   

    Annual retainer payable on a quarterly basis

    Director may elect to receive fees in cash or in DSUs

    DSUs accrue dividend equivalents in the form of additional DSUs

  

$30,000

Annual Equity Grant   

    Offered to all Non-Executive Directors

    Executive compensation peer group plus general industry benchmark provided by Meridian are used as benchmarks

    Annual equity grant delivered in DSUs vests in four equal quarterly installments

    DSUs accrue dividend equivalents in the form of additional DSUs

  

$160,000

 

 

LOGO

  

2017 PROXY STATEMENT    B-7

 


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LOGO

 

Nielsen Holdings plc

85 Broad Street

New York, NY 10004

United States

www.nielsen.com


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              NIELSEN HOLDINGS PLC

              40 DANBURY ROAD

              WILTON, CT 06897-4445

   VOTE BY INTERNET   
   Before The Meeting - Go to www.proxyvote.com   
  

 

Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on May 22, 2017 (May 18, 2017 for 401(k) plan shareholders). Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

  
  

 

During The Meeting - Go to nielsen.onlineshareholdermeeting.com

  
  

 

You may attend the Meeting via the Internet and vote during the Meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.

  
  

 

VOTE BY PHONE - 1-800-690-6903

  
  

Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on May 22, 2017 (May 18, 2017 for 401(k) plan shareholders). Have your proxy card in hand when you call and follow the instructions.

  
  

 

VOTE BY MAIL

  
  

Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Your vote must be received by May 22, 2017 (May 18, 2017 for 401(k) plan shareholders).

  

 

 

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

 

  

E19379-P84587                     KEEP THIS PORTION FOR YOUR RECORDS

                                                                  ——            

 

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.                    

  DETACH AND RETURN THIS PORTION ONLY
 

 

NIELSEN HOLDINGS PLC

 

     

Our Board of Directors recommends that you vote “FOR” each director nominee listed in Proposal 1 in the proxy statement, “FOR” each of the Proposals 2, 3, 4, 5 and 7 and vote “ONE YEAR” for Proposal 6.

     
1.          To elect the Directors listed below:   For    Against    Abstain
   1a.      James A. Attwood, Jr.      
   1b.      Mitch Barns      
   1c.      Karen M. Hoguet      
   1d.      James M. Kilts      
   1e.      Harish Manwani      
   1f.      Robert Pozen      
   1g.      David Rawlinson      
   1h.      Javier G. Teruel      
   1i.      Lauren Zalaznick      

 

     
        

 

 

        

For

 

  Against      Abstain
2.     

To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2017.

     
3.     

To reappoint Ernst & Young LLP as our UK statutory auditor to audit our UK statutory annual accounts for the year ending December 31, 2017.

     
4.      To authorize the Audit Committee to determine the compensation of our UK statutory auditor.      

 

5.

    

 

To approve on a non-binding, advisory basis the compensation of our named executive officers as disclosed in the proxy statement pursuant to the rules of the U.S. Securities and Exchange Commission.

 

 

 

 

 

 

       1 Year   2 Years   3 Years   Abstain
6.     

To determine on a non-binding, advisory basis whether a shareholder vote to approve the compensation of our named executive officers should occur every 1, 2 or 3 years.

 

 

 

 

 

 

 

 

         For   Against     Abstain

 

 

7.

    

 

To approve on a non-binding, advisory basis the Directors’ Compensation Report for the year ended December 31, 2016.

 

 

 

 

 

 

 

 

          
Signature [PLEASE SIGN WITHIN BOX]   Date          
          
Signature (Joint Owners)   Date          
 


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NIELSEN HOLDINGS PLC

Annual Meeting of Shareholders

May 23, 2017

9:00 a.m. (Eastern Time)

nielsen.onlineshareholdermeeting.com

     

 

 

  

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:

The Notice and Proxy Statement, the US Annual Report and the UK Annual Report are available at www.proxyvote.com. You will need the 16-digit control number included on this proxy card in order to access the proxy materials on www.proxyvote.com.

  

 

                                                                  ——                 

E19380-P84587        

 

 

NIELSEN HOLDINGS PLC

Annual Meeting of Shareholders

May 23, 2017 9:00 AM (Eastern Time)

This proxy is solicited on behalf of the Board of Directors

The undersigned shareholder(s) of Nielsen Holdings plc hereby revoke(s) all proxies heretofore given by the signer(s) to vote at the Annual Meeting of Shareholders and any adjournments or postponements thereof, acknowledges receipt of the Proxy Statement, dated April 6, 2017, and appoint(s) Mitch Barns, Jamere Jackson, Eric J. Dale and Emily Epstein, and each of them, as the undersigned’s true and lawful proxies, each with the power to appoint his substitute(s), and hereby authorize(s) them to represent and to vote all of the shares of Nielsen Holdings plc that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders to be held at 9:00 a.m. (Eastern Time) on May 23, 2017, and at any adjournment or postponement thereof, upon all subjects that may properly come before the annual meeting, including, the matters described in the proxy statement furnished with this proxy card, subject to the directions indicated on the reverse side of this card, with all the power the undersigned would possess if personally present.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER(S) ON THE REVERSE SIDE OF THIS PROXY CARD. IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES IN PROPOSAL 1, “FOR” EACH OF THE PROPOSALS 2, 3, 4, 5 AND 7 AND FOR “ONE YEAR” FOR PROPOSAL 6, AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.

CONTINUED AND TO BE DATED AND SIGNED ON REVERSE SIDE